Badger Explorer ASA 1Q 2009 PRESENTATION CEO Kjell Erik Drevdal CFO Gunnar Dolven Oslo, 14 May 2009 Stavanger, 15 May 2009 1
Agenda 1Q 2009 results presentation I. Main events II. III. IV. Badger Explorer A Game Changing Technology Badger Explorer Project Update and Further Plans Calidus Engineering Ltd. V. Financials VI. Outlook 2
I. Main events 1Q Badger Explorer technologies Project progress in line with plan Parallel focus on DEMO50 #2 and DEMO125 Specialist groups in place positive results Continuous improvements Self burying test program summer 2009 Industry partners with firm support Planning of extensive test programs initiated Strong partner support and backing CAPEX ramp up during 2009 Higher activity level Expanding organisation Gross spending below budget Continued strong financial position 3
I. Main events 1Q Badger Explorer history and development plan Idea phase Maturing phase Prototype project phase Commercialization phase First commercial Badger Explorer in operation Activity level/ Magnitude of development Idea born Patent awarded Patent application Company registered Proof of patent completed Partner financing contracts signed Feasibility study completed Project kick-off Petromaks application approved Testing of full scale DEMO125 prototype completed Testing of full scale DEMO50 prototype onshore completed Building of full scale DEMO50 prototype completed Testing of simple prototype onshore completed Building of simple prototype completed Testing of full scale modules completed Design of full scale modules completed Start extensive pilot testing of full scale PILOT125 units Building of full scale DEMO125 prototype completed OTC listed 3rd equity raising complete Milestone #1 approved by partners DnB NOR national Innovation award 2nd Development Project mobilization Today IPO / OSE listing PCD Project financed PCD licenses awarded US patent awarded Extended partner agreement signed 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 4
II. Badger Explorer A Game Changer The evolution of Exploration for Oil & Gas Yesterday s method Today s method Tomorrow s method Blow-out, and proud of it Costly operation to meet required HSE standards Safe, clean and low impact operation 5
II. Badger Explorer A Game Changer Outperform Revolutionary technology 75% lower cost vs. current methods Higher data quality and volume Faster mobilisation and data collection Environmental superior Zero emission to sea and air Market demands cleaner operations Increased governmental focus and requirement Top tier partners & team 200 years+ of operational experience ExxonMobil, Shell and StatoilHydro partners Partner contribution: funding, expertise, operational support and prospective sales Exploration to replace reserves High demand & unique earnings 50% EBITDA profit target 10-20 MUSD revenue pr. operation Partners granted 3 years first right of refusal for BXPL full operations capacity 6
III. Badger Explorer Project Update Status and 1Q focus 2008 test program provided valuable experience Developed and built a full scale DEMO50 prototype Focus on adjustments and system improvements 1H 2009 building Demo50 #2 Designing Demo125 (2008-2010) 7
III. Badger Explorer Project Update Specialist groups Two specialist groups established Compaction functionality Fluid/particle separation functionality New design concepts Redesign hydraulic system Redesign electronic control system Primary solutions for Demo50 #2 chosen 8
III. Badger Explorer Project Update Summer 2009 DEMO 50 test New DEMO50#2 sub-terranean burial test planned Test sites identified in Norway and Europe Rock samples for pre-test drilling received from all test sites to assess solution suitability Pre-test drilling tests performed in Norway Test site qualification performed Test operations under planning 9
III. Badger Explorer Project Update Further Plans 2009 DEMO50 #2 test expected to provide valuable results Further adjustments must be expected Possible further DEMO50 versions to be tested during 2H 2009 Gradually more focus on DEMO125 Many functions from Demo50 #2 implemented in Demo125 design. Calidus major contributor 10
III. Badger Explorer Project Update Badger Explorer technologies Maturing as a technology company Benefits and effects of multi-disciplined research and engineering resource base Competence compounded through skilled personnel and high-tech challenges Valuable data and experience acquired through project Added commercial potential Extended BXPL services Plasma based services IP securing Calidus growth Market development may contribute with more accessible competence and capacity at favourable terms Increased attention from operators and authorities globally Developing Badger Explorer remain first priority
IV. Calidus Engineering Ltd. Positive start of 2009 Growth expected to continue during the year Important Badger Explorer deliveries High-tech capacity and competence (MNOK) Q1 2009 Q1 2008 2008 Gross turnover 3.9 2.7 12.4 BXPL turnover 1.4 0.9 5.7 Net result 1.4 0.5 2.3 Equity ratio 86% 81% 81% Highly competent resources High-tech geothermal capabilities Strong engineering and design competence Manufacturing capacity and testing facilities Major customers both in UK and Norway More than 20 employees Falmouth
V. Financials Income Statement Unaudited figures in NOK 1000 1Q 2009 1Q 2008 Note 31.03. 2009 31.03. 2008 Revenues Other Income 2 532 1 967 4 2 532 1 967 Public grants 0 312 1 0 312 Capitalised public grants 0-312 2 0-312 Total Revenues 2 532 1 967 2 532 1 967 Operating Expenses Cost of goods sold External services for dev. project Salary Other Operating Expenses Capitalised development cost Total Operating Expenses 535 654 535 4 317 4 337 2 699-6 634 5 254 3 113 3 300 1 764-4 391 4 440 4 4,11 3 4 317 4 337 2 699-6 634 5 254 654 3 113 3 300 1 764-4 391 4 440 EBITDA -2 722-2 473-2 722-2 473 Depreciation 292 211 292 211 EBIT -3 014-2 685-3 014-2 685 Net financial income 1 626 2 830 12 1 626 2 830 EBT -1 388 145-1 388 145 Tax 0 0 0 0 Net profit/loss from operations -1 388 145-1 388 145 Profit (loss) attributable to minority interests 690 234 690 234 Profit (loss) attributable to equity holders of the parent -2 078-89 9,10-2 078-89 Earnings per share -0,113-0,005-0,113-0,005 Earnings per share diluted -0,113-0,005-0,113-0,005
V. Financials Balance sheet ASSETS FIXED ASSETS Development costs Patent rights 31.03. 2009 31.03. 2008 Notes 31.12. 2008 Goodwill 5 853 6 200 4 Total intangible assets 48 300 24 020 Machinery, fixtures, etc. Total tangible assets Bank bonds 79 023 0 12 Sum financial assets 79 023 0 TOTAL NON-CURRENT ASSETS CURRENT ASSETS Inventory Sum Inventory Accounts receivable Other receivables Total receivables Cash and cash equivalents TOTAL CURRENT ASSETS TOTAL ASSETS 42 060 387 3 366 3 366 130 689 1 027 1 192 97 756 228 445 26 587 1 027 1 192 355 968 3 380 4 348 92 381 17 433 387 2 568 1 044 227 395 3 4 4 35 426 387 6 203 42 015 3 426 2 568 3 426 3 493 4 537 195 079 200 807 39 373 39 373 84 814 355 1 802 6 389 8 191 137 573 146 119 230 933 EQUITY AND LIABILITIES EQUITY 31.03. 2009 31.03. 2008 Notes 31.12. 2008 Share capital 2 305 2 305 Share premium reserve 217 100 217 100 4,5,11 Other paid in equity 276 154 4,6 Total paid in equity 219 680 219 559 Other equity Total retained earnings Minority Interest TOTAL EQUITY LIABILITIES Capitalised grants Total long term liabilities Accounts payable Public duties payable Taxes payable Other short term liabilities Total short term liabilities TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES -13 402 210 081 13 855 13 855 2 608-192 105 1 988 4 509 18 364 228 445-8 935-13 402-8 935 3 803 2 213 212 838 10 397 10 397 1 384 63 25 2 689 4 160 14 557 227 395 5 7 4,11 2 305 217 100 262 219 667-10 620-10 620 3 113 212 160 13 855 13 855 2 500 388 202 1 828 4 918 18 773 230 933
V. Financials Cash position (MNOK) 31.12. 2008 31.03.2009 Cash position 177 171 Equity Equity ratio 212 92.2% 210 92.1% (MNOK) 31.12. 2008 31.12.2009 Cash position/forecast 177 133 Gross spending 39 83 Gross spending 1Q below budget
New Board of Directors Board members New Board of Directors in place as per 24.04.2009 Rolf Ahlqvist (chairman) Christian Bull Eriksson Kristine Holm Bjørge Gretland Tone Kvåle 16
Shareholder matters Shareholders Shareholder statistics 611 shareholders 20 largest hold 80.7% 63.2% Norwegian Founding Investors Inventor Founders Management Employees hold all together approx 4.1 million shares (22.3%) Primary insiders 4.3 million shares (23.5 %) 17
VI. Outlook Badger Explorer technologies Full continued momentum 2009 Completion and stabilization of Demo50 #2 prototype Sub-terranean burial test commence summer 2009, 3-6 month duration Full focus on pre-commercial Badger Explorer in 2009 Development and testing of Demo125 Partner contributions Future market communication to focus on commercialization issues, less technical details Continued Calidus expansion Other services derived from BXPL development Commercial services planned for late 2010 18
Thank you for listening, welcome back H1 PRESENTATION 27/08/09 Breaking New Ground www.bxpl.com Kjell Erik Drevdal, CEO, ked@bxpl.com (916 43 552) Gunnar Dolven, CFO, gdo@bxpl.com (908 53 168)
APPENDIX 20
The Overall Concept Badger Explorer technologies Badger Explorer, an autonomous drilling machine, a rigless fly by wire exploration tool Drills into the underground and buries itself Slim electrically powered drilling system Carries sensors, which continuously records data Non-reusable exploration tool that remains in the underground Consists of the following main functions; Drill bit driven by an electro-motor and gear Cutting transport, separation, deposition, compression and fracture injection device Spooled cable, through which power is supplied to the tool and data transferred to surface Developed through use of proven technology and proprietary solutions 21
Industry Statement Badger Explorer technologies "We consider the Badger Explorer to be a potential Game Changer" in exploring for hydrocarbons. If research efforts and commercial implementation are successful, the Badger Explorer should help increase the success rate for discovery of oil and gas resources while reducing the environmental impact of the exploration process." Statement from industry partners 2005
The New Exploration Value Chain Badger Explorer technologies Seismic EM Badger Explorer Conventional drilling Used for 100% of prospects Currently low market penetration but expected to grow The most cost efficient comprehensive data collection method Currently the only available drilling technology Only identifies potential traps, unable to identify the presence of hydrocarbons Covers large areas at a relatively low cost Claimed to be suitable for 70-90% of targets. Problems with resistors such as volcanic stone, coal beds and salt layers 90% correct hydrocarbon identification rate claimed Suitable for large range of targets (exploration, appraisal + brown fields) Complementary to seismic and EM Provides detailed formation data and verifies the presence of hydrocarbons Up to USD 700 million rig and 120 man crew required to drill a well Tight supply market with all time high day rates Exploration wells are rarely used for production Most value in development drilling
Largest Shareholders per 13 May 2009 Owner structure Shares 3200 780 % 17,36 Shareholder CONVEXA CAPITAL IV A 2148 446 1855 800 1114 950 976 233 921 873 700 000 653 700 562 134 455 407 301 872 299 886 242 600 236 866 222 600 219 790 214 000 213 200 170 000 163 222 14.873.359 11,65 10,06 6,05 5,29 5,00 3,80 3,55 3,05 2,47 1,64 1,63 1,32 1,28 1,21 1,19 1,16 1,16 0,92 0,89 80,68 IRIS-FORSKNINGSINVES DEUTSCHE BANK AG LON S/A PRIME BROKERAGE CREDIT SUISSE SECURI (EUROPE) LTD./FIRMS BANK OF NEW YORK MEL BNY GCM CLIENT ACCS BANK OF NEW YORK MEL BNY GCM CLIENT ACCOU ODIN OFFSHORE SIX SIS AG 25PCT HOLBERG NORDEN V/HOLBERG FONDSFORVA AHLQVIST INVEST AS DALVIN RÅDGIVNING AS C/O DOLVEN RBC DEXIA INVESTOR S S/A OLYMPIA HOLDING ÅM KNUT HOLBERG NORGE V/HOLBERG FONDSFORVA DREVDAL KJELL ERIK STOKKA SIGMUND CSV II AS MP PENSJON BANK OF NEW YORK MEL S/A INVESCO PERP EUR JP MORGAN CHASE BANK NON TREATY AC -
Badger Explorer Project Update Extended Partner Agreement revisited Shell, ExxonMobil and StatoilHydro firmly committed Agreement addendum signed by all partners Extended agreements, with first right of commercial utilization Comprehensive operational and technical support Partners awarded full manufacturing/operations capacity three first years Sales at market price Secures BXPL full development, testing and commercialization support Access to technology, platforms, vessels, geo-data, expertise staff etc. Estimated manufacturing volumes Year 1 4 units Year 2 20 units Year 3 100 units 25
Badger Explorer Project Update Commercial target 2010 Successful Prototype Test Date =? Successful Prototype test Declaration Of commercial Product Date =? BXPL Declaration of commercial phase R&D projects (Prototype development) Pilot projects (Technology qualification) Demo 50 Demo 125 Pilots 125 Pre commercial 125 Supporting partners; prototype + additional support during qualification ExxonMobil, Shell & StatoilHydro Pre-commercial preperation phase Priority customers (first users) ExxonMobil, Shell & StatoilHydro Commercial projects (Product sales and delivery) T= x T= y Time (T) scale 1 2 3 4 ++ Years 26