Badger Explorer test program - project update

Badger Explorer ASA has according to plan completed a new part of the Badger Explorer Demo50 prototype test program in Denmark. The test included fully PC steered drilling. The test program will continue in Norway and during 2009 increasingly be focussed on the coming Demo125 version. This tool version will provide the basis for the company's first commercial service, and hence shift the company's focus from R&D towards commercialisation. "We are pleased with several of the achieved results of this test phase and the learning effects from these", says CEO Kjell Erik Drevdal and continues: "The fact that we mainly due to rock porosity haven't fully demonstrated the compaction of a plug behind the tool has led to a decision where we will continue the test program in Norway. Overall the tests have yielded valuable experience and several positive results which confirms that our focus is right and which has led to good progress in the project".. The Badger Explorer is a revolutionary new method/device for detailed mapping of oil and gas reserves at a substantially lower risk, cost and complexity than utilising an expensive drilling rig. Compared to the existing exploration methods the Badger Explorer will also lower the risk for environmental pollution and greatly reduce the disturbances commonly associated with exploration activities. The Demo50 is a robotic electro/hydraulic prototype tool that is steered by a PC based SCADA system via a 50 meter cable. The Demo50 tests have so far focused mainly on the following modules/functions; drilling and pump module, cuttings/fluid separation, cuttings deposition, borehole expansion and cuttings compaction. The test site in Denmark has in several ways been convenient, however the geology has proven not to be as expected. The Demo50 tests will continue in Norway and this is expected to be favourably both in terms of project progress as well as costs. Results from the tests can be expected during the coming months. The Demo50 phase is planned to be completed during the first half of 2009 and in parallel with this phase the company will continue to plan, design and construct the Demo125 version. Overall the Badger Explorer project is on track with the previously communicated plans. Badger Explorer has a robust financial position and is fully financed until commercialisation. Per end of 2008 the company will have liquidities at the amount of NOK 171 million which allows for Badger Explorer as planned to ramp up its activities heading towards commercialisation in 2010. During the coming year, the company plans to spend (direct and capitalised costs) a total of NOK 83 million, compared to NOK 39 million during 2008. The anticipated cash position per year end 2009 is NOK 133 million. The partnership agreements with the leading oil companies Exxon Mobil, Shell and StatoilHydro is expected to bring in valuable project and financial contributions and thus strengthening both the project and its financial robustness further. The oil and gas market is developing in favour of Badger Explorer among others through the oil companies' intensified exploration and mapping of new acreage and increased focus on fields that are in production. The company experiences strong industry interest and see that the demand for a viable concept as the Badger Explorer is continuously being strengthened. Further information, please contact: Kjell Erik Drevdal, CEO, Badger Explorer ASA, office +47 52 97 45 15, mob + 47 916 43 552 Gunnar Dolven, CFO, Badger Explorer ASA, office +47 52 97 45 40, mob +47 908 53 168 Please visit: www.bxpl.com