What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-12-23 compared with 2024-12-17 · 98 added, 141 removed, 194 unchanged (55% of the section changed)

Barnwell was incorporated in Delaware in 1956 and fiscal 2025 represented Barnwell’s 69th year of operations.

Barnwell operates in the following three principal business segments:

Barnwell operates in the following two principal business segments:

• Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and in the U.S.

states of Oklahoma and Texas.

• Land Investment Segment - Barnwell owns land interests in Hawaii.

• Contract Drilling Segment - Barnwell provides well drilling services and water pumping system installation and repairs in Hawaii.

• Land Investment Segment - Barnwell owns land interests in the State of Hawaii.

Discontinued Operations

On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources International, Inc.

(“Water Resources”).

Water Resources drills water wells and installs and repairs water pumping systems in the State of Hawaii and represented Barnwell's contract drilling segment.

As a result of the sale, the Company has classified the related assets, liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented.

Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur.

Unless otherwise noted, the discussions throughout Part I of this Form 10-K pertains only to Barnwell’s continuing operations.

For information on discontinued operations, refer to Note 3 “Discontinued Operations” in the Notes to Consolidated Financial Statements in Item 8 of this report.

Oil and Natural Gas Segment

Barnwell acquires and develops crude oil and natural gas assets in the province of Alberta, Canada via two corporate entities, Barnwell of Canada and Octavian Oil.

Barnwell acquires and develops crude oil and natural gas assets in the province of Alberta, Canada via two corporate entities, Barnwell of Canada, Limited and Octavian Oil Limited.

Barnwell of Canada is a U.S.

incorporated company that has been active in Canada for over 50 years, primarily as a non-operator participating in exploration projects operated by others.

Octavian Oil is a Canadian company incorporated in 2016 to achieve growth through the acquisition and development of crude oil reserves.

Additionally, through its wholly-owned subsidiaries BOK Drilling, LLC (“BOK”), established in February 2021, and Barnwell Texas, LLC (“Barnwell Texas”), established in November 2022, Barnwell is involved in oil and natural gas investments in Oklahoma and Texas, respectively.

Twining represents 70% of Barnwell’s fiscal 2024 production (Boe) and consists of assets in the Twining field, in Alberta, Canada.

These assets were purchased in August 2018 and were augmented with subsequent smaller acquisitions of partners.

Octavian Oil is a Canadian company incorporated in 2016 to achieve growth through the acquisition and development of crude oil reserves in the field of Twining, Alberta.

Additionally, through its wholly-owned subsidiaries BOK Drilling, LLC (“BOK”), established in February 2021, and Barnwell Texas, LLC (“Barnwell Texas”), established in November 2022, Barnwell was, until August 8, 2025, involved in oil and natural gas investments in Oklahoma and Texas, respectively.

The Twining field, in Alberta, Canada represents 86% of Barnwell’s fiscal 2025 production.

These assets were acquired in August 2018 and subsequently expanded through smaller acquisitions of various partner interests.

These assets are partially operated by the Company and partially operated by Pine Cliff Energy Ltd.

The oil wells operated by the Company largely have less than 15% per year decline rates, and due to these lower decline rates, require less capital investment to replace decline.

This lower capital requirement along with the fact that the land is largely held indefinitely, enables development drilling to be done when commodity prices support it.

Since Barnwell’s entry into the Twining property, we have participated in drilling 12 gross horizontal development wells that were completed with multi-stage sand fracs, which have cumulatively been or are forecast to be profitable.

Of these 12 wells, three are 100%-owned operated wells in locations selected by Barnwell and nine gross (2.6 net) are non-operated wells.

Barnwell plans to continue to develop the pool with more horizontal wells if commodity prices continue to support their profitability.

Barnwell also has some minor legacy assets that represent 14% of Barnwell’s fiscal 2024 production (Boe) and consist of the largely non-operated oil and natural gas assets located throughout Alberta, Canada, and produce shallow gas or conventional oil from a variety of pools.

These assets have been accumulated over decades of Barnwell activity.

Barnwell has divested many of these properties in

fiscal 2024 in order to reduce risk and increase focus in the Twining area.

Barnwell will continue to opportunistically divest our remaining legacy Canadian assets and minimal capital is expected to be invested in these properties.

Barnwell is continually reviewing the market and evaluating opportunities to add to our production and development portfolio.

The Company has non-operated working interests in seven wells varying from 1.2% to 4.2% and a minor overriding royalty interest, 0.07%, in one well in Oklahoma.

Our interests in Oklahoma produced 7% of Barnwell’s fiscal 2024 production (Boe).

The Company has a 15.4% non-operated working interest in two wells in the Permian Basin in Texas.

Our interests in Texas produced 9% of Barnwell’s fiscal 2024 production (Boe).

Our oil and natural gas segment revenues, profitability, and future rate of growth are dependent upon oil and natural gas prices and the Company’s ability to use its current cash, obtain external financing or generate sufficient cash flows to fund the development of our reserves.

In the recent past, the industry experienced a period of low oil and natural gas prices that negatively impacted our past operating results, cash flows and liquidity.

Credit and capital markets for oil and natural gas markets are volatile.

We may seek to raise additional capital if such proceeds are considered attractive and would support potential growth.

Natural gas prices are typically higher in the winter than at other times due to increased heating demand.

Oil prices also are subject to seasonal fluctuations, but to a lesser degree.

Oil and natural gas unit sales are based on the quantity produced from the properties by the respective property operators.

Oil prices received in Canada are impacted by differentials in price to West Texas Intermediate (“WTI”).

In recent history this meant that Barnwell at times received prices at a significant discount to WTI.

In 2024, additional oil export pipeline capacity was made available in Canada which greatly reduced this differential.

Gas prices received in Canada are based on published AECO hub prices and are also impacted by local market conditions that result in a discount to U.S.

Henry Hub pricing.

Oil prices received from the Texas and Oklahoma properties are generally in line with WTI pricing.

Realized gas prices from our Texas natural gas sold at the Waha Hub are at a significant discount to Henry Hub due to limited gas egress from the Permian Basin and excess supply in the area.

The majority of Barnwell's operated oil wells have annual decline rates below 15%, which supports lower capital investment requirements to maintain production levels.

This lower capital

requirement to maintain production, in addition to the land being largely continued with no expiries, allows Barnwell to drill opportunistically when commodity prices are favorable.

Since entering the Twining area, Barnwell has participated in drilling 12 gross (5.6 net) horizontal development wells using multi-stage sand fracturing.

Of these, 3 wells are 100%-owned and operated and 9 (2.6 net) are non-operated.

These wells have all either been profitable or are forecasted to be profitable, and Barnwell intends to continue development of the pool with more horizontal wells as commodity prices permit.

Barnwell also holds minor legacy assets throughout Alberta, Canada representing 3% of Barnwell’s fiscal 2025 production.

These non-operated oil and natural gas assets produce shallow gas or conventional oil from a varying interest in a variety of pools and have been accumulated over decades.

In fiscal 2024 and 2025, Barnwell has divested many of these properties to reduce operational risk and increase strategic focus in the Twining area.

Barnwell remains active in evaluating market opportunities to further divest remaining legacy assets along with acquisition opportunities to expand our production and development portfolio.

The Company had non-operated working interests in seven wells in Oklahoma ranging from 1.2% to 4.2%, along with a 0.07% overriding royalty interest in one well.

Our interests in Oklahoma produced 4% of Barnwell’s fiscal 2025 production.

Our interests in Oklahoma were sold on August 8, 2025.

The Company had a 15.4% non-operated working interest in two wells in the Permian Basin in Texas.

Our interests in Texas produced 7% of Barnwell’s fiscal 2025 production.

Our interests in Texas were sold on August 8, 2025.

Our oil and natural gas segment revenues, profitability, and future growth potential are closely tied to commodity prices and the Company’s ability to fund reserves development through cashflow or external financing.

In recent years, the industry has experienced volatile oil and natural gas prices, and when these prices are in low cycle they negatively impact our operating results, cash flows and liquidity.

Credit and capital markets for oil and natural gas investments have been tight recently, but as capital becomes more available we may seek to raise additional capital when market conditions are favorable and aligned with our growth strategy.

Barnwell's oil and natural gas unit sales are based on production from operated and non-operated properties.

In Canada, oil prices received are influenced by differentials to West Texas Intermediate (“WTI”).

Historically, these differentials resulted in significant discounts due to limited export capacity and transportation bottlenecks.

In 2025, improved pipeline egress contributed to more favorable realized pricing for Barnwell's Canadian oil production.

Oil prices received from our Texas and Oklahoma properties were generally in line with WTI pricing.

Natural gas prices continues to show seasonal strength during the winter months, driven by increased heating demand.

In Canada, gas prices are based on AECO hub benchmark prices, which typically trade at a discount to U.S.

Henry Hub pricing due to regional supply dynamics and infrastructure constraints.

While our Oklahoma and Texas interests were sold in the fourth quarter of 2025, in Oklahoma, the pricing of our natural gas reflected prices close to Henry Hub pricing.

In Texas, our natural gas was sold at

the Waha Hub, where prices were significantly discounted to Henry Hub pricing due to limited gas egress from the Permian Basin and excess supply in the area.

Preparation of Reserve Estimates

Barnwell’s reserves are estimated by our independent petroleum reserve engineers, InSite Petroleum Consultants Ltd.

(“InSite”) in Canada and Ryder Scott Company, L.P.

(“Ryder Scott”) in the U.S., in accordance with generally accepted petroleum engineering and evaluation principles and techniques and rules and regulations of the SEC.

All information with respect to the Company’s Canadian reserves in this Form 10-K is derived from the report of InSite, which is filed with this Form 10-K as Exhibit 99.1.

All information with respect to the Company’s U.S.

reserves in this Form 10-K is derived from the report of Ryder Scott, which is filed with this Form 10-K as Exhibit 99.2.

The preparation of data used by the independent petroleum reserve engineers to compile our oil and natural gas reserve estimates was completed in accordance with various internal control procedures which include verification of data input into reserves evaluation software, reconciliations and reviews of data provided to the independent petroleum reserve engineers to ensure completeness, and management

review controls, including an independent internal review of the final reserve report for completeness and accuracy.

Barnwell has a Reserves Committee consisting of two independent directors and Barnwell's Corporate Secretary.

(“InSite”), in accordance with generally accepted petroleum engineering and evaluation principles and techniques and rules and regulations of the SEC.

All information with respect to the Company’s reserves in this Form 10-K is derived from the report of InSite, which is filed with this Form 10-K as Exhibit 99.1.

Barnwell has a Reserves Committee consisting of three directors, two of which are independent directors and the third is Barnwell's Chief Executive Officer.

The Reserves Committee was established to ensure the independence of the Company’s petroleum reserve engineers.

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At September 30, 2024, Barnwell’s reserves were approximately 52% operated and consisted of 41% conventional oil, 15% conventional natural gas liquids, and 44% natural gas.

The amounts set forth in the following table, based on our independent reserve engineers’ evaluation of our reserves, summarize our estimated proved reserves of oil, natural gas liquids, and natural gas as of September 30, 2024 for all properties located in Canada and the U.S.

in which Barnwell has an interest.

The amounts set forth in the following table, based on our independent reserve engineers’ evaluation of our reserves, summarize our estimated proved reserves of oil, natural gas liquids, and natural gas as of September 30, 2025 for all properties located in Canada in which Barnwell has an interest.

All of our oil and natural gas reserves are based on constant dollar price and cost assumptions.

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Proved oil and natural gas reserves are the estimated quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e., prices and costs) existing at the time the estimate is made.

Proved developed oil and natural gas reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made.

Proved developed oil and natural gas reserves are proved reserves that can be

expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made.

No estimates of total proved net oil or natural gas reserves have been filed with, or included in reports to, any federal authority or agency, other than the SEC, since October 1, 2024.

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Total (Boe) 1,380,000 — 1,380,000

During fiscal 2024, Barnwell’s total net proved reserves of oil and natural gas liquids increased by 83,000 Bbls (9%) and 36,000 Bbls (11%), respectively, and total net proved reserves of natural gas decreased by 246,000 Mcf (4%), for a combined increase of 80,000 Boe (3%).

The increase in proved reserves for oil and natural gas liquids were primarily the result of revisions due to the improved production performance of many wells in Twining as a result of focused attention and investment in optimization.

The Company has identified a number of additional optimization projects for fiscal 2025 that should further improve well performance and reduce operating costs.

Projects are generally workovers, field automation, and facility debottlenecking.

Barnwell has an ownership is all processing facilities that handle our net production volumes.

The following tables set forth Barnwell’s oil and natural gas net reserves at September 30, 2024, by location and property name, based on information prepared by our independent reserve engineers, as well as net production and net revenues by location and property name for the year ended September 30, 2024.

During fiscal 2025, Barnwell’s total net proved reserves of oil and natural gas liquids decreased by 339,000 Bbls (35%) and 198,000 Bbls (55%), respectively, and total net proved reserves of natural gas decreased by 3,026,000 Mcf (47%), for a combined decrease of 1,043,000 Boe (43%).

The decrease in proved reserves were due to the sale of U.S.

oil and natural gas interests which was completed on August 8, 2025 and amounted to 425,000 Boe.

The remaining decrease in reserves were a result of production and the removal of a proved undeveloped well which was represented as 239,000 Boe in the prior year’s balance due to a significant portion of the Company's capital resources being devoted to a proxy contest and consent election.

The following tables set forth Barnwell’s oil and natural gas net reserves at September 30, 2025, by location and property name, based on information prepared by InSite, as well as net production and net revenues by location and property name for the year ended September 30, 2025.

The reserve data in these tables are based on constant dollars where reserve estimates are based on sales prices, costs and statutory tax rates using a historical average price of the first day pricing of the last 12-months ending with September 2025.

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Twining 631 163 3,326 641 165 3,376

Medicine River 23 43 366 23 43 366

Thornbury — — 23 — — 51

Other properties 1 — 1 2 — 2

United States:

Oklahoma 33 86 699 33 86 699

Texas 57 78 815 57 78 815

Total 632 163 3,350 643 165 3,429

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Standardized Measure of Discounted Future Net Cash Flows

The following table sets forth Barnwell’s “Estimated Future Net Revenues” from total proved oil, natural gas and natural gas liquids reserves located in Canada and the U.S.

and the present value of Barnwell’s “Estimated Future Net Revenues” (discounted at 10%) as of September 30, 2024.

The following table sets forth Barnwell’s “Estimated Future Net Revenues” from total proved oil, natural gas and natural gas liquids reserves located in Canada and the present value of Barnwell’s “Estimated Future Net Revenues” (discounted at 10%) as of September 30, 2025.

Estimated future net revenues for total proved reserves are net of estimated future expenditures of developing and producing the proved reserves, and assume the continuation of existing economic conditions.

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states of Oklahoma and Texas.

Barnwell’s net production in fiscal 2022 was derived in Alberta, Canada and in Oklahoma.

For a discussion regarding our total annual production volumes, average sales prices, and related production costs, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Barnwell invested $939,000 in oil and natural gas properties during fiscal 2025, including accrued capital expenditures and acquisitions of oil and natural gas properties and excluding additions and revisions to estimated asset retirement obligations.

Barnwell’s capital expenditures were primarily for the drilling of a new well and for equipment and upgrades to facilities, all of which were in the Twining area.

Barnwell's capital expenditures were primarily related to equipment, facility upgrades and well workovers.

Barnwell invested $4,805,000 in oil and natural gas properties during fiscal 2024, including accrued capital expenditures and acquisitions of oil and natural gas properties and excluding additions and revisions to estimated asset retirement obligations.

Barnwell’s capital expenditures were primarily for the drilling of new wells in Texas and the Twining area.

Barnwell’s capital expenditures were primarily for the drilling of a new well and for equipment and upgrades to facilities, all of which were in the Twining area.

Well Drilling Activities

During the year ended September 30, 2024, the Company drilled one gross (1.0 net) operated development oil well in the Twining area which started producing in mid-September 2024.

The well has produced on average approximately 107 Boe per day in its first two months of production.

The Company did not drill or participate in the drilling of wells during the year ended September 30, 2025.

In fiscal 2024, the Company drilled one gross (1.0 net) operated development oil well in the Twining area which started producing in mid-September 2024.

Capital expenditures incurred by the Company for this well totaled approximately $3,183,000.

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Additionally, the Company participated in the drilling of two gross (0.3 net) non-operated development oil wells in Texas.

Capital expenditures incurred for the drilling of these two wells totaled approximately

$4,293,00 during the year ended September 30, 2023.

The Company did not drill or participate in the drilling of wells in Oklahoma during the year ended September 30, 2023.

In fiscal 2022, the Company participated in the drilling of six gross (1.7 net) non-operated development wells in the Twining area.

Capital expenditures incurred by the Company for these non-operated development wells totaled $4,366,000 for the year ended September 30, 2022.

Five gross (1.4 net) wells were producing at September 30, 2022 and the remaining one gross (0.3 net) well was awaiting tie-in and started producing in fiscal 2023.

The Company drilled one gross (1.0 net) operated development well in the Twining area which was producing at September 30, 2022.

Capital expenditures incurred by the Company for this operated well was $2,852,000.

Capital expenditures incurred for the drilling of these two wells totaled approximately $4,293,00 during the year ended September 30, 2023.

The Company did not drill or participate in the drilling of wells in Oklahoma during the year ended September 30, 2023.

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As of September 30, 2025, Barnwell has interests in 109 gross (62.9 net) producing wells in Alberta, Canada, of which 76 gross (58.2 net) were oil wells and 33 gross (4.7 net) were natural gas wells.

Additionally, Barnwell has interests in seven gross (0.2 net) and two gross (0.3 net) producing oil wells in Oklahoma and Texas, respectively, as of September 30, 2024.

Developed Acreage and Undeveloped Acreage

The following table sets forth the gross and net acres of both developed and undeveloped oil and natural gas leases in the province of Alberta, Canada which Barnwell held as of September 30, 2025.

The acreage of developed and undeveloped oil and natural gas leases in the U.S.

are not significant and are therefore not included in the table below.

Developed Acreage* Undeveloped Acreage* Total

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“Undeveloped Acreage” includes acres covered by leases upon which there are no producing wells and which are maintained by the payment of delay rentals or the commencement of drilling thereon.

Seventy-seven percent of Barnwell’s undeveloped acreage is not subject to expiration at September 30, 2024.

Twenty-three percent of Barnwell’s leasehold interests in undeveloped acreage is subject to expiration and may expire over the next five fiscal years, if not developed, as follows:

4% expire during fiscal 2025;

Eighty-one percent of Barnwell’s undeveloped acreage is not subject to expiration at September 30, 2025.

Nineteen percent of Barnwell’s leasehold interests in undeveloped acreage is subject to expiration and may expire over the next five fiscal years, if not developed, as follows:

9% expire during fiscal 2026;

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4% expire during fiscal 2028;

and no expirations during fiscal 2029.

and no expirations during fiscal 2029 and fiscal 2030.

There can be no assurance that Barnwell will be successful in renewing its leasehold interests in the event of expiration.

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Marketing of Oil and Natural Gas

Barnwell sells its Canadian oil, natural gas, and natural gas liquids production under short-term contracts between itself and two main oil purchasers, one natural gas purchaser, and one natural gas

liquids purchaser.

Barnwell sells its Canadian oil, natural gas, and natural gas liquids production under short-term contracts between itself and two main oil purchasers, one natural gas purchaser, and one natural gas liquids purchaser.

The prices received are freely negotiated between buyers and sellers and are determined from transparent posted prices adjusted for quality and transportation differentials.

In the quarter ended December 31, 2023, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 1,055 gross Mcf per day of the Canadian natural gas that it sells during the period from April 1, 2024 to October 31, 2024 to a fixed index price before differentials of $2.55 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices.

This per day volume of natural gas under fixed index price contract is equivalent to approximately 33% of Canadian natural gas gross production per day for the year ended September 30, 2024.

In July 2024, the Company amended the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from November 1, 2024 to March 31, 2025 to a fixed index price before differentials of $2.64 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices.

This per day volume of natural gas under this fixed index price contract is equivalent to approximately 33% of Canadian natural gas gross production per day for the year ended September 30, 2024.

In February 2025, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2025 to October 31, 2025 to a fixed index price before differentials of $1.95 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices.

This per day volume of natural gas under this fixed index price contract was equivalent to approximately 38% of Canadian natural gas gross production per day for the year ended September 30, 2025.

Additionally, in September 2025, the Company amended the sales price on 1,583 gross Mcf per day of the Canadian natural gas it will sell during the period from November 1, 2025 to March 31, 2026 to a fixed index price before differentials of $3.03 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices.

This per day volume of natural gas under this fixed index price contract that will affect the period from November 1, 2025 to March 31, 2026, is equivalent to approximately 58% of Canadian natural gas gross production per day for the year ended September 30, 2025.

These natural gas contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.

In the quarter ended December 31, 2023, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 225 gross barrels per day of the Canadian oil for sale for the period from January 1, 2024 to June 30, 2024 to a fixed index price before differentials of $69.46 per net barrel, with remaining volumes continuing to be sold at spot prices.

This per day volume of oil under this fixed index price contract was equivalent to approximately 35% of Canadian oil gross production per day for the year ended September 30, 2024.

In July 2024, the Company amended the sales price on 100 gross barrels per day of the Canadian oil that it sells during the period from August 1, 2024 to December 31, 2024 to a fixed index price before differentials of $79.00 per net barrel, with remaining volumes continuing to be sold at spot prices.

This per day volume of oil under this fixed index price contract is equivalent to approximately 16% of Canadian oil gross production per day for the year ended September 30, 2024.

In June 2025, the Company amended the sales price on 100 gross barrels per day of the Canadian oil that it will sell during the period from July 1, 2025 to December 31, 2025 to a fixed index price before differentials of $70.35 per net barrel, with remaining volumes continuing to be sold at spot prices.

This per day volume of oil under this fixed index price was equivalent to approximately 19% of Canadian oil gross production per day for the year ended September 30, 2025.

These oil contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.

Subsequent to fiscal 2025, the Company amended the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2026 to October 31, 2026 to a fixed index price before differentials of $2.94 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices.

This per day volume of natural gas under this fixed index price contract that will affect the period from April 1, 2026 to October 31, 2026, is equivalent to approximately 38% of Canadian natural gas gross production per day for the year ended September 30, 2025.

In fiscal 2025 and 2024, Barnwell took most of its Canadian oil, natural gas liquids and natural gas “in kind” where Barnwell markets the products instead of having the operator of a producing property market the products on Barnwell’s behalf.

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Because our products are commodities for which there are numerous marketers, we are not dependent upon one purchaser or a small group of purchasers.

Accordingly, the loss of any single purchaser would not materially affect our revenues.

Governmental Regulation

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All of Barnwell’s Canadian gross revenues were derived from properties located within Alberta, which charges oil and natural gas producers a royalty for production within the province.

royalties are calculated as a percentage of revenue and vary depending on production volumes, selling prices and the date of discovery.

Provincial royalties are calculated as a percentage of revenue and vary depending on production volumes, selling

prices and the date of discovery.

Barnwell also pays gross overriding royalties and leasehold royalties on a portion of its oil and natural gas sales to parties other than the province of Alberta.

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Post payout royalties vary with commodity prices and well production rates.

In fiscal 2024, 75% of Canadian royalties were related to Alberta government charges and 25% of royalties were related to freehold, overriding royalties and other charges.

In fiscal 2025, 72% of total Canadian royalties were related to Alberta government charges and 28% of royalties were related to freehold, overriding royalties and other charges.

In fiscal 2025, the weighted-average royalty rate paid on all of Barnwell’s Canadian natural gas was 4%, and the weighted-average royalty rate paid on oil was 16%.

In fiscal 2024, the weighted-average royalty rate paid on all of Oklahoma’s and Texas’s production was 23% and 26%, respectively.

Under Canadian oil and gas law and regulations, in order for the Company to retain the right to acquire, transfer, or drill well licenses, Barnwell must maintain a favorable Licensee Capability Assessment (“LCA”) with the Alberta Energy Regulator’s (“AER”).

The LCA is intended to be a comprehensive assessment of corporate health and considers a wide variety of factors and establishes guidelines for the industry with regards to the management of liabilities throughout the entire lifecycle of oil and gas projects.

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These deposits do not earn interest.

Asset retirement obligations of Barnwell’s net

share of sites operated by all partners are included in “Asset retirement obligation”, current and long-term, in the Consolidated Balance Sheets.

Over the past eight years, the Company has worked to reduce its abandonment and reclamation obligations associated with its oil and natural gas segment, both by divesting low-productivity assets and actively closing wells and sites.

Twenty-four Barnwell-operated sites have been certified as fully reclaimed or exempt since 2016.

Barnwell competes in the sale of oil and natural gas on the basis of price and on the ability to deliver products.

Asset retirement obligations of Barnwell’s net share of sites operated by all partners are included in “Asset retirement obligation”, current and long-term, in the Consolidated Balance Sheets.

Over the past nine years, the Company has worked to reduce its abandonment and reclamation obligations associated with its oil and natural gas segment, both by divesting low-productivity assets and actively closing wells and sites.

Twenty-five Barnwell-operated sites have been certified as fully reclaimed or exempt since 2016.

Barnwell competes in the sale of oil and natural gas mainly on the ability to deliver products.

The oil and natural gas industry is intensely competitive in all phases, including the acquisition and development of new production and reserves and the acquisition of equipment and labor necessary to conduct drilling activities.

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Barnwell's ownership interests in the Kukio Resort Land Development Partnerships are accounted for using the equity method of accounting.

In November 2025, Kaupulehu Developments entered into an agreement with Mr.

David Johnston, the son of Mr.

Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $2,000,000 of which $70,000 was received.

Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years, with those payments applied against the $2,000,000 purchase price.

The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.

Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6% interest, agreed to sell KDK’s interests in Increment II to Mr.

David Johnston for $2,109,000.

The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close.

Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.

Increment I is an area of 80 single-family lots, all of which were sold from 2006 to 2024, and a beach club on the portion of the property bordering the Pacific Ocean.

Increment II is the remaining portion of the approximately 870-acre property and is zoned for single-family and multi-family residential units and a golf course and clubhouse.

Two residential lots of approximately two to three acres in size

fronting the ocean were developed within Increment II and sold by KD II, and the remaining acreage within Increment II is not yet under development.

Two residential lots of approximately two to three acres in size fronting the ocean were developed within Increment II and sold by KD II, and the remaining acreage within Increment II is not yet under development.

It is uncertain when or if KD II will develop the other areas of Increment II, and there is no assurance with regards to the amounts of future sales from Increment II.

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Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots.

Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments also is obligated to pay an amount equal to 0.72% and 0.2% of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner, Replay, for Increment II.

Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is obligated to pay an amount equal to 0.72% and 0.2% of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner, Replay, for Increment II.

Such compensation will be reflected as the obligation becomes probable and the amount of the obligation can be reasonably estimated.

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The principal factors affecting competition are the location of the project and pricing.

Barnwell is a minor

participant in the land development industry and competes in its land investment activities with many other entities having far greater financial and other resources.

Contract Drilling Segment

Barnwell’s wholly-owned subsidiary, Water Resources, drills water and water monitoring wells of varying depths in Hawaii, installs and repairs water pumping systems, and is the distributor for Trillium Flow Technologies, previously known as Floway, pumps and equipment in the state of Hawaii.

Water Resources owns and operates three water well drilling rigs, two pump rigs and other ancillary drilling and pump equipment.

Additionally, Water Resources leases short-term a storage facility in Waipahu, Hawaii, and a one-acre maintenance and storage facility with 2,800 square feet of interior space in Kawaihae, Hawaii.

Water Resources also maintains an inventory of uninstalled materials for jobs in progress and an inventory of drilling materials and pump supplies.

Water Resources currently operates in Hawaii and is not subject to seasonal fluctuations.

The demand for Water Resources’ services is primarily dependent upon land development activities in Hawaii.

Water Resources markets its services to land developers and government agencies, and identifies potential contracts through public notices, and referrals.

Contracts are usually fixed price per lineal foot drilled and are negotiated with private entities or obtained through competitive bidding with private entities or local, state and federal agencies.

Contract revenues are not dependent upon the discovery of water or other similar targets, and contracts are not subject to renegotiation of profits or termination at the election of the governmental entities involved.

Contracts provide for arbitration in the event of disputes.

In fiscal 2023, Water Resources sold a drilling rig to an independent third party for proceeds of $551,000, net of related costs, and recognized a $551,000 gain on the sale of the drilling rig during the year ended September 30, 2023, as the rig was fully depreciated.

In fiscal 2024, Water Resources started three pump installation and repair contracts and completed two well drilling and five pump installation and repair contracts.

The two completed well drilling contracts were both started in fiscal 2023.

Of the five completed pump installation and repair contracts, two were started in fiscal 2017, one was started in fiscal 2019, and two were started in the current year.

Fifty-four percent of well drilling and pump installation and repair jobs, representing 18% of total contract drilling revenues in fiscal 2024, have been pursuant to government contracts.

At September 30, 2024, there was a backlog of one well drilling and two pump installation and repair contracts and all of the contracts were in progress as of September 30, 2024.

The approximate dollar amount of Water Resources’ backlog of firm well drilling and pump installation and repair contracts at December 1, 2024 and 2023 was as follows:

Well drilling $ 800,000 $ 5,900,000

Pump installation and repair 300,000 900,000

$ 1,100,000 $ 6,800,000

All of the contract drilling revenues in backlog at December 1, 2024 is expected to be recognized in fiscal 2025.

Potential Sale or Wind Down of the Contract Drilling Segment

On December 13, 2023, the Company entered into a stock purchase agreement with a construction company for the sale of Water Resources.

On December 27, 2023, the stock purchase agreement was terminated by the buyer prior to closing.

The Company continues to investigate strategies regarding Water Resources' future including, but not limited to, other potential opportunities for a sale of its stock or assets.

If no sale of its stock or assets along with contract backlog can be secured, Water Resources will likely be wound down after all contracts in backlog are completed and any remaining drilling rigs and equipment will be liquidated.

Water Resources competes with other drilling contractors in Hawaii, some of which use drill rigs similar to Water Resources’.

These competitors also are capable of installing and repairing vertical turbine and submersible water pumping systems in Hawaii.

These contractors compete actively with Water Resources for government and private contracts.

Pricing is Water Resources’ major method of competition;

reliability of service also is a significant factor.

Barnwell is a minor participant in the land development industry and competes in its land investment activities with many other entities having far greater financial and other resources.

Financial Information About Industry Segments and Geographic Areas

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Federal and state and Canadian Federal and provincial governmental agencies issue rules and regulations and enforce laws to protect the environment which are often difficult and costly to comply with and which carry substantial penalties for failure to comply, particularly in regard to the discharge of materials into the environment.

effects of the disposal or release of petroleum or chemical substances at various sites where it has a working interest.

These laws, which are constantly changing, regulate the discharge of materials into the environment and maintenance of surface conditions and may require Barnwell to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites where it has a working interest.

For further information on environmental remediation, see the Contingencies section included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our consolidated financial statements included in Item 8, “Financial Statements and Supplementary Data.”

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The contents of our website are not part of this Annual Report on Form 10-K and are not incorporated by reference into this document.

Our filings with the SEC are available to the public through the SEC’s website at www.sec.gov.

Our filings with the SEC are available to the public

through the SEC’s website at www.sec.gov.

The Company’s references to URLs for these websites are intended to be textual references only.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business