Q Quarterly Report

Transcription

1 Q Qurterly Report

2 2 Bdger Explorer Group - Q Bdger Explorer Group - Q HIGHLIGHTS Q3 2013; TARGETING INDUSTRIAL PHASE Activities t Bdger Explorer ASA (BXPL) hd four min objectives through Q3 2013: Delivery of Milestone 3 (M3) under the Bdger Demonstrtor Progrm (BDP) Chnge of CEO; Mr. Steinr Bkke took over s new CEO in Q Work closely with sponsors to outline future chievble technicl nd industril trgets. Initite discussions with sponsors bout future funding. The BDP development progrm is milestone bsed. Milestone 3, bet version of the Bdger tool redy for comprehensive testing hs been delivered nd ws pproved by the Steering Committee on 29th October. The remining time of the BDP, until end of 2014, will be test phse to qulify the tool for field testing nd industril use. Unexplored firly shllow geologicl regions in chllenging res re vst, nd ought to be the prioritized res for erly use of Bdger services. A first industril tool enbling oil nd gs explortion down to useful depth in such res should be the trget for the first Bdger version. Sponsor support is n importnt contributor for successful development of the Bdger tool. Our sponsors give comprehensive technicl support, long with funding nd it is importnt to outline joint industril scope with the sponsors. A common nd chievble understnding of the future industril use of the Bdger tool is bsis to estblish incresed funding, to bring dditionl sponsors onbord, nd to reduce the time to commerciliztion of the Bdger project. Discussions on incresed support re ongoing with the four existing sponsors s well s potentil new sponsors. The csh position t BXPL is 17.3 MNOK s of 30th September 2013, compred to 25.1 MNOK s of 30th September The pprovl of M3 releses 15.2 MNOK of sponsor funds. Furthermore, the M3 delivery represents significnt risk reducing chievement. THE MILESTONE 3 DELIVERY The Bdger Demonstrtor Progrm is designed to develop nd build the first commercil grde Bdger Explorer tool, redy for deployment in Field Pilot by erly Further to completion of the structured evlution exercise on the Bdger Explorer tool design initited t the end of 2012, design improvements hve been implemented to the Bet version of the current tool. Highlights of the M3 delivery include: Bet version modules for drilling, trnsport, compction nd nchor delivered ccording to Milestone 3. Testing of criticl technologies within drilling, trnsport, compction nd externl friction ccording to Milestone 4 re hed of schedule. Pressure nd temperture sensors instlled in tool. Hydrulic Power Unit (HPU) consisting of two prts; Pressure Genertion Sub (PGS) nd Locl Hydrulic Unit (LHU). The PGS, which is commercilly vilble component, is scheduled for delivery in November, nd does not ffect the overll M3 delivery. BXPL development procedures re bsed on DNV Recommended Prctice DNV-RP-A203. In prllel with the short-term focus on meeting the Milestone 3 criteri, progress hs lso been mde on the longer-term Bdger Process System designs tht will be required for field pilots nd commercil deployment of the Bdger. - A prototype drill bit hs been tested with encourging results. A twin-screw rrngement inside the bit is used to clen cuttings from the bit, ctively feeding them to the trnsport system. - Vrious friction-reducing cotings hve been tested, which increses the length of flow-line through which cuttings with low liquid content cn be pumped. The sme technology cn be used on the outside of the tool, to reduce the overll friction nd hence the hydrulic force required to move the tool downwrd through the subsurfce. Some further benefits hve been identified to the drilling process tht my prove pplicble more widely thn to the Bdger Explorer: - Ultrsonic devices hve been introduced for drilling nd compction. A mjor development progrm hs been proposed for the development of n ultrsonic bsed drilling system. Smll-scle tests were conducted for ultrsonic compction. The Bet version of the tool will be used to further identify nd mitigte technology risks, better understnd overll system opertion in representtive environments nd gin hnds-on opertionl experience with the tool. FIELD PILOT PROGRAM In prllel with the development ctivities, discussions continue with our sponsors regrding the options for initil Field Pilot tests. The first Field Pilot will be conducted loclly, to minimize the time required nd costs incurred, while nonetheless ddressing conditions tht re likely to be encountered in mny geogrphicl loctions irrespective of the underlying trget reservoir. It is envisged tht there will be need to do severl shllow verticl tests where the tool cn be recovered every time to be ble to nlyze ll internl nd externl components. In ddition to the verticl test, BXPL is considering to conduct longer horizontl tests to enble recovery of the tool. No firm commitments hve been mde for further Field Pilots nd while initil useful work ws completed lst yer on possible Field Pilot site in the Cndin oil snds, the interests of our sponsors nd of the Norwegin Petroleum Directorte (NPD) seem better served by trget in Norwy tht is representtive of formtions encountered in potentil deployment re for the tool. A field trip to proposed Field Pilot site incorporting geology representtives of the Brents Se hs been done with one of our sponsors. An offshore pilot site hs been suggested by other sponsors. Such test cn only be conducted fter quyside test to develop the underwter deployment procedures hs been successfully completed. This Field Pilot pln hs been deemed stisfctory to meet the criteri set out by the Reserch Council of Norwy, thus triggering relese of grnt funding previously wrded. NEXT GENERATION BADGER TOOL All deliverbles from the Bdger Demonstrtor Progrm re vitl for development of the next genertion tool, including the Bdger Process System, the Bsic Infrstructure nd opertionl experience chieved in the upcoming BDP testing phse. BXPL hs lso initited discussion with our sponsors to ccelerte further development work. Any ccelertion of the development work will im t depth nd wide rnge of formtions s greed with the sponsors. 3

3 4 Bdger Explorer Group - Q Bdger Explorer Group - Q PETROMAKS ULTRASONIC PROJECT APPLICATION SUBMITTED Net csh flow rising from the investment ctivities in the continuing opertions for Q ws knok nd -12,740 knok s of 30th September 2013, compred to - 4,050 knok for Q nd -8,277 knok s of 30th September Net csh outflow includes ll the development costs relted to the Bdger Explorer development project, which re eligible for cpitliztion. Net csh inflow includes csh proceeds from the disposl of shres. The Reserch Council of Norwy (RCN) is responsible for the Petromks R&D grnt scheme. In mid-october comprehensive ppliction ws submitted on development progrm using ultrsonic technology both in the drilling nd compction units of the future Bdger tool. Net csh flow rising from the finncing ctivities in the continuing opertions for Q ws 2,350 knok nd 30,716 knok s of 30th September 2013, compred to 8,240 knok for Q nd 9,438 knok s of 30th September Net csh inflow includes borrowed funds from the industry prtners, public grnts received from funding institutions nd csh repyments of mounts borrowed. FINANCIALS Investor Reltions Bdger Explorer ASA hd 804 shreholders s of 30th September Norwegin entities nd individuls held 63.9% of the outstnding shres nd the 20 lrgest shreholders held 71.4% of the outstnding shres. For the previous reporting periods, the discontinued opertions comprise the ctivities of Severn Subse Technologies Ltd. (formerly Clidus Engineering Ltd.). Bdger Explorer ASA The stff of Bdger Explorer ASA consisted of 12 full-time employees s of 30th September 2013 compred to 15 employees s of 30th September Some of the roles previously held by full-time employees re currently fulfilled by consultnts nd contrctors. Csh Mngement BXPL estimtes the following income throughout Q4 2013: Sponsor funding in delivery of M MNOK Skttefunn 1.3 MNOK RCN 4.5 MNOK Innovtion Norwy 2-4 MNOK Min Figures Revenues for Q were 0.00 knok nd 70 knok s of 30th September 2013, compred to 0.00 knok for Q nd 321 knok s of 30th September BXPL expects to hve sufficient csh for the mjority of Csh mngement continues to be priority. The structure of the Field Pilot Progrm will relese funds to support the opertion through the whole Field Pilot phse. Operting expenses for Q were 2,358 knok nd 13,926 knok s of 30th September 2013, compred to 4,128 knok for Q nd 13,834 knok s of 30th September OUTLOOK EBITDA for Q ws -2,358 knok nd -13,856 knok s of 30th September 2013, compred to -4,128 knok for Q nd -13,513 s of 30th September Totl development costs of the Bdger Explorer project in Q were 9,520 knok, of which 8,758 knok ws cpitlized. As of 30th September 2013, development costs were 23,310 knok, of which 21,175 knok ws cpitlized. Totl development costs of the Bdger Explorer project in Q were 4,836 knok, of which 4,050 knok ws cpitlized nd s of 30th September 2012 development costs were 13,036 knok, of which 11,025 knok ws cpitlized. Cpitlized public grnts for the Bdger Explorer project were 3,987 knok for Q nd 17,567 knok s of 30th September 2013, compred to -2,223 knok for Q nd -2,944 knok s of 30th September All public grnts re booked s deductions to the cpitlized project costs. Ernings per shre mounted to NOK per shre for Q nd NOK s of 30th September 2013, compred to NOK per shre for Q nd NOK per shre s of 30th September As of 30th September 2013, Bdger Explorer ASA hd net equity of MNOK (equity rtio of 70.0%) compred to MNOK s of 30th September 2012 (76.45%). Net csh flow rising from the operting ctivities in the continuing opertions for Q ws -3,483 knok nd -14,126 knok s of 30th September 2013, compred to -1,892 knok for Q nd 14,433 knok s of 30th September Net csh outflow includes pyments to vendors for goods nd services. Net csh inflow includes shreholder lon repyment. Qurters Consolidted summry Unudited figures in NOK 1000 Revenues Operting expenses EBITDA Q Q Yer to dte Q Ernings per shre (figures in NOK) Projects development costs Public grnts for projects dev Cp. of dev. costs nd public grnts During Q3 2013, BXPL initited the process of refining the business scope in order to ccelerte the development progrm to rech the industril phse. Min technicl nd opertionl focus through 2013 hs been on the delivery of Milestone 3 of the Bdger Explorer Demonstrtor Progrm. The Bord of Directors is plesed with the sponsor s pprovl of M3, nd is optimistic the remining Milestones of the BDP will be delivered by the end of Ongoing discussions with present nd potentil new sponsors re iming t chieving dditionl funding, which will be used to support the field-testing progrm nd n ccelertion of the development progrm. Stvnger, 30th October 2013 The Bord of Directors Bdger Explorer ASA 5

4 6 Bdger Explorer Group - Q Bdger Explorer Group - 1Q Bdger Explorer Group - Q ACCOUNTING POLICIES Bdger Explorer ASA is public limited compny registered in Norwy nd listed on the Oslo Stock Exchnge (Oslo Axess list). The Compny s hed office is locted t Forusskogen 1, 4033 Stvnger, Norwy. The consolidted finncil sttement of Bdger Explorer ASA (the Group) hs been prepred in ccordnce with Interntionl Finncil Reporting Stndrds (IFRS) s dopted by the EU. The finncil sttement hs been prepred on n historicl cost bsis, except for investment in shres in liquidity fund which is held to fir vlue over profit nd loss. The previous subsidiries, Bdger Plsm Technology AS nd Severn Subse Technologies Ltd. (former Clidus Engineering Ltd.), hve been consolidted with the prent compny Bdger Explorer ASA strting from December 1, Intercompny sles nd purchses, intercompny receivbles nd pybles, intercompny investments nd shre cpitl re eliminted. Bdger Plsm Technology AS ws sold for NOK 1.9 million in December 2012 with loss of NOK 1.1 million. BXPL sold 70% of shres of its subsidiry Severn Subse Technologies Ltd. for net mount of NOK 7.2 million with loss of NOK 1.1 million in the Group on June 30, The results of the subsidiries disposed re included in the consolidted sttement of income up to the effective dte of disposl. As of September 30, 2013 the BXPL Group consists of Bdger Explorer ASA. All intr-group blnces, income nd expenses nd unrelised gins nd losses resulting from intr-group trnsctions re fully eliminted. Losses within subsidiry re ttributed to the non-controlling interest even if tht results in deficit blnce. A chnge in the ownership interest of subsidiry, without loss of control, is ccounted for s n equity trnsction. It the Group losses control over subsidiry, it: - Derecognises the ssets (including goodwill) nd libilities of the subsidiry - Derecognises the crrying mount of ny non-controlling interest - Derecognises the cumultive trnsltion differences, recorded in equity - Recognises the fir vlue of the considertion received - Recognises the fir vlue of ny investment retined - Recognises ny surplus or deficit in profit nd loss - Reclssifies the prent s shre of components previously recognised in other comprehensive income to profit nd loss or retined ernings, s pproprite. Non-controlling interest represent the portions of profit nd loss nd net ssets not held by the Group re presented seprtely in the income sttement nd within equity in the consolidted sttement of finncil position, seprtely from prent shreholder s equity. The interim finncil sttements do not include ll the informtion nd disclosures required in the nnul finncil sttements nd should be red in conjunction with the finncil sttements s of December 31, The ccounting policies dopted in the preprtion of the interim finncil sttements re consistent with those followed in the preprtion of the finncil sttements s of December 31, The Group s consolidted finncil sttements re presented in NOK. Income sttement in foreign subsidiry is trnslted into NOK using the verge exchnge rte for the period (month). Assets nd libilities in foreign subsidiry, including goodwill nd djustments of fir vlue of identifible ssets nd libilities rising on the cquisition of subsidiry, re trnslted into NOK using exchnge rte t the blnce sheet dte. The exchnge differences rising from the trnsltion re recognised directly s other comprehensive income in equity. Finncil ssets within the scope IAS 39 re clssified s finncil ssets t fir vlue through profit or loss, lons nd receivbles, held-to-mturity investments, vilble-for-sle finncil ssets, or s derivtives designted s hedging instruments in n effective hedge, s pproprite. Finncil ssets t fir vlue through profit nd loss include finncil ssets held for trding nd finncil ssets designted upon initil recognition t fir vlue through profit nd loss. Finncil libilities within the scope IAS 39 re clssified s finncil libilities t fir vlue through profit or loss, lons nd borrowings, or s derivtives designted s hedging instruments in n effective hedge, s pproprite. Finncil libilities re recognised initilly t fir vlue nd in the cse of lons nd borrowings, directly ttributble trnsction costs re dded. Finncil libilities include trde nd other pybles, bnk overdrft, lons nd borrowings, finncil gurntee contrcts nd derivte finncil instruments. Inventories re vlued t the lower of cost nd net relisble vlue. Csh includes csh in hnd nd t bnk. Accounts receivble re recognised in the blnce sheet t nominl vlue less provisions for doubtful debts. Fixed ssets re crried t cost less ccumulted deprecitions nd impirment losses. The gross crrying mount of fixed ssets is the purchse price, including duties/txes nd direct cquisition costs relting to mking the sset redy for use. Deprecition is clculted using the stright-line method. Intngible ssets re cpitlised if it is probble tht the expected future finncil benefits referred to the sset will ccrue to the Compny, nd tht the cost cn be clculted in relible mtter. Development expenditures relted to the Bdger Explorer development project re recognised s n intngible sset when the Group cn demonstrte: - The technicl fesibility of completing the intngible sset so tht it will be vilble for use or sle. - The Group s intention to complete nd the Group s bility to use or sell the sset. - How the sset will generte future economic benefits. - The bility to mesure relibly the expenditures during development. - The vilbility of resources to complete the ssets. When ll the bove criteri re met, the cost relted to the development strts to be recognised in the blnce sheet. Costs tht hve been chrged s expenses in previous ccounting periods re not recognised in the blnce sheet. Goodwill is tested for impirment nnully nd when circumstnces indicte tht the crrying vlue my be impired. Revenue is recognised to the extent when it is probble tht the economic benefit will flow to the Group nd the revenue cn be relibly mesured, regrdless of when the pyment is being mde. Interest income is recognised in the income sttement bsed on the effective interest method s they re erned. Public grnts re recognised where there is resonble ssurnce tht the grnt will be received nd ll ttching conditions will be complied with. When the grnts relte to n expense item, it is recognised s income over the period necessry to mtch the grnt on systemtic bsis to the cost it intends to compenste. Where the costs re relted to development project nd cpitlised, the belonging grnts re cpitlised together with the cost. Contributions from prtners re recognised in the blnce sheet s long term libilities s the contributions re subject to repyment ref note 14 in the nnul ccounts. During Q n option progrm for ll employees ws introduced. The options entitle the employees to purchse shres t predetermined price during 3.2 yer period until November 15, This is n equity bsed option progrm nd is recognised on the P&L under personnel costs nd on the blnce sheet under other pid in equity. The options re recognised over the vesting period strting from September 15, The option vlue is bsed on third prty evlution of the options t the grnt dte where the Blck-Scholes model ws used for clcultion. The csh flow sttement is prepred in ccordnce with the indirect method nd bsed upon IAS 7.

5 8 Bdger Explorer Group - 1H Q Bdger Explorer Group - Q CONSOLIDATED INCOME STATEMENT Revenues Qurters Yer to dte Yer End Q Q Q Note Other Income Public grnts , Cpitlised public grnts , Totl Revenues Operting Expenses Externl services for dev. project Pyroll nd relted costs Other operting expenses Cpitlised development cost Totl Operting Expenses EBITDA Deprecition Operting profit (loss) Net finncil income (loss) Profit (loss) before txes from continuing opertions Tx on ordinry result from continuing opertions Net profit (loss) from continuing opertions Discontinued opertions: Profit (loss) fter tx for the period from discontinued opertions Net profit (loss) Profit (loss) ttributble to noncontrolling interests Profit (loss) ttributble to equity holders of the prent Ernings per shre Ernings per shre diluted CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS (Unudited figures in NOK 1000) Note NON-CURRENT ASSETS Cpitlised development costs ,3, Ptent rights Goodwill , Totl intngible ssets Property, plnt & equipment Totl tngible ssets Investments in ssocites ,12 0 Totl investments in ssocites TOTAL NON-CURRENT ASSETS CURRENT ASSETS Inventories Sum Inventories Accounts receivbles , Other receivbles , Totl receivbles Csh nd csh equivlents TOTAL CURRENT ASSETS TOTAL ASSETS EQUITY AND LIABILITIES (Unudited figures in NOK 1000) Note EQUITY Shre cpitl Shre premium fund Other pid in cpitl Totl pid in equity Retined ernings Totl retined ernings Non-controlling interests TOTAL EQUITY LIABILITIES Cpitlised grnts Totl non-current libilities Accounts pybles , Interest-bering lons nd borrowings Public duties pybles Other short term libilities Totl current libilities TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES

6 10 Bdger Explorer Group - Q Bdger Explorer Group - Q CONSOLIDATED STATEMENT OF CASH FLOW Qurters Yer to dte Yer end Unudited figures in NOK 1000 Q Q Q Note Contribution from opertions* Tx pid Chnge in ccounts receivbles nd ccounts pybles , Chnge in other receivbles nd pybles Net csh flow from operting ctivities Investment/sles fixed ssets Cpitlistion of development cost Sles of cpitlised equipment Reclssifiction of contribution from industry prtner Sle of shres in subsidiries Net csh flow from investment ctivities Public grnts Contribution from industry prtners Net proceeds from borrowings Interest received Interest pid Net csh flow from finncing ctivities CONSOLIDATED STATEMENT OF CHANGE IN EQUITY Unudited figures in NOK 1000 Note Shre cpitl Shre premium fund Other pid in cpitl Retined ernings Non-controlling interest Totl equity Equity s of Chnges in non-controlling interest Totl net chnges in csh flow - continued opertions Totl comprehensive income Option pln pyment Equity s of Totl net chnges in csh flow - discontinued opertions Net foreign trnsltion differences Csh nd csh equivlents beginning of period CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unudited figures in NOK 1000 Qurters Yer to dte Yer end Csh nd csh equivlents end of period Profit (loss) ttributble to equity holders of the Compny Profit (loss) ttributble to non-controlling interests Employee options Totl comprehensive income Q Q Q Profit (loss) for the yer (period) Other comprehensive income - items tht will lter be reclssified to profit nd loss Trnsltion differences Comprehensive income t end of period Deprecition Finncil income Finncil expenses Shre of (profit) / loss of ssocites Loss on sle of subsidiry nd shres *Contribution from opertions before tx Qurters Yer to dte Yer end Totl comprehensive income ttributble to: Q Q Q Equity holders of the prent Non-controlling interest Totl comprehensive income

7 12 Bdger Explorer Group - 1H Q Bdger Explorer Group - Q NOTES 1. The projects in the Bdger Explorer Development Progrm re funded by grnts from the Reserch Council of Norwy (RCN) nd Skttefunn with percentge of the totl project costs. The grnts from RCN nd Skttefunn were received both in 2012 nd In 2013 Bdger Explorer ASA (BXPL) hs received public grnt from Innovtion Norwy of NOK 11 million for BXPL s ongoing Bdger Demonstrtor Development Progrm. BXPL hs lso received grnt from RCN of NOK 6.4 million during The costs nd the grnts for the development of Bdger Explorer Prototype Project nd Plsm Chnnel Drilling Project re cpitlised. Bdger Plsm Technology AS ws sold in December 2012 nd the cpitlised project costs for Plsm Chnnel Drilling is thus eliminted in the Group s of December 31, All project development costs in the Group re cpitlised in ccordnce with the IFRS regultions except of dditionl project costs of 2,134 knok in YTD Q relted to the restriction on cpitlistion of own personnel costs in the IFRS stndrd for the Bdger Explorer Prototype Project. 4. The previous subsidiries, Bdger Plsm Technology AS nd Severn Subse Technologies Ltd. (former Clidus Engineering Ltd.), hve been consolidted with the prent compny Bdger Explorer ASA strting from December 1, Intercompny sles nd purchses, intercompny receivbles nd pybles, intercompny investments nd shre cpitl re eliminted. Bdger Plsm Technology AS ws sold for NOK 1.9 million in December 2012 with loss of NOK 1.1 million. BXPL sold 70% of shres of its subsidiry Severn Subse Technologies Ltd. for net mount of NOK 7.2 million with loss of NOK 1.1 million in the Group on June 30, The results of the subsidiries disposed re included in the consolidted sttement of income up to the effective dte of disposl. As of September 30, 2013 the BXPL Group consists of Bdger Explorer ASA. From July 1, 2013 Bdger Explorer ASA owns 30% of the shres in Severn Subse Technologies Ltd. The investment in SST is initilly recognised t fir vlue t the effective dte of the sle from 100% to 30% of the shres. Subsequent mesurement of the remining 30% of shres is recognised ccording to equity method. 5. The generl ssembly decided in meeting s of My 9, 2007 to split the existing shres which gve n increse in number of shres from 6,719,520 to 13,439,040. A totl of 5,000,000 dditionl shres were issued in connection with the IPO of 160,000,000 NOK relted to the listing of Bdger Explorer ASA on the Oslo Stock Exchnge s of June 12, The totl number of shres s of September 30, 2013 is 18,537,288 t pr vlue of NOK per shre. 6. The options grnted in 2006 were during Q replced with new options. The new option progrm ws pproved nd hs been effective from September 15, 2009, including ll employees t the time nd grnting totl of 406,750 shre options t strike of 10 NOK nd 25,000 shre options t strike of 15 NOK. These option greements re equity bsed, recognised in the income sttement under pyroll nd relted costs nd in the sttement of finncil position under other pid in cpitl. The options (incl. Employers ntionl insurnce contributions) re recognized over the vesting period strting from September 15, The option vlue is bsed on third prty evlution of the options t the grnt dte where the Blck- Scholes model ws used for clcultion. The replcement of options ws treted s cncelltion nd re-pricing under IFRS 2. All options were out of the money s of September 30, A totl number of 211,168 shre options re forfeited, totl of 71,667 shre options hve expired nd totl of 98,248 shre options hve been exercised. The remining 50,667 shre options re the options tht hve vested but re still outstnding since they hve not been exercised yet. In Q Mr. Dvid Blcklw hs been grnted 370,579 shre options in BXPL t strike price of 19 NOK per shre. These options must be exercised three to ten dys fter the presenttion of the Q report. Mr. Blcklw resigned s the Compny s President nd CEO on September 15, A totl of 370,597 shre options re forfeited s of September 15, On September 16, 2013 Mr. Steinr Bkke took on the position s President nd CEO. Upon commencement of the employment, Mr. Bkke hs been grnted 370,000 shre options in BXPL t strike price of 6.50 NOK per shre. 185,000 shre options cn be exercised three to ten dys fter the presenttion of the Q report nd the remining 185,000 shre options cn be exercised three to ten dys fter the presenttion of the Q report. All shre options were out of the money s of September 30, End of September 2013 BXPL entered into consultncy greement with Mr. Dvid Blcklw. Mr. Blcklw hs been grnted 100,000 shre options to cquire shres in BXPL t strike price of 7.50 NOK. The shre options cn be exercised from the effective dte of the consultncy greement until the dy of the presenttion of the Compny s Q report nd were out of money s of September 30, The Group hs received contribution from five industry prtners mounting to totl of 43,695,200 NOK since 2005 wheres 24,000,000 NOK ws received prior Two new oil compnies - Chevron Energy Technology Compny (Chevron) in December 2012 nd Wintershll Norge AS in Februry joined ExxonMobil Explortion nd Production Norwy AS, Sttoil nd Shell s sponsors of the Bdger Explorer Prototype Project nd the Bdger Explorer Demonstrtor Progrm. The Group hs received n dditionl contribution of 2,660,000 NOK from Chevron in June wheres 4,700,000 NOK were received in Februry. The contribution of 7,360,000 NOK from Wintershll Norge AS ws received in April. A totl of 38,720,000 NOK of this contribution shll be repid to the prtners by pying 5% roylty of ll technology relted sles in the future. This roylty is limited to 150% of received contribution. A totl of 4,975,200 NOK of the entire contribution of 43,695,200 NOK is cpitlised s reduction of the development cost of which 2,487,600 NOK ws cpitlised in Q The contributions hve not been recognised s income. 8. Deferred tx sset hs not been recognised in the sttement of finncil position. 9. Tble below shows the segments which re reported by the Mngement to the Bord of Directors. The segments re the min projects: Bdger Explorer nd Plsm Chnnel Drilling*. The P&L figures for the Engineering segment re no longer presented s this segment hs been discontinued, ref note Business segments Bdger Engineer- Elimin- Unudited figures in NOK 1000 Explorer ing(**) tion Totl Totl revenue Segment profit (loss) Totl ssets Business segments Bdger Bdger Engineer- Elimin- Unudited figures in NOK 1000 Plsm (*) Explorer (**) tion Totl Totl revenue Segment profit (loss) Totl ssets Q Business segments Bdger Engineer- Elimin- Unudited figures in NOK 1000 Explorer ing(**) tion Totl Totl revenue Segment profit (loss) Q Business segments Bdger Bdger Engineer- Elimin- Unudited figures in NOK 1000 Plsm(*) Explorer ing(**) tion Totl Totl revenue Segment profit (loss) * Bdger Plsm Technology AS ws sold in December ** Severn Subse Technologies Ltd. (former Clidus Engineering Ltd.) hs been divested nd is presented s discontinued opertions in the P&L, ref note 12.

8 14 Bdger Explorer Group - 1H Q Bdger Explorer Group - Q Relted prty trnsctions (Unudited figures in NOK 1000) The following tble provides the totl mount of trnsctions tht hve been entered into with relted prties for the relevnt finncil yer: Trnsctions with relted prty Accounts pyble* 0 0 Purchses of services* * In June 2013 BXPL entered into consultncy greement with two of its lrgest shreholders, Dlvin Rådgivning AS nd Nilsholmen AS. As of 30 September 2013 pyments totlling knok 648 were mde to Dlvin Rådgivning AS in respect of performed consultncy services. Mr. Gunnr Dolven, who is CFO of BXPL, is director of Dlvin Rådgivning AS. As of 30 September, 2013 knok 331 were pid to Nilsholmen AS, compny owned by Mr. Kjell Mrkmn who is Sr.VP Business Development & Strtegy of BXPL. * In September, 2013 BXPL entered into consultncy greement with foreign compny Celekt LLC where Mr. Dvid Blcklw is director. Mr. Blcklw ws the previous President nd CEO of BXPL. As of September 30, 2013 knok 43 were pid to Celekt LLC. Trnsctions with Severn Subse Technologies Ltd. (former Clidus Engineering Ltd.) Accounts pyble** Purchsed services** Lon to ssocite*** **Bdger Explorer ASA (BXPL) hs purchsed engineering- nd production services from Severn Subse Technologies Ltd. Nigel Hlldy (previous MD of Clidus Engineering Ltd.) owns 77,500 shres in BXPL. ***In December, 2012 BXPL provided shreholder lon to Severn Subse Technologies Ltd. (SST) of 180,000 t interest rte of 3.20% p.. with down pyment period of 1.5 yer. Nigel Hlldy (previous MD of Clidus Engineering Ltd.) hs provided lon of 60,000 t interest rte of p.. with down pyment period of 1.5 yer ccordingly. These credit greements for the mounts of 180,000 nd 60,000 lent by BXPL nd Nigel Hlldy respectively were revoked nd replced by the new credit greement of 240,000 signed in July This credit greement is to be repid to BXPL by 6 monthly instlments of 40,000 commencing s of July 31, 2013 nd continuing to the end of the yer 2013 with no interest. Shreholders lon ws entirely repid to Nigel Hlldy by BXPL in My 22, Shres held by members of the Bord of Directors nd members of Mngement group SEB Privte Bnk S.A. Luxembourg (Bord Director - Mrcus Hnsson) Bord Director - Mrcus Hnsson SIX SIS AG 25PCT (Bord Director - Mrcus Hnsson) Dlvin Rådgivning AS (CFO - Gunnr Dolven) Nilsholmen Investering AS (Sr. VP Bus. Dev. & Strtegy - Kjell Mrkmn) Nilsholmen AS (Sr. VP Bus. Dev. & Strtegy - Kjell Mrkmn) CFO - Gunnr Dolven Bord Director - Tone Kvåle Ordinry shres % of totl shres 6.0 % 6.0 % 11. Fir vlue hierrchy As of September 30, 2013 the Group does not hold ny finncil instruments crried t fir vlue in the sttement of finncil position. 12. Discontinued opertions - prtil divestment of shres in Severn Subse Technologies Ltd. (former Clidus Engineering Ltd.) Unudited figures in NOK 1000 In June 28, 2013, BXPL hs entered into the Shre Purchse Agreement (Agreement) with UK bsed business focused on the design nd mnufcture of control vlves nd relted products, Severn Glocon Group PLC (Severn Glocon), whereby BXPL sold 84 shres pursunt to the Agreement representing 70% of the issued shre cpitl of its subsidiry Severn Subse Technologies Ltd. (SST) for the equivlent of NOK 7,2 million. The 36 option shres retined by BXPL represent 30% of the issued shre cpitl of the SST. Under the Agreement Severn Glocon will cquire nother 15% of the shres in SST in 2015 nd the remining 15% in 2016 on n ern-out model bsis. The shre purchse price for the two future trnsctions is linked to SST s finncil performnce during 2014 nd 2015 respectively. Under the terms of the Agreement, BXPL will continue to plce orders with SST worth minimum of 1,75 million over the next 2.5 yers ( 1 million in 2013, 500k in 2014 nd 250k in 2015 ccordingly). The prtil divestment hve been treted s discontinued opertions in ccordnce with IFRS 5 nd comprble figures hve been chnged ccordingly. P&L figures for Severn Subse Technologies Ltd. (former Clidus Engineering Ltd.) for 1H 2013 Revenues Totl operting expenses EBIT Net profit Bdger Explorer Group ccounts for the disposl of 70% interest s follows: Prtil disposl of 70 % interest in Severn Subse Technologies Ltd Avilble-for-sle investment Csh proceeds on disposl of 70% interest in the subsidiry Net ssets of the subsidiry OCI effects Net loss of control of the subsidiry Loss recognised on the loss of control of the Severn Subse Technologies Ltd. is clculted s follows: Loss on interest disposed of Severn Subse Technologies Ltd Csh proceeds on disposl of 70% interest Crrying mount of 70% interest interest in the subsidiry % of OCI effects* Result of the disposl of 70% interest -784 Loss on interest retined of Severn Subse Technologies Ltd Crrying mount of 30% vilble-for-sle investment Crrying mount of 30% interest % of OCI effects* -490 Result on interest retined -336 *Other comprehensive income

9 Bdger Explorer ASA Org.nr MVA Visiting ddress: Forusskogen 1, 4033 Stvnger, Norwy Postl ddress: P.O.Box 147, 4065 Stvnger, Norwy Switchbord: / Fx: