Badger Explorer ASA - Status of the Self Burial Test

The full scale self burial test of the Badger Explorer tool is currently ongoing. However the testing is behind schedule due to the low temperatures experienced at the test site this winter. The operations carried out over the past weeks have demonstrated the functionality of the tool. The tool is now powered and controlled through the cable. Furthermore, for the first time ever, the Badger Explorer prototype has as a fully integrated system drilled several meters in closed cavity, thus implying that the tool operates in a burial mode and is not longer visible while drilling. The Badger Explorer closed cavity drilling is the world´s first and it must be considered as ground breaking. It is part of the nature of a prototype test that challenges related to the robustness of the tool’s different components have occurred (for example hydraulic valves and pumps), which have not been related to the system’s general functionality. The challenges have been solved through continuous repairs and improvements. However, to carry out these measures the tool needs to be dismounted and moved to a nearby workshop. Each of these repairs and adjustments are time consuming and it can take up one week from the time the tool is dismounted until it is back in operation. Such optimization work is necessary in order to gradually build robustness into the Badger Explorer. As a consequence of running the tests at low winter temperatures, the number of incidents has been higher than expected which again has affected the overall progress of the prototype testing. The primary goal is to continuously drill with the Badger Explorer prototype over a certain period of time in order to verify the process of pumping water containing drill cuttings, separate drill cuttings from the circulation water, deposit these at the compaction unit and compress the drill cuttings into a firm plug at the rear of the tool. This process is still not as stable as it has to be in order to consider it a success. The test is presently conducted by drilling the Badger Explorer tool a few meters in closed cavity, analyze the results, adjust various parameters, change and improve sub-components, and then continue testing. It is the Company’s view that the need for technical adjustments does not reduce the likelihood of a successful prototype self burial test and it is BXPL’s goal to conclude the tests during spring 2010. A complete self burial test is considered to be proof of the patented Badger Explorer concept as well as a concluding step in completing the Company’s prototype phase. “The testing we have done during the last few weeks has provided us valuable results when it comes to optimizing the Badger Explorer prototype tool. For the first time ever we have succeeded in performing drilling in closed cavity while controlling the Badger Explorer via cable. The low temperatures as well as technical challenges have caused delays, but the organization has handled and resolved these difficulties. The BXPL employees have done an outstanding job. The test results so far prove that the overall target seems to be within reach which provides reason for great optimism regarding the way forward.” says Badger Explorer President & CEO Kjell Erik Drevdal. Badger Explorer ASA develops a drilling tool with the potential to revolutionise the exploration for oil and gas resources. The efforts already undertaken by the Company, and in particular the ongoing self burial test, are groundbreaking. Therefore several functions must be custom designed by the Company for the use in the Badger Explorer tool. In addition, the tests and the test procedures are unique and such an operation has never been undertaken before. The test site was chosen based on its relevant geological formation and except for the low temperatures experienced this winter the test site has proven to be suitable. For further information, please contact: Kjell Erik Drevdal, CEO, mobil: +47 916 43 552, office: +47 52 97 45 15 Gunnar Dolven, CFO, mobil: +47 908 53 168, office: +47 52 97 45 40 www.bxpl.com