ACQUISITION OF CONTROLLING STAKE IN STRATEGIC SUB-CONTRACTOR

Badger Explorer ASA has entered into an agreement to acquire a controlling 50 per cent stake in Calidus Engineering Ltd, a UK based oil & gas engineering company for a consideration of MNOK 8.5. Through the acquisition Badger Explorer ASA will gain control over and secure access to vital engineering capacity for the ongoing development ofBadger Explorer. Badger Explorer has previously communicated to themarket that the company based on the increasing market pressure in the oil service sector would consider proactive steps to secure the project schedule. Though the Calidus agreement Badger Explorer has secured vital competence and delivery capacity for mechanical, hydraulic and electronic solutions. - Calidus will be important in solving the technical challenges and reaching our project goals. The Company`s extensive track record in developing custom made solutions for hostile environments and the company`s applications knowledge as well as specialist R&D facilities bodes well for rapid results. Through this agreement we have secured vital know how for the development of Badger Explorer and we look forward to be working with Calidus, says Badger Explorer CEO Kjell Erik Drevdal. The parties have agreed upon an acquisition model in which Badger Explorer ASA gradually until 2013 will acquire 100 per cent of Calidus Engineering Ltd. Badger Explorer initially acquires 50 per centof the company through a combined purchase of outstanding shares and a share issue. Another 25 percent is to be acquired in 2011, and the remaining 25 percent in 2013. The existing and single owner, the Company`s Managing Director NigelHalladay, has a lock-up agreement for a period of six years from closing. Calidus has a 10 years experience in the oil & gas,geothermal and aerospace industries. Badger Explorer will capitalize on the company`s capabilities within systems integration, mechanicaldesign, hydraulics system engineering, electronics and instrumentation. Calidus has a staff of 15 and operates from Falmouth, UK. - Being part of the realization of Badger Explorers revolutionary new method for hydrocarbon exploration is very exciting and we get to use our considerable experience. It is a very promising partnership we are entering, says Nigel Halladay, Calidus` MD, Chairman and single shareholder. Last financial year, Calidus turnover was GBP 780.000, with a net result after tax of GBP 126.000and Badger Explorer expects that Calidus in the years to come will show profitable growth. The acquisition is subject to satisfactory legal and financial Due Diligence and subsequent board ofdirector`s approval. For further information, please contact: Kjell Erik Drevdal, president and CEO, Badger Explorer ASA, tel +47 51 57 75 10 Gunnar Dolven, CFO, Badger Explorer ASA, tel +47 908 53 168 About Badger Explorer ASA Badger Explorer ASA is developing a revolutionary method for exploration and verification of oil and gas prospects, called Badger Explorer. Badger Explorer drills down and buries itself in the underground, equipped with numerous sensors, which measure and register vital formation and physical data. The method provides a substantially lower risk, cost and complex operation compared to utilising an expensive conventional drilling rig. The crushed formation cuttings are transported through the tool, deposited and compressed in the void behind the unit. Potential excess volume is injected into fractures generated by Badger Explorer. The unit is connected to a combined powerand signal cable which again is connected to the surface. The unit is powered by electricity and transmits data signals to the surface through the cable. Badger Explorer ASA has the ambition of launching a commercial service in the market late 2008. In addition, the wholly owned Badger Plasma Technology AS subsidiary has an exclusive licence to exploit the patented plasma channel drilling (PCD) technique developed at Britain`s University of Strathclyde. The solution is removing scale and other obstructions in production/injection wells with the aid of sparks generated at high electrical voltages. www.bxpl.com