Barnwell Industries (NYSE:BRN) shares are shooting up 32% faster than Jack’s magic bean sparking right into a giant beanstalk. The reason? The Canadian oil and natural gas announced this morning that its wholly-owned subsidiaries have entered into a purchase and sale agreement with an independent third party for the purchase of interests in oil and natural gas properties located in the Twining area of Alberta, Canada.
The purchase price for Barnwell interests is approximately US$10,500,000, at current Canadian dollar exchange rates, and is subject to customary adjustments to the purchase price at closing, including adjustments to reflect an effective date of sale of July 1, 2018. The purchase price will be paid from available cash. The closing of the transaction is expected to occur in August 2018.
Barnwell CEO Alexander C. Kinzler commented, “This transaction reflects the strategic purchase by the Company of what will now be its largest oil property.”
Based on last reported financials, the company delivered net earnings of $679,000, $0.08 per share, and a net loss of $338,000, $0.04 per share, for the three and six months ended March 31, 2018, respectively, as compared to a net loss of $615,000, $0.07 per share, and net earnings of $1,026,000, $0.12 per share, for the three and six months ended March 31, 2017, respectively.
At March 31, 2018 Barnwell had cash, cash equivalents and certificates of deposit of $16,588,000 and working capital of $18,646,000 and our third quarter, to end June 30, 2018, has begun with the receipt in April of a $310,000 percentage of sales payment by Kaupulehu Developments and a $373,000 distribution from the Kukio Resort land development partnerships.