Honolulu-based Barnwell Industries Inc., which derives about three-quarters of its revenue from oil and natural gas operations in Canada and the continental U.S., says it has agreed to sell its Hawaii water drilling operations for $2 million to an undisclosed local construction company.

Proceeds from the Water Resources International Inc. sale, which is expected to close early next year, will be used for reinvestment in Barnwell’s oil and gas operations, the company said Thursday.

Water Resources provides deep drilling and well pumping services for exploration and development of groundwater resources for government, commercial and private clients in Hawaii, according to the company.

“We are pleased to announce the execution of the contract of sale for our water well contracting business to a local firm that has a long history of successful construction and infrastructure activities in Hawaii,” Barnwell CEO Alex Kinzler said in a statement. “This strategic transaction will enhance both of our organizations, and we are confident that we leave Water Resources in capable hands.

“The proceeds from the sale will further our efforts to drill new wells at our Alberta, Canada, Twining field and to take positions in domestic energy assets as well.”

Barnwell, which also is involved in land development on Hawaii island, said Friday that it finished its fiscal year that ended Sept. 30 with a loss of $961,000 compared with a profit of $5.5 million in fiscal 2022. Its full-year revenue fell 11.5% to $25.3 million from $28.5 million.