Income Statement - Badger Explorer Group

ALL figures in NOK

	No te	20 13	20 12
RE VE NU ES
Ot he r i nc om e		70 26 8	36 4 51 5
Pu bli ts c gr an	2	22 37 5 45 1	2 84 2 65 3
Ca pit aL ise d b[ ic ts pu gr an	9	-22 37 45 1 5	-2 84 2 65 3
To ta l r ev en ue s		70 26 8	36 4 51 5
OP G NS ES ER AT IN EX PE
Ex L rvi fo r d e[ je te t p ct rna se ce s ev op m en ro	9	24 99 08 61	89 92 61 3
o[ [ a Pa nd La ted sts yr re co	6	14 90 87 11	19 57 8 36 2
De iat ion pr ec	7	45 0 75 3	65 0 67 6
Ot he tin r o pe ra g ex pe ns es		10 72 9 14 5	68 34 04 7
Ca pit a[ ise d de Lo t c ts ve pm en os	9	-31 52 3 30 2	-1 7 14 9 05 8
To l o tin ta g pe ra ex pe ns es		19 55 61 68	18 90 66 40
O of (lo ) tin it g pe ra pr ss		-1 9 48 5 89 9	-1 8 54 2 12 4
Fin cia [ i an nc om e	3	73 5 28 7	83 0 70 5
Fin cia [ e an xp en se s	3	33 9 33 5	50 84 2
Lo Le of bs idi d sh ss on sa su ar y an ar es	3	0	16 6 04 5
Sh of of it I ([o ) o f a iat ar e pr ss ss oc es	3	38 0 44 3	0
Ne t f ina ia ( inc ((o ) nc om e ss		15 50 9	61 3 81 7
m Pr of it ((o ) be fo fro in ui io ta nt at ss re x co ng op er ns		-1 9 47 0 39 0	-1 92 8 30 7 7
m Ta di [t fro inu ing ion nt at on or na ry re su co op er s x	4	0	0
m Ne fit I (lo ) f th fro in ui io t p nt at ro ss or e ye ar co ng op er ns		-1 9 47 0 39 0	-1 7 92 8 30 7
Di tin d at io sc on ue op er ns :
m Pr of it I (Lo ) a fte fo he fro dis inu ed r t r t nt ss ax ye ar co ion at op er s	17 ,19	4 34 3 57 6	-3 38 0 00 0
Ne fit ((o ) t p ro ss		-2 3 81 3 96 5	-2 1 30 8 30 7
Pr of it (Lo ss) bu bl [[in int at tn ta to nt t e no n- co ro g er es		54 37 8	-8 44 89 1
Pr of it (lo ) a ib ab (e uit ho (d of th ttr ut to nt ss eq er s e pa re y	5	-2 3 86 8 34 4	-2 0 46 3 41 6

m fro Ea ing ha nt inu ing at ion re rn s pe r s co op er s	5	-1 ,29	-1 ,10
m Ea ing ha di lut ed fro inu ing ion nt at rn s pe r s re co op er s	5	-1 ,28	-1 ,10
m Ea ing ha fro dis inu ed lon nt at rn s pe r s re co op er s	5	-0 ,23	-0 ,18
m Ea ing ha di lut ed fro dis inu ed ion nt at re rn s pe r s co op er s	5	-0 ,23	-0 ,18

Statement of financial position - Badger Explorer Group

ALL figures in NOK

AS SE TS	No te	20 13	20 12
NO CU AS SE TS N- RR EN T
C ita tis ed de Lo t c ts ap ve pm en os	2, 9	13 0 78 24 2 5	12 1 63 39 1 7
Pa ri gh te nt ts	9	38 6 66 8	38 6 66 8
Go od wi LL	9, 20	0	5 59 5 28 5
To l in ib le ta ta ts ng as se		13 1 17 1 91 0	12 7 61 9 34 3
Pr pl & ui ty t t op er an eq pm en ,	7	3 06 9 57	15 27 3 43 5
To l t gi bl ta ts an e as se		57 3 06 9	15 27 3 43 5
ln in cia st ts te ve m en as so s	18	2 70 0 62 4	0
To l in in ci ta st ts at ve m en as so es		2 70 0 62 4	0
TO NO CU AS SE TS TA L N- RR EN T		13 4 44 5 60 3	14 2 89 2 77 9
CU RR EN T AS SE TS
In ie nt ve or s	8	0	1 93 1 62 5
Ac iva bL ts co un re ce es	10 ,1 5	0	2 12 3 72 6
O th iva bL er re ce es	2, 10 ,1 5	6 91 9 59 6	3 65 2 01 9
To l iv ab le ta re ce s		6 91 9 59 6	5 77 5 74 5
Ca sh d sh ui le nt an ca eq va s	11	24 94 3 33 8	17 60 7 75 7
TO TA L CU RR EN TA SS ET S		31 86 29 34	25 31 5 12 6
TO TA LA SS ET S		16 63 08 53 7	16 82 07 90 5

Statement of financial position - Badger Explorer Group

ALL figures in NOK

EQ U IT YA N D LI AB IL IT IE S	No te	20 13	20 12
EQ UI TY
Sh pit aL e ar ca	12	2 31 7 16 1	2 31 16 1 7
m Sh iu e ar pr em		21 8 06 9 98 5	21 8 06 9 98 5
O th id in pit aL er pa ca		2 96 78 5 7	4 58 1 52 3
To l id in ui ta ty pa eq		22 3 35 2 93 3	22 4 96 8 66 9
Fo i La tio tra re se rv e re gn cu rre nc ns n y		17 2 37 3	-1 76 1 58 5
Re in ed in ta ea rn gs		-1 21 89 7 57 5	-9 8 02 8 48 3
To l ui ib ab le ui ho ld of ta ty at tr ut to ty nt eq eq er s pa re		-1 21 72 20 1 5	-9 9 79 0 06 8
N lli in tro te st on -c on ng re s		0	18 79 95 8
TO TA L EQ UI TY		10 1 62 32 77	12 70 58 9 55
LI AB I L IT I E S
Ca pit aL ise d ts gr an	14	53 92 0 00 0	24 00 0 00 0
rm To l lo lia bi lit ie ta te ng s		53 92 0 00 0	24 00 0 00 0
Ac bL ts co un pa ya e	13 ,1 8	4 40 1 24 7	3 80 0 85 6
b[ Pu ic du tie bL s pa ya es		3 10 4 25 3	1 27 0 88 6
In be in Lo d bo in te st g re ar an s an rro w gs	15	0	8 20 0 00 3
m O th sh lia bi Li tie t t er or er s	16	3 25 30 5 5	3 87 60 0 7
rm To l s ho lia bi lit ie ta rt te s		10 76 0 80 5	17 14 9 34 6
TO TA L LI AB IL IT IE S		64 68 0 80 5	41 14 9 34 6
TO TA L EQ LJ IT YA ND LI AB IL IT IE S		16 6 30 8 53 7	16 8 20 90 7 5

Marcus Ha son (Chairman of the Board)

3lstMarch 2014

Tone Kvåle (Board member)

4di~

(Board member)

Steinar Bakke

(President & CEO)

Statement of comprehensive income - Badger Explorer Group

ALl figures in NOK

To l c eh si in ta om pr en ve co m e	20 13	20 12
Pr of it (Lo ) f th e ss or ye ar	-2 3 81 3 96 5	-2 1 30 8 30 7
O th eh siv in - i th wi LL la be te at te e e er co m pr en co m m s r c[ sif ie d of it [os to re as pr or s
Tr s[ io di ffe at an n re nc es	1 93 3 21 1	48 18 1 5
To l c eh si in fo th f t ta t o ve e e om pr en co m r ye ar ne ax ,	-2 1 88 0 4 75	-2 0 82 3 12 6

To l c eh si in ib ab le ta at tr ut to om pr en ve co m e :	20 13	20 12
Eq uit ho ld of th nt er s e pa re y	-2 1 93 13 3 5	-1 9 97 8 23 5
No llin in nt te st n- co ro g re	54 37 8	-8 44 89 1
To l c eh si in ta ve e om pr en co m	-2 1 88 0 75 4	-2 0 82 3 12 6

Statement of Change in Equity - Badger Explorer Group

ALL fi~ures in NOK

			Ot he r	Fo ign re		No n
	Sh e ar	Sh e ar	ld in pa	cu rre nc y	Re ta ine d	nt llin g co ro	To ta l
No te	pit al ca	ium pr em	pit al ca	lat io tra ns n	ing ea rn s	int t er es	uit eq y
Eq ui of l Ja y2 ol 2 ty as nu ar	23 17 16 1	21 80 69 98 5	32 18 79 1	-2 24 60 19	-7 75 65 81 5	27 24 84 9	14 65 18 95 3
of (Lo ss) fo Pr it r t he ye ar					-20 46 3 41 6	-84 4 89 1	-21 30 8 30 7
Fo ign lat ion tra re cu rre nc y ns				48 5 18 1			48 5 18 1
To l c eh siv inc ta om pr en e om e				48 5 18 1	-20 46 3 41 6	-84 4 89 1	-20 82 3 12 6
Op tio pla t 6 n n pa ym en			i 36 2 73 2				1 36 2 73 2
Eq ui of 3l De be 0l2 ty r2 as ce m	23 17 16 1	21 80 69 98 5	45 81 52 3	-1 76 08 38	-9 80 29 23 1	i 87 99 58	12 70 58 55 9
Pr of it (Lo ss) fo he r t ye ar					-23 86 8 34 4	54 37 8	-23 81 3 96 5
Fo ign lat ion tra re cu rre nc ns y				1 93 3 21 1			1 9 33 21 1
To l c eh siv inc ta om pr en e om e				I 93 3 21 1	-23 86 8 34 4	54 37 8	-21 88 0 75 4
Ch in an ge s no n llin int 18 nt t co ro g er es						-i 93 4 33 6	-1 93 4 33 6
Op tio pL 6 t n an pa ym en			-1 61 73 6 5				-1 61 73 6 5
of Eq ui ty 3l De be r2 0l 3 as ce m	23 17 16 1	21 80 69 98 5	29 65 78 7	17 23 73	-1 21 89 75 75	0	10 1 62 77 32

Consolidated Statement of Cash FLow - Badger Explorer Group

All figures in NOK

	No te	20 13	20 12
m Ca sh flo w fro io l a iv iti at ct op er na es
m C tri bu tio fro io * at on ns op er ns		-2 0 59 6 88 8	-1 6 52 8 40 3
Ch in iva bL d ble ts ts an ge ac co un re ce e an ac co un pa ya s		2 48 6 45 1	-2 00 3 18 2
Ch in he iva bl d bL ot an ge r re ce es an pa ya es		1 07 9 37 0	-1 95 2 68 9
m Ne h flo w fro in tiv iti t c at g as op er ac es	Å	-1 7 03 1 06 7	-2 0 48 4 27 3
m Ca sh flo w fro in iv iti st t a ct ve m en es
In t/s al in fix ed st t ve m en es as se	7	0	49 3 75
C ita tis io of de Lo at t c ts ap n ve pm en os	9	-3 1 52 3 30 2	-1 7 14 9 05 8
Sa Le of pit aL ise d ui t s ca eq pm en	7	0	29 4 29 7
m ific of fro Re cia io rib io in du at nt ut st rtn ss n co ns ry pa er s	14	0	2 48 7 60 0
Sa Le of sh in bs id ia rie ar es su s	18	5 44 2 10 8	75 2 14 8
m Ne h flo w fro in iv iti t c st t a ct as ve m en es	B	-2 6 08 1 19 4	-1 3 53 9 52 0
m Ca sh flo w fro fin ci tiv iti ng an ac es
Pu bl ic ts gr an	2	20 34 2 65 3	2 84 2 65 2
m C fro tri bu tio in du st rtn on ns ry pa er s	14	29 92 0 00 0	7 80 0 00 0
In ive cl te st re re ce	3	38 6 71 0	82 0 70 3
In id te st re pa	3	-2 65 8	1 34 -5 5
m Ne h flo w fro fin ci tiv iti t c as an ng ac es	C	50 64 6 70 5	11 41 2 01 0
To l ch in sh flo w tin ui io ta t at ne an ge s ca - c on ng op er ns	Å+ B÷ C	53 4 44 4 7	-2 2 61 1 78 3
flo To l ch in sh w - d is in d io ta t nt at ne an ge s ca co ue op er ns		-1 98 86 2	1 04 0 70 6
Ca of sh d sh uiv at ts at be gi in rio d an ca eq en nn g pe	11	17 60 7 75 7	39 17 8 83 4
Ca sh d sh ui le d of rio d nt at an ca eq va s en pe	11	24 94 3 33 8	17 60 7 75 7
Ne lt tri bu bL ui ho Ld of th t at ta to ty nt re su e eq er s e pa re		-1 9 47 0 77 4	-1 7 08 3 10 2
Pr of it ( (o ) tri bu bl tL in in at ta to nt te st ss e no n- co ro g re		54 37 8	-8 44 89 1
Em pl tio oy ee op ns	6	-1 61 5 73 6	I 36 2 73 2
De ia tio pr ec n	7	45 0 75 3	65 0 67 6
Fi ia [ in e na nc co m	3	35 28 -7 7	-8 30 70 5
Fi ia l e na nc xp en se s	3	33 9 33 5	50 84 2
Sh of ( of it) (os of I cia te ar e pr s as so s	3, 18	38 04 43	0
Lo Le of bs id ia d sh on ss sa su ry an ar es	3, 18	0	16 6 04 5
m *T al rib io fro io ot nt ut at co ns op er ns		-2 0 59 6 88 8	-1 6 52 8 40 3

N ot el Ac	lid ~
g ~o un ~n po	es

Badger Exp[orer ÅSA is ^a pubtic Limited company registered in Norway and listed on the Oslo Stock Exchange (OsLo Axess [ist). The Companys head office is [ocated at Forusskogen 1, 4033 Stavanger, Norway.

The consolidated financial statement of Badger Exptorer ÅSA and aLL its subsidianes (the Group) has been prepared in accordance with International FinanciaL Reporting Standards (IFRS) as adopted by the EU.

The financiaL statement has been prepared on an historical cost basis.

1.1 Consolidation

The consoLidated financial statement comprises the financiaL statement of Badger ExpLorer ÅSA and its subsidiaries as at 31.12 each year.

Subsidiaries are fuLLy consoLidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consoLidated untiL the date that such controL ceases, see note 18.

The financiaL statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

All lntra-group batances, transactions, unreaLised gains and Losses resuLting from intra-group transactions and dividends are eliminated in fuLL.

Losses within ^a subsidiary are attributed to the non-controLLing interest even if that resuLts in ^a deficit ba[ance.

Å change in the ownership interest of ^a subsidiary, without ^a [oss of controL, is accounted for as an equity transaction. If the Group Loses controL over ^a subsidiary, it:

Derecognises the assets (incLuding goodwiLL) and LiabiLities of the subsidiary
Derecognises the carrying amount of any non-controlLing interest
Derecognises the cumulative translation differences, recorded in equity
Recognises the fair vaLue of the consideration received
Recognises the fair vaLue of any investment retained
Recognises any surplus or deficit in profit or [oss
Rec[assifies the parent's share of components previously recognised in other comprehensive income to profit or (oss or retained earnings, as appropriate.

Non-controLLing interests represent the portion of profit or [oss and net assets not heLd by the Group and are presented separateLy in the income statement and within equity in the consolidated statement of financiaL position, separateLy from parent shareholders equity.

Note ^I Åccounting poticies ~ontinu~)

1.2 Investment in associates

The Groups lnvestment in its associates, an entity in which the Group has significant inftuence, is accounted for using the equity method.

Under the equity method, the investment in the associate is inicially recognised at fair va(ue. The carrying amount of the investment is adjusted to recognise changes in the Group's share of net assets of the associate since the acquisition date. GoodwiLl retating to the associate is inc[uded in the carrying amount of the investment and is neither amortised nor individuaUy tested for impairment.

The income statement ref(ects the Groups share of the resu(ts of operations of the associate. When there has been ^a change recognised direct(y in the equity of the associate, the Group recognises its share of any changes, when applicab(e, in the statement of changes in equity. Unrea(ised gains and losses resulting from transactions between the Group and the associate are e(iminated to the extent of the interest in the associate.

The Groups share of profit or (oss of an associate is shown on the face of the income statement and represents profit or (oss after tax and non-controlLing interests in the subsidiaries of the associate.

The financia( statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting po(icies in Line with those of the Group.

After app[ication of the equity method, the Group determines whether it is necessary to recognise an impairment (oss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group ca(cuLates the amount of impairment as the difference between the recoverab(e amount of the associate and its carrying va(ue, then recognises the (oss as share of (oss of an associate in the income statement.

Upon (oss of significant influence over the associate, the Group measures and recognises any retained investment as its fair va(ue. Any differences between the carrying amount of the associate upon (oss of significant influence and the fair va(ue of the retaining investment and proceeds from disposa( is recognised in profit or (oss.

1.3 Currency

Trans(ation differences are taken to profit or (oss. Transaction in foreign currencies are initiatLy recorded in the functiona( currency rate quoted at the date of the transaction. Monetary assets and (iabi(ities denominated in foreign currencies are retrans(ated at the functionaL currency exchange rate at the balance sheet date. Non monetary items that are measured in terms of histoncal cost in ^a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non monetary items measured at fair va(ue in foreign currency are trans(ated using the exchange rates at the baLance sheet date.

The Group's consotidated financial statements are presented in NOK. Income statement in foreign subsidianes are trans(ated into NOK using the average exchange rate for the penod (month). Assets and (iabi(ities in foreign subsidiaries, incLuding goodwiLL and adjustments of fair va(ue of identifiable assets and LiabiLities arising on the acquisition of subsidiaries are translated into NOK using exchange rate at the ba(ance sheet date. The exchange differences arising from the trans(ation are recognised directLy as other comprehensive income in equity.

1.4 Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. Discontinued operations are presented separate(y in the income statement in accordance with IFRS 5 both for fisca( years 2012 and 2013

1.5 Financial assets

Initiat recognition

Financial assets within the scope of lAS 39 are c(assified as financia( assets at fair value through profit or (oss, (oans and receivab(es, held-to-maturity investments or avai(ab(e-for-sa(e financial assets as appropriate. The Group determines the cLassification of its financia( assets at initia( recognition. FinanciaL assets are recogriised initial(y at fair vaLue plus, in the case of investments not at fair va(ue through profit or (oss, direct(y attributable transaction costs. The Group's financia( assets incLude, in addition to cash and cash equiva(ents, trade and other receivables and investment in shares in (iquidity fund classified at fair va(ue through profit and (oss.

Badger Explorer Group 2013 - Notes

Subseguent measurement

The subsequent measurement of financial assets depends on their classification as described below:

Financial assets at fair vatue through profit ar loss

Financia( assets at fair va(ue through profit or (oss inctudes financia( assets held for trading and financia( assets designated upon initial recognition at fair vatue through profit or (oss. Financia( assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financiat assets at fair value through profit and (oss are carried in the statement of financial position at fair value with changes in fair value recognised in finance income ar finance cost in the income statement.

Loans and receivables

Loans and receivables are non-derivative financia( assets with fixed ar determinable payments that are not quoted in an active market. After initial measurement, such financiat assets are subsequently measured at amortised cost using the EIR (Effective Interest Rate) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees ar costs that are an integraL part of the EIR. The EIR amortisation is included in financiaL income in the income statement. The losses arising fram impairment are recognised in the income statement in finance costs for Loans and in cost of sales or other operating expenses for receivables. This category includes accounts receivabte and other receivabLes carried at amortised cost or at normal amount Less provision for bad debt were this can be regarded as ^a reasonabLe proxy for fair value.

1.6 Financial Iiabi(ity

Financial Liabitities within the scope lAS 39 are ciassified as financial liabilities at fair vaLue through profit or (oss, loans and borrowings as appropnate. The Group determines the cLassification of its financial liabiLities at initial recognition.

The Groups financial liabilities include trade and other payables, loans and borrowings.

Subseguent measurement

The measurement of financial Liabilities depends on their classification as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit ar (oss include financial Liabitities held for trading and financial liabitities designated upon initial recognition as at fair value through profit ar (oss.

FinanciaL liabilities are classified as heLd for trading if they are acquired for the purpose of selling in the near term. This category incLudes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by lAS 39. Separate embedded denvatives are also cLassified as held for trading unLess they are designated as effective hedging instruments.

Gains or losses on liabilities heLd for trading are recognised in the income statement.

FinanciaL liabilities designated upon initial recognition at fair va(ue through profit and (oss so designated at the initial date of recognition, and only if criteria of lAS 39 are satisfied. The Group has not designated any financial Liability as at fair value through profit ar (oss.

Loans ond borrowings

After initial recognition, interest beanng loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the income statement when the liabilities are derecognised as we(L as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is inc(uded in finance costs in the income statement.

Derecognition

Å financial LiabiLity is derecognised when the obligation under the LiabiLity is discharged or canceLled or expires.

Offsetting of financial instruments

Financial assets and financial Liabilities are offset and the net amount reported in the consolidated statement of financiat position if, and only if:

there is ^a currently enforceabLe Legat right to offset the recognised amounts and
there is an intention to settie on ^a net basis, or to realise the assets and settle the LiabiLities simultaneousLy.

1.7 Inventory

Inventory is vaLued at the Lower of cost and net reaLisable vaLue.

Cost incurred in bnngtng raw materiats to its present Location and condition are accounted for by purchase cost on ^a first in, first out basis.

Cost incurred in bringing finished goods and work in progress to its present Location and condition are accounted for by cost of direct matenals and labour and ^a proportion of manufactunng overheads based on normal operating capacity but excluding borrowing costs.

Net realisabLe vaLue is the estimated setling price in the ordinary course of business, [ess estimated cost of compLetion and the estimated cost necessary to make the sale.

1.8 Cash and cash equivalents

Cash incLudes cash in hand and at bank. Cash equivaLents are short-term Liquid investments that can be converted into cash within three months and to ^a known amount, and subject to an insignificant risk of change in value.

1.9 Accounts receivable

Accounts receivable are part of the category Loans and receivabtes and are recognised in the baLance sheet at nomina[ value Less provisions for doubtfuL debts.

1.10 Fixed assets

Fixed assets are carried at cost Less accumu[ated depreciations and impairment Losses. When fixed assets are soLd or disposed of, the gross carrying amount and accumu[ated depreciation are derecognised, and any gain or Loss on the sale or disposat is recognised in the income statement.

The gross carrying amount of fixed assets is the purchased price, including duties/taxes and direct acquisition costs reLating to making the asset ready for use. Subsequent costs, such as repair and maintenance costs, are recognised in profit or Loss as incurred. When increased future economic benefits as ^a resutt of repair/maintenance work can be proven, such costs wit[ be recognised in the balance sheet as additional to fixed assets.

Depreciation is calcutated using the straight-Line method over the fo[Iowing penods: Buildings: 25 years Plant and machinery: 6 - 10 years Fixtures, fittings and vehicies: 3 - 5 years

The depreciation period, the depreciation method and the residuaL vaLue of fixed assets are evaluated annuaLly.

1.11 Intangible assets

Intangible assets acquired separateLy are measured on initiat recognition at cost. The cost of intangible assets acquired in ^a business combination is fair vaLue as of the date of acquisition. FotLowing initial recognition, intangible assets are carried at cost Less any accumu[ated amortisation and any accumulated impairment Losses. InternaLty generated intangible assets, excLuding capitalised deveLopment costs, are not capitalised and expenditure is expensed as incurred.

Intangible assets with finite Lives are amortised over the usefuL economic Life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangibte asset with ^a finite useful Life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of the future economic beriefits embodied in the asset are accounted for by changing the amortisation penod or method, as appropnate, and are treated as change in accounting estimates. The amortisation expense on intangible assets with finite Lives is recognised in profit or Loss.

Intangible assets are capitaiised if it is probabLe that the expected future financial benefits referred to the asset wiLL accrue to the Group, and that the cost can be caicuLated in ^a reliable matter.

Intarigible assets with indefinite usefuL lives are tested for impairment annuaily at the cash generating unit LeveL. Such intangibles are not amortised. The useful Life of an intangibLe asset with an indefinite Life is reviewed annualty to determine whether indefinite Life assessment continues to be supportabte. If not, the change in the usefut life assessment from indefinite to finite is made on ^a prospective basis.

Gatns or losses ansing from derecognition of an intangibLe asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or Loss when the asset is derecognised.

Patents and licenses

Cost relating to patents and Licenses are capitalised as incurred. Depreciation is recognised in the baLance sheet arid depreciated using the straight-Line method over the expected usefut life, commencing when the technoLogy is ready for its intended use. The expected useful life of patents and Licenses vanes from ⁵ to ²⁰ years.

Research and development

Costs relating to research are expensed as incurred. Development expenditures reLated to the Badger Explorer development project are recognized as an intangibLe asset when the Group can demonstrate:

The technicat feasibiLity of compieting the intangibie asset so that it wilL be availabie for use or saLe.
The Groups intention to compiete and the Groups ability to use or seil the asset.
How the asset wilL generate future economic benefits.
The ability to measure reiiabLe the expenditure during development.
The avaiLabiLity of resources to complete the asset.

When aLL the above criteria are met, the costs reLating to development start to be recognized in the baiance sheet. All costs reLated to the Badger Explorer deveLopment project is capitaLised continuousLy every month. Project manager performs ^a continuous assessment to identify whether the cost reLates to the development project or to normal operations. Internal hours used in the deveLopment project are capitalised at cost (no mark-up).

Costs that have been expensed in previous accounting periods are not recognized in the baLance sheet.

Recognized deveiopment costs are depreciated on ^a straight-Line basis over the estimated usefuL life for the asset, usuaLly not exceeding 10 years. Depreciation starts when the asset is ready for use. No depreciation has yet been performed for the deveLopment projects. The fair vaLue of the deveLopment costs wiLL be caLcuLated when there is an indication of change in vaLue.

Goodwill

Goodwili is initiaiLy measured at cost being the excess of the aggregate of consideration transferred and the amount recognised for non-controLiing interest over the net identifiable assets acquired and Liabilities assumed. If this consideration is Lower than the fair vaLue of the net assets of the subsidiary acquired, the difference is recognised in profit or Loss.

After initiaL recognition, goodwill is measured at cost Less any accumutated impairment Losses. For the purpose of impairment testing, goodwiLL acquired in ^a business combination is, from the acquisition date, aLLocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or Liabiiities of the acquire are assigned to those units.

The Group assesses whether there are any indications that goodwili is impaired at each reporting date. GoodwiLL is tested for impairment, annuaLLy and when circumstances indicate that the carrying vaLue may be impaired.

lmpairment of goodwill is determined by assessing the recoverable amount of the cash-generating units, to which the goodwilt retates. Where the recoverable amount of the cash-generating units is [ess than their carrying amount an impairment (oss is recognised. lmpairment [osses relating to goodwit[ cannot be reversed in future penods.

1.12 Provisions

Provisions are recognised when the Group has ^a present obligation ([egal of constructive) as ^a result of ^a past event, it is probable that an outftow of resources embodying economic benefits wiL[ be required to settle the obligation and ^a reliable estimate can be made of the amount of the obligation. When the Group expects some or aLl of ^a provision to be reimbursed, for exampLe, under and insurance contract, the reimbursement is recognised as ^a separate asset, but only when the reimbursement is virtual[y certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

1.13 Principles for revenue recognition

Revenue is recognised to the extent when it is probable that the economic benefit wil[ f(0w to the Group and the revenue can be retiably measured, regardtess of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of value added tax and discounts. The fol[owing specific recognition cnteria must a[so be met before revenue is recognised:

Revenue from the sate of goods is recognised when the significant risk and rewards of ownership of the goods have passed to the buyer, usualLy on delivery of the goods.

Revenue from sale of engineenng services is recognised by reference to the stage of completion. Stage of completion is measured by reference to labour hours incurred to date as percentage of total estimated Labour hours for each contract. Where the contract outcome cannot be measured retiab[y, revenue is recognised onty to the extent that the expenses incurred are eligible to be recovered.

Revenue from dividends is recognized when the Group's right to receive the payment is established.

Revenue from rental income arising from operationaL leases on instruments is accounted for on ^a straight line basis over the Lease terms.

Interest income is recognised in the income statement based on the effective interest method as they are earned.

^I .14 Public grants and contribution from partners

Public grants are recognised where there is reasonabLe assurance that the grant wiLL be received and all attaching conditions will be complied with. When the grants relate to an expense item, it is recognised as income over the period necessary to match the grant on ^a systematic basis to the cost it intends to compensate. Where the costs are related to ^a development project and capitalised, the belonging grants are deducting the carrying amount of the asset.

PubLic grants received to date are related to (ref. note 9):

deveLopment projects and deducted in the carrying amount of the related project
the purchase of ^a long Leasehold building, plan and equipment

Where the grants relate to an asset, it is recognised as deferred income and reLeased to income in equaL annual amounts over the expected useful Life of the related assets.

When the contributions from partners are subject to specific requirements, the contnbutions are recognised in the balance sheet as long term liabilities. When the contributions from partners are not subject to specific requirements, the contributions are recognised in the balance sheet as ^a deduction of the carrying amount of the related project. ref. note 14.

Where the Group receives non-monetary grants, the assets and the grants are recorded at nominal amounts and released to profit and [oss over the expected useful life of the relevant assets by equal annual instaLments.

Note I Accounting poIic~s~o~tinL~s)

1.15 Incometax

The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are catcutated on all taxable temporary differences on assets and tiabilities.

Deferred income tax liabilities are recognised for all taxable temporary differences except

(i) where the deferred income tax liability anses from the initiat recognition of goodwi[l or of an asset or Liability in ^a transaction that is not ^a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

(ii) in respect of taxable temporary differences are associated with investments in subsidiaries, where the timing of the reversat of the temporary differences can be controlled and it is probabte that the temporary differences witt not reverse in the foreseeabte future.

Deferred tax and deferred tax assets are recognised at their nominat value and ciassified as non-current asset (tong term Liabilities) in the balance sheet.

Deferred tax assets are recognised for all unused tax Losses to the extent that it is probabte that taxable profit wiLL be available against which the losses can be utitised. Management judgment is required to determine the amount of deferred tax assets that can be recogniseci, based upon the Likely timing and the levet of future taxabte profits together with future tax ptanning strategies.

The tax payable and deferred tax are recognised directly as other comprehensive income in equity to the extent that they retate to factors that are recognised directty as other comprehensive income in equity.

1.16 Contingent habilities and assets

Contingent liabilities are defined as

(i) possible obligations resutting from past events whose existence depends on future events.

(ii) obligations that are not recognised because it is not probable that they witt Lead to an outftow of resources.

(iii) obligations that cannot be measured with sufficient reLiability.

Contingent liabilities are not recognised in the annuat financiat statements. Significant contingent Liabitities are stated, with the exception of contingent tiabilities where the probability of the Liabitity occurnng is remote.

^A contingent asset is not recognised in the annuat financiaL statements, but is disctosed if there is ^a certain Levet of probabitity that ^a benefit will accrue to the Group.

1.17 Events after the balance sheet date

New information received after the balance sheet date retating to events and transactions incurred before the balance sheet date is reflected in the batance sheet/income statement. Events after the batance sheet date that do not affect the Groups position at the batance sheet date but affect the Groups position in the future are stated if significant.

1.18 Use of estimates when preparing the annual financial statements

Estimates and their undertying assumptions that affect the application of accounting pnnciptes and reported amounts of assets and tiabitities, income and expenses are based on historic experience and other factors considered reasonabte under the circumstances. The estimates constitute the basis for the assessment of the net book vatue of assets and liabitities when these values cannot be denved from other sources. Actual resutts may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. In particutar, information about significant areas of estimation uncertainty and criticat judgments in apptying accounting poLicies that have the most significant effect on the amount recognized in the financial statements, is given in the foLLowing notes:

Not~1 Accounting policies (~ontinues)

lmpairment test for intangible assets (note 20)
Capitalised development costlREtD cost (note 9)

The preparation of the Groups consolidated financial statements requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabitities, and the disctosure of contingent Liabilities, at the end of the reporting period. However, uncertalnty about these assumptions and estimates could resutt in outcomes that could require ^a materiaL adjustment of the carrying amount of the asset or Liability affected in the future.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have ^a significant risk of causing ^a materiat adjustment of the carrying amounts of assets and liabilities within the next financial year are discussed below.

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. GoodwilL and capitalised development cost are tested for impairment annuaLLy and at other times when such indicators exist. The Groups impairment test for goodwilt and capitaLised development cost is based on value in use calcuLations that use ^a discounted cash ftow modeL The cash fLows are derived from the budget for the next five years and do not inctude restructuring activities that the Group is not yet committed to or significant future investments that wilL enhance the asset base of the cash generating unit being tested.

The recoverable amount is most sensitive to the discount rate used for the discounted cash f10w model as weLL as the expected future cash-inflows and the growth rate used for extrapoLation purposes. The key assumptions used to determine the recoverable amount for the cash generating unit, including ^a sensitivity analysis, are further explained in note 20. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. This is especiatly relevant to capitaLised development costs.

Development costs are capitalised in accordance with the accounting poticy. Initial capitalisation of costs is based on managements judgement that technologicaL and economicaL feasibility is confirmed. Project manager performs ^a continuous assessment to identify whether the cost retates to the deveLopment project or to normaL operations. Internat hours used in the deveLopment project are capitahsed at cost (no mark-up). CapitaLised carrying amount for the development project amounts to NOK 130.785 miLlion as of 31 December 2013, see note 9.

The capitaLised development of NOK 130.785 million is the main asset of the BXPL Group, equivalent to 78.7% of totaL assets. Future saLes of Badger operations has ^a minimum net price of USD ¹² miLLion, thus present capitalised value represents roughly ¹¹ sold operations. Via the deveLopment agreement the partners have ^a first nght to buy Badger services at agreed terms. This nght to buy the first operations secures the BXPL Group prime customers and Likely delivery of many units. The year-end valuation of the capitalised technology must be seen in this perspective. The Group is for the time being negotiating the next phase with the four/five sponsoring partners, their indicative willingness to enter such long term deveLopment agreement support the valuation as peryear-end 2013.

Costs that have been expensed in previous accounting penods are not recognized in the balance sheet.

1.19 Leasing

Note I A~counting~policies (continues)

The determination of whether an arrangement is, or contains, ^a lease is based on the substance of the arrangement at inception date, whether fulfitment of the arrangement is dependent on the use of ^a specific asset or assets or the arrangement conveys ^a right to use the asset, even if that nght is not expticitly specified in an arrangement.

Finance leases

Leases where the Group takes over the main part of the risk and return retated to the ownership of the asset are classified as finance [eases. At commencement of the Lease period finance Leases are calcutated to an amount corresponding to real value of Lowest Lease present vaLue, whichever is the Lowest, less accumulated depreciations and devaluations. When caLculating the present vatue of the Lease the impticit interest cost of the Lease is used when it can be determined. If it cannot be determined, the Group's marginal borrowing rate in market is used. Direct costs retating to the lease are included in the assets cost pnce.

The depreciation period is consistent with equivalent assets that are owned by the Group. If it is not certain that the Group wiLI take over the asset when the Lease expires, the asset is depreciated over the leases term or the depreciation period for equivalent assets owned by the Group, whichever is the shorter.

Oierating leases

Leases for which most of the risk rests with the other contracting party are c[assified as operating Leases. Operating lease payment are ciassified as operating costs in the income statement on ^a straight-Line basis over the Lease term.

1.20 Share options

The Group measures the cost of equity-settled transactions with empLoyees by reference to the fair vatue of the equity instruments at the date at which they are granted. Estimating fair vaLue requires determining the most appropriate valuation model for ^a grant of equity instruments, which is dependent on the terms and conditions of the grant. This aLso requires determining the most appropnate inputs to the vaLuation modeL inctuding the expected life of the option, voLatiLity and dividend yietd and making assumptions about them. The assumptions and models used are disclosed further beLow and in note 6.

The cost of equity-settled transactions is recognised, together with ^a corresponding increase in equity, over the period in which the performance and/or service conditions are fuLfiLLed. The cumutative expense recognised for equity-settted transactions at each reporting date untiL the vesting date refLects the extent to which the vesting period has expired and the Groups best estimate of the number of equity instruments that wiLL uLtimatety vest. The income statement expense or credit for ^a period represents the movement in cumulative expense recognised as the beginning and end of that period.

No expense is recognised for awards that do not uttimately vest, except for equity-settted transactions where vesting is conditional upon ^a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that aLL other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognised is the expense as if the terms had not been modified, if the original terms of the award are met. An additionaL expense is recognised for any modification that increases the total fair vaLue of the share-based payment transaction, or is otherwise beneficial to the emptoyee as measured at the date of modification.

Note I Accounting polides (conth~ues)

Where an equity-settled award is cancelied, it is treated as if it vested on the date of canceiiation, and any expense not yet recognised for the award is recognised Immediatety. Thls includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if ^a new award is substituted for the cancelled award, and designated as ^a repLacement award on the date that it is granted, the canceiled and new awards are treated as if they were ^a modification of the original award, as descnbed in the previous paragraph. ALL canceiiations of equity-settted transaction awards are treated equatty.

1.21 Impairment of assets

The Group assesses whether there are any indicators of impairment for alt assets at each reporting date.

An assessment of impairment losses on assets is made when there is an indication of ^a faLL in value. If an assets carrying amount is higher than the asset's recoverabLe amount, an impairment [oss wiiL be recognised in the income statement. The recoverable amount is the higher of the fair vatue [ess costs to seil and the discounted cash f[ow from continued use. The fair vaiue less costs to seil is the amount that can be obtained from ^a sale to an independent third party minus the sales costs. The recoverable amount is determined separately for all assets but, if this is impossible, it is determined together with the entity to which the assets beLong.

Impairment Losses recognised in the income statements of previous periods are reversed when there is information that the need for the impairment [oss no Longer exists or is not as great as it was. However, no reversat takes place if the reversal leads to the carrying amount exceeding what the carrying amount wou[d have been if normal depreciation periods had been used.

1.22 Cash flow statement

The cash fiow statement is prepared in accordance with the indirect method and based upon lAS 7.

1.23 Costs related to equity transactions

Costs directiy retated to equity transactions are recognised direct[y on the equity after deduction of tax.

1.24 Changes in accounting policies and disclosures

The Group has impiemented aLL changes in standards and interpretations for 2013. The implementation of these changes have not resuited in any changes to the group beyond the information given in the notes.

Standards and interpretations that are issued up to the date of issuance of the consoiidated financial statements, but not yet effective, are disctosed below. The Group's intention is to adopt the relevant new and amended standards and interpretations when they become effective, subject to EU approvai before the consotidated financiaL statements are issued.

Standards issued but not yet effective or impiemented up to the date of issuance of the Group' ^s financial statements This Listing of standards and interpretations are those that the Group reasonably expect to have an impact on disclosures, financiaL position or performance when appiied in future periods.

lAS 28 lnvestment in Associates and Joint Ventures

As ^a consequence of the new standards IFRS 11 Joint Arrangements and IFRS 12 DiscLosure of Interests in Other Entities, lAS 28 lnvestments in Associates has been renamed lAS 28 lnvestment in Associates and Joint Ventures, and descnbes the appiication of the equity method to investments in joint ventures in addition to associates. Within the EU/EEA area, the amendments are effective for annual periods beginning on or after i January 2014.

Badger Exp(orerGroup 2013- Notes

Note 'I ~Åccounting potides (continues)

IFRS 9 Financial lnstruments: Classification and Measurement

IFRS 9, as issued, reftects the two first phases of IASB's work on the replacement of lAS 39, which are ciassification and measurement of financial assets and financial tiabiLities and hedge accounting. Third and last phase of this project wi[l address amortised cost measurement and impairment of financiat assets. The mandatory effective date of IFRS 9 has been removed to allow sufficient time for entittes to prepare to apply the new Standard. The IASB have decided that ^a new date shoutd be decided upon when the entire IFRS 9 project is closer to completion.

The Group witL evaluate potential effects of IFRS 9 as soon as the ftnaL standard, including all phases, is issued.

IFRS 12 Disclosure of lnterests in Other Entities

IFRS 12 applies for enterprises wfth interests in subsidtaries, joint arrangements, associates and structured entities. IFRS 12 replaces the dtsclosure requirements that were previousty incLuded in lAS 27 Consolidated and Separate FinanciaL Statements, lAS 28 lnvestments in Assoctates and lAS 31 lnterests in Joint Ventures. A number of new disctosures are aLso requtred. Within the EU/EEA area, IFRS 12 is effective for annuat periods beginning on or after 1 January 2014.

Annual Improvements 2010-2012

IFRS 2 Share-based Payment

Performance condition and service condition are defined in order to ctanfy various issues, including the foLtowtng:

A performance condition must contain ^a service condition
A performance target must be met whi[e the counterparty is rendering service
A performance target may relate to the operations or activities of an entity, or to those of another entity in the same group
A performance condition may be ^a market or non-market condition

• If the counterparty, regardless of the reason, ceases to provide service dunng the vesting period, the service condition is not satisfied

lAS 24 Related Porty Disclosures

The amendment cLartfies that ^a management entity - an entity that provides key management personnel services - is ^a reLated party subject to the related party discLosures. In addition, an entity that uses ^a management entity is required to disclose the expenses incurred for management services.

The Group does not anticipate that the implementation of the standards and interpretations detailed above wiLL have any matenaL impact on the consolidated accounts when they are implemented other than in terms of the information that wiLl have to be provided in the notes.

Note Z Public grants and developmeot costs

(Àll figures in NOK)

The Group has previously received public grants from the Research Council of Norway (RCN) and Skattefunn for the Badger Exptorer development project in Badger Explorer ASA (BXPL) and the Plasma Channet Drilling project in Badger Plasma Technology AS. The Badger Explorer development project has been pledged grants from RCN and Skattefunn for both ²⁰¹² and 2013. All development costs in the Badger Explorer Group retated to these projects are capitalised except of NOK 3.267 milLion for 2013 and NOK 2.827 million for ²⁰¹² retated to ^a IFRS restriction on capitalisation of own personnel cost. In ²⁰¹³ BXPL received ^a public grant from Innovation Norway of NOK ¹⁴ million for BXPL's ongoing Badger Explorer Development Program. BXPL aLso received grants from RCN of NOK 5.071 milLion and Skattefunn of NOK 1.280 million. Public grants related to the deveLopment projects are deducted in the carrying amount of the reLated asset.

	20 13	20 12
Int t i lat ed sh d sh uiv aL to ts er es nc om e re ca an ca eq en	36 4 38 5	78 1 62 4
of Lo le bs idi d sh on ss sa su ar y an are s	0	-16 6 04 5
Sh (lo ) o of of it I f a iat are pr ss ss oc es	-38 0 44 3	0
Ot he r f ina ial inc nc om e	22 32 5	38 34 4
Ot he r f ina ial nc ex pe ns es	-2 65 8	0
Cu in rre nc y ga	34 8 57 7	10 73 8
Cu los rre nc y s	-33 6 67 6	-50 84 2
m Ne t f ina ia l i fro inu ing ion te nt at nc ms co op er s	15 50 9	61 3 81 7
m t f fro Ne ina ia l i te dis nt inu ed at ion nc ms co op er s	0	-2 72 45 4
Ne t f ina ia l i te nc ms	15 50 9	34 1 36 3

(ALl figures in NOK)

In et e co m ax ex pe ns	20 13	20 12
Pa ble ta ya x	0	0
Ot he r	0	-4 13 83 6
m Ta fro iou x pr ev s ye ar s	0	10 3 52 3
Ch in de fe d ta an ge s rre x	0	0
m To l t fro inu ing ion ta nt at e ax ex pe ns co op er s	0	0
m To l t fro dis inu ed ion ta nt at ax ex pe ns e co op er s	0	-3 10 31 3

No 4 Ta (co nti !~ s) te ue x
NO (Al L f igu in K) res

Su mm ar y	of	te m po ra ry	dif fe re nc es :
---------------------	----	---------------------------	----------------------------------

To l d ef d nis ed in th St f F ina ial Po sit ion ta ta t r at t o er re as se ec og e em en nc x	0	0
Va Lu ati low at on ce an	33 79 7 03 9	28 41 1 58 8
To l d ef d ta ta t er re x as se	-3 3 79 03 9 7	-2 8 41 1 58 8
Fix ed ts as se	-1 85 79 5	38 71 1
Lo rri ed fo d ss ca rw ar	-33 61 1 24 4	-28 45 0 30 0
De fe d ta t rre as se x	20 13	20 12
St f F at t o ina ial Po sit ion em en nc
De fe d ta t rre x as se	-3 3 79 7 03 9	-2 8 41 1 58 8
To l ta	-1 25 17 4 22 0	-10 1 46 9 95 8
Lo rri ed fo d ss ca rw ar	-12 4 48 6 08 9	-10 1 60 8 21 3
Fix ed ts as se	-6 88 13 1	13 82 55

Deferred tax asset Is not recognised in the Statement of Financiat Position as the BXPL Graup is in ^a deveLopment phase and is currentLy generating Losses.

Lo rri ed fo d of De mb 31 20 13 ss ca rw ar as ce er	20 13	20 12
Un tim ite d ing fo d ca rry rw ar	12 4 48 6 08 9	10 1 60 8 21 3
Ef fe ct ive ta te x ra	20 13	20 12
m Pr of it / (10 ) b ef fra inu ing ion 55 ta nt at or e co op er s x	-19 47 0 39 0	-17 92 8 30 7
m Pr of it / ((o ) b ef fra dis nti ed ion ta at ss or e x co nu op er s	-4 34 3 57 6	-3 38 0 00 0
% m of fo fra 28 ta ing be ta nt inu ing at ion re x ea rn s x co op er s	-5 45 1 70 9	-5 01 9 92 6
% m 28 of ing be fo fra dis nti ed ion ta ta at re x ea rn s x co nu ap er s	-1 21 6 20 1	-94 6 40 0
Ch in de fe d nis ed in th St f F ina ial Pa sit ian ta t n ot at t o an ge s rre as se rec og e em en nc x	5 38 5 45 1	5 36 2 88 5
% % m Ef fe du ch in fra 28 27 th de fe d ct ta ta te to ta t e an ge s x ra on e rre x as se	1 2 51 74 2	0
iffe ffe Pe t d d at he cts * rm an en re nc es an r e	30 71 7	29 3 12 8
m Ca lcu lat ed fro in ui ion ta st nt at x co co ng op er s	0	0
m Ca lcu lat ed fro dis inu ed ion ta st nt at co co op er s x	0	-3 10 31 3
m Ef fe cti fro inu ing ion ta te nt at ve x ra co op er s	0 %	0 %
m Ef fe fro cti ta te dis nt inu ed at ion ve x ra co op er s	0 %	% 33

The tax cost is related to tax on the profit in Severn Subsea TechnoLogies Ltd.

Note 5 Earnings pe~r share

(All figures in NOK)

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the Parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit for the year attnbutable to ordinary equity hoLders of the Parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of dilutive potential shares.

Options, awarded to employees at the end of 2006 and 2007, are waived and not inctuded in the calculation of diluted earnings per share. The effect of options awarded options to emptoyees in September 2009, June 2010, October 2011 and September 2013 are all included in the catculation of dituted earnings per share for 2012 and 2013.

	20 13	20 12
Pr of it (Lo ss) tri bu ble uit ho lde of th Pa at ta to nt eq rs e re y	-23 86 8 34 4	-20 46 3 41 6
m Pr of it (lo ) f dis inu ed ion nt at ss ro co op er s	-4 34 3 6 57	-3 38 0 00 0
W eig hte d din din sh tst e g av er ag ou an or ar y are s	18 53 7 28 8	18 53 7 28 8
Ef fe of di lut ion ha tio ct - s re op ns	50 66 7	92 26 5
W eig hte d din di lut ed sh tst av er ag e ou an g are s	18 58 7 95 5	18 62 9 55 3

m Ea ing ha fro in uin ion nt at rn s pe r s re co g op er s	20 13	20 12
Or din ar y	-1 ,29	-1 ,10
Di lut ed	-1 ,28	-1 ,10
m Ea ing ha fro dis inu ed ion nt at rn s pe r s re co op er s	20 13	20 12
Or din ar y	-0 ,23	-0 ,18
Di ed tut	-0 ,23	-0 ,18

Note 6 Salaries, other benef~p4number of e~ployees

Pa ol l a nd La ted sts yr re co	20 13	20 12
Sa lar ies d tio an va ca n pa y	12 36 4 13 6	13 61 4 45 1
Em rs' tio l i nb ion pto nt ut ce ye na na ns ur an co s	1 9 62 40 1	2 38 1 05 8
Op tio pla t ( l. tio l i rib ion s) * nt ut n n pa ym en mc na na ns ur an ce co	-1 58 9 63 7	1 2 04 38 8
Co Re ion th Bo ard of Di d th No mi tio itte rat to cto e e n e mu ne re rs an na m m	1 11 5 00 0	1 18 5 00 0
Ot he r b ef its (m d. ion he ) en pe ns sc me	1 0 56 48 5	I 19 3 46 5
m To l s ala rie d el fro inu ing ion ta nt at s an pe rso nn ex pe ns es co op er s	14 90 8 71 1	19 57 8 36 2
m To l s ala rie d el fro dis inu ed ion ta nt at s an pe rso nn ex pe ns es co op er s	0	3 40 6 31 1
To l s aL ies d el ta ar an pe rso nn ex pe ns es	14 90 8 71 1	22 98 4 67 3

Total of NOK 2.402 million relates to the share options costs due to severance of employment of previous CEO Mr. David Blacklaw. Total of 370,579 share options, granted in 2011, forfeited prior to vesting on 15 September 2013.

f e Nu be plo m r o m ye es	20 13	20 12
m Th mb of plo in fuL L t im uiv ale fro inu ing ion nt nt at e av er ag e nu er em ye es e eq co op er s	13	14
m Th mb of plo in fu ll t im uiv ale fro dis nti ed ion nt at e av er ag e nu er em ye es e eq co nu op er s	26	34

Pensions

The pension scheme in Badger Exptorer ASA is ^a defined contribution scheme where agreed contributions are expensed as paid. Contributions range from 4% to 7% of the employee's salary. The scheme fulfils the Legal requirements for occupationaL pension schemes (OTP). The Group has no further pension commitments when agreed contributions are paid. The Groups contnbution costs are charged to the income statement in the year in which the contribution applies. Managing director of Severn Subsea Technologies Ltd. has accrued benefits under money purchase pension schemes in 2012.

	20 13	20 12
m Co rib ion ed du rin th fro inu ing ion nt ut nt at g e s ex pe ns ye ar co op er s	47 7 18 1	59 3 44 7
m Co nb ion ed du rin th fro dis nti ed ion nt ut at s ex pe ns g e ye ar co nu op er s	0	8 99 5
Co rib ion ed du rin th nt ut g e s ex pe ns ye ar	47 7 18 1	60 2 44 2

Note 6 Salaries, other benefits, number of employees (continues)

(All figures in NOK)

	20 13
	Sa lar y	Ot ef he r B its en	Pe jon ns
Re atj mb of Ma to nt on m un er me er s na ge me			he sts me sc co
I ) EO Ch ief Ex uti Of fic (C ~ ec ve er	1 35 6 83 1	29 1 94 3	36 46 4
EO Ch ief Ex uti Of fic (C 2) ec ve er	52 5 00 0	10 4 37 9	15 41 8
O Ch ief Fin cia t O ffi r ( CF an ce	98 9 60 5	18 55 4	27 83 7
Ch ief Te ch Of fic (C TO ) to no gy er	1 0 13 08 4	23 18 7	52 80 3
Sr S . V ice Pr ide nt Bu sin De Et tr at es es s v. eg y	94 7 33 6	14 13 2	26 25 6
Ge raL M " ne an ag er	11 95 66 5	28 45 0	52 98 2
Le t A dv ise r & HR Ma ga na ge r	57 3 68 1	17 23 8	22 81 0

The Board of Dtrectors granted ^a bonus of NOK 100,000 to Mr. Steinar Bakke (CEO 2).

There was ^a change of Chief Executive Officer during 2013. Mr. David BLack(aw (CEO 1) left the Company on 15 September 2013 and Mr. Steinar Bakke (CEO 2) took office on 16 September 2013.

Manager Quality, Risk Et Supply Chain took up his new position as General Manager on I July 2013. The amount indicated above was paid for the entire year 2013.

Remuneration indicated above for CFO and Sr. Vice President Business 0ev. Et Strategy does not include any payments made in respect of performed consuttancy services. For transactions with retated parties see note 13.

At the end of 2013, Management of Badger Exptorer ASA consists of CEO, CFO, CTO, Sr. Vice President Business Dev. Et Strategy, General Manager and Legat Adviser Et HR Manager.

	20 12
	Sa lar y	Ot he r B ef its en	Pe jon ns
Re ion mb of Ma at to nt m un er me er s na ge me			he sts me sc co
Ch ief Ex uti Of fic (C EO )* ec ve er	1 6 85 23 0	20 6 08 4	54 83 5
Ch ief Fin cia l O ffi r ( CF O) an ce	1 6 48 58 5	29 03 4	58 79 2
Ch ief Of fic (C TO Te ch log 1 ) no y er **	67 2 31 6	89 64	16 37 2
TO Ch ief Te ch log Of fic (C 2) ** no er y	54 9 96 3	15 28 9	38 52 2
Sr St . V ice Pr ide Bu sin De Et nt rat es es s v. eg y	1 5 13 70 2	30 95 3	55 52 3
Ma r Q lity Ris k a nd Su ly Ch ain na ge ua pp ,	11 48 87 1	29 11 0	55 30 5

The Board of Directors granted ^a bonus of NOK 100,000 to Mr. David Blacklaw.

There was ^a change of Chief Technology Officer during 2012. Mr. Erting Woods (CTO 1) left the Company on 30 April 2012 and Mr. Øystein Larsen (CTO 2) was appointed on 1 JuLy 2012.

At the end of 2012, Management of Badger Explorer ASA consists of CEO, CFO, CTO, Sr. Vice President Business Dev. Et Strategy and Manager Quatity, Risk and Supply Chain.

Shares and options owned directLy or jndjrectly by members of Management as of 31 December 2013

	Sh are s	Op tio ns
Ch ief Of fic (C EO 2) Ex uti ve ec er	30 00 0	37 0 00 0
Ch l O r ( CF O) ief Fin cia ffi an ce	30 9 87 2	16 66 7
Ch ief Te ch Of fic (C TO ) to no gy er	0	5 0 00
Sr . V ice Pr ide Bu sin De Et St nt rat es es s v. eg y	22 9 42 2	25 00 0
Ge l M ne ra an ag er	0	25 00 0
Le t A dv ise r E t H R Ma ga na ge r	0	50 0 7
To l ta	56 9 29 4	44 9 16 7

Ch in sh tio d by be of an ge s ar e op ns ow ne me m rs Ma nt na ge me	Op tio of ns as I J an ua ry 20 13	Op tio ns fo rfe ite d in th io d ep er	Op tio ns d in th te gr an e rio d pe	Op tio of ns as 31 De mb ce er 20 13
O CE 1	37 0 57 9	37 0 57 9	10 0 00 0	10 0 00 0
O CE 2	0	0	37 0 00 0	37 0 00 0
To l ta	37 05 79	37 05 79	47 00 00	47 00 00

The previous option program came into effect in Q3 2009. According to the employee option program, 25,000 share options were granted to CFO, 15,000 share options to cro and 25,000 share options to Sr. Vice President Business 0ev. Et Strategy at stnke of NOK 10. Manager Quality, Risk and Supply Chain was granted 25,000 share options in 2010 at ^a strike of NOK 15. The options entitle purchasing of shares during the 3.2 years period until 15 November 2012. This period has been extended until three to ten days after the publication of Annual Report 2013. CFO exercised 8,333 share options dunng 2011. CTO exercised 8,333 share options during 2011. In 2012 ^a total of 16,667 share options, held by CTO 1, forfeited. CTO 1 left the Company on 30 April 2012 and the new CTO was appointed on 1 JuLy 2012. The new CTO was granted 5,000 share options. The Legal Adviser Et HR Manager was granted 7,500 share options. All options were "out of money" as of 31 December 2013.

In Q3 2011 Mr. David Blacklaw (former CEO) was granted 370,579 share options in BXPL at ^a strike pnce of NOK 19. These options must be exercised three to ten days after the publication of the Q3 2014 report. Mr. Blacklaw resigned as the CompanS's President and CEO on 15 September 2013. A total of 370,597 share options forfeited on 15 September 2013.

At the end of September 2013, BXPL entered into ^a consultancy agreement with Mr. David BLacklaw (former CEO). Mr. Blacklaw was granted 100,000 share options to acquire shares in BXPL at ^a strike pnce of NOK 7.50. The share options can be exercised from the effective date of the consultancy agreement until the day of the publication of the Company's Q4 2015 report and were 'in the money" as of 31 December 2013.

On 16 September 2013, Mr. Steinar Bakke took on the position as President and CEO. Upon commencement of the employment, Mr. Bakke was granted 370,000 share options in BXPL at ^a stnke price of NOK 6.50. 185,000 share options will vest on the day of the publication of the Company's Q4 2015 report. A further 185,000 share options will vest on the day of the publication of the Company's Q2 2017 report. The exercise of fully vested share options is at the sole of discretion of the option holder. ALL share options were 'in the money' as of 31 December 2013.

Remuneration to the Board of Directors and the Nomination Committee

Remuneration to the members of the Board of Directors for 2012, that was approved by the Annual General Meeting in 2013, is divided among the Board members as folLows: NOK 300,000 to the Chairman of the Board, NOK 150,000 to both Mrs. Kristine Holm and Mrs. Tone Kvåle with the addition of NOK 50,000 for her work in the Audit Committee, NOK 300,000 to Mr. Clive Mather, NOK 125,000 to Mr. John R. Wilson. Due to John R. Wilson's resignation from the Board, his remuneration for the period ²⁷ April ²⁰¹¹ - ⁸ October 2012 was calculated on pro rata basis.

The Remuneration to members of the Nomination Committee is divided as follows: NOK 25,000 to the Chairman of the Nomination Committee and NOK 15,000 to each of the member of Nomination Committee.

The Remuneration to the Board of Directors and the Nomination Committee, that was approved by the General AssembLy and paid in 2012 and 2013, is listed in table below:

Co Re ion th Bo d of Di d th No ina tio itte at to cto m un er e ar re rs an e m n m m e	20 13	20 12
Ma Ha - C ha irm of th Bo d, Au dit Co itte 20 11 /2 01 2 rcu s ns so n an e ar m m e	30 0 00 0	20 0 00 0
lm Kr ist ine Ho - B rd mb /2 20 11 01 2 oa me er	15 0 00 0	15 0 00 0
åL To Kv - B rd mb , A ud it C itte 20 11 /2 01 2 ne e oa me er om m e	20 0 00 0	20 0 00 0
Cl /2 ive Ma th - B rd mb 20 11 01 2 er oa me er	30 0 00 0	30 0 00 0
Oc Jo hn R. W iLs - B rd mb (27 Ap ril 20 11 - 8 be r 2 01 2) to on oa me er	12 5 00 0	30 0 00 0
Ro lf E. Ah lqv ist - N ina tio Co itte om n m m e	20 00 0	15 00 0
Bjø Gr lan d - N ina tio Co itte et rge om n m m e	10 00 0	10 00 0
utÅ m Kn - N ina tio Co itte om n m m e	10 00 0	10 00 0
To l r io ta at em un er n	I 11 00 0 5	I 18 00 0 5

(All figures in NOK)

Employee options

In Q3 ²⁰⁰⁹ the previous option program was established repLacing options granted in ²⁰⁰⁶ and 2007. All BXPL employees at that time were allocated options. The Manager Quality, Risk and SuppLy Chain was aLlocated 25,000 shares upon commencement of his employment on I June 2010. One third of the options vests after one year, another third of the options vests after two years and an additionaL third after three years. The exercise of options can be postponed but not past the contractuaL life of 3.2 years. This period has been extended three to ten days after the pubLication of the Annual Report 2013. Fair vaLue of the options is calculated at the time of grant and will be recognised over the corresponding vesting penod of the options. CEO 1 was granted 370,579 shares on 10 September 2011 which must be exercised three to ten days after the publication of the Q3 2014 report. Total of 370,597 share options forfeited when CEO I resigned on 15 September 2013. A total number of 470,000 share options held by Management were granted duririg 2013. A total riumber of 412,246 share options held by Management forfeited as of 31 December 2013. Share options were neither exercised nor expired during 2013. Å total of 520,667 share options held by BXPL empLoyees were outstanding as of 31 December 2013.

	20 13		20 12
Su of di tio tst mm ar y ou an ng op ns :	Sh tio ar e op ns	W eig hte d av er ag e cis ice ex er e pr	Sh tio ar e op ns	W eig hte d av er ag e cis ice ex er e pr
Ou din tio tst 01 .01 an g op ns	46 2 91 3	17 ,47	64 6 24 8	1 5 ,35
Gr ted tio an op ns	47 0 00 0	6,7 1	0,0 0	0,0 0
Ex cis ed tio er op ns	0,0 0	0,0 0	0,0 0	0,0 0
rfe Fo ite d	-4 12 24 6	18 ,09	-11 1 66 8	10 ,00
Ex pir ed tio op ns	0,0 0	0,0 0	-71 66 7	10 ,00
Ou din tio 31 .12 tst an g op ns	52 0 66 7	7,2 7	46 2 91 3	17 ,46
Ve do ion ste pt s	15 06 67	9, 17	92 33 3	11 ,35
W eig hte d Av Fa ir V aL of tio d du rin th rio d te er ag e ue op ns gr an g e pe	0,0 0	0,0 0	0,0 0	0,0 0
Ch ed ain st th Inc sta te t: e e arg ag om m en	-1 61 5 73 6		I 36 2 73 2
Ch St ed th lnc at t - Em plo ain st e e arg om em en ye rs ag tio l i rib ion nt ut na na ns ur an ce co :	26 09 9		i 5 8 34 4

Fair value of the options is estimated based on the Black and Schotes option pricing model.

The Board of Directors holds an authorisation to issue shares in the Company resotved by the Annual General Meeting on 17 April 2013. This authonsation is valid untit the next General Meeting to be hetd in 2014 with an ultimate expiry date on 30 June 2014. The authonsation is provided for increasing the Companys share capital with up to NOK 115,858 by way of issuance of up to 926,864 shares in connection with the Companys share incentive scheme.

Implemented remuneration policy for menibers of Management for 2013

The main principle of the Group's remuneration policy for the Group's Management is to offer competitive terms in an overall perspective taking into account salary, payments in kind, bonuses, pension plans and other benefits, to retain key staff.

Management salanes and benefits for 2013 will be based on the principtes noted below.

The fixed satary for each member of the Management shatt be competitive and based on the individual's experience, responsibilities as welt as the results achieved during the previous year. Salaries as well as other benefits shall be reviewed annually, and adjusted as appropriate.

In addition to their base salary, the Group's Management may be granted additional remuneration in the form of ^a bonus. If ^a bonus scheme is implemented in 2013, the assessment critena will be based on both the Group's performance and the individual's performance. The targets to be reached by the CEO are to be determined by the Company's Board of Directors. The CEO will set relevant targets for the other members of the Management team, based on pnnciples defined by BXPL's Board of Directors.

The Group's Management witl receive payment in kind such as cell phone expenses and payment of IT and telecommunication expenses.

On ¹⁵ September 2009, the previous share option program for all BXPL employees at the time was implemented. The current Management has been atlocated 442,246 share options. Each option entittes the option holder to purchase one share at ^a strike price of NOK10 (applicable to 46,667 shares options granted to CFO Gunnar Dolven, CTO Øystein Larsen and Sr. VP Dev. & Strategy Kjell Markman), NOK 15 (applicable to 25,000 share options granted the Manager Quality, Risk and Supply Chain). On 6 September 2011 the new CEO was granted 370,579 share options at ^a strike pnce of NOK 19, which may be exercised after the publication of the Q3 2014 financiat report. Upon exercise of the options, the option holder shatt pay to the Company ^a price of NOK 10 (NOK 15 and NOK 19 respectivety) per option share. If, on the exercise day, the market price of the BXPL shares exceeds NOK 50, the exercise price shalt be increased by an amount equivalent to 8% of the market pnce Less NOK 50.

All members of the Group's Management are included in the defined contnbution pension scheme established by BXPL for aLL its employees. The scheme is deposit based and contnbutions range from 4% to 7% of the emptoyee's salary - maximized to ^a percentage of 12G. The retirement age for aLL employees, including Management, is 67 years.

Remuneration policy for members of Management - Guidelines for 2014:

Management salaries and benefits for 2014 wiLl be based on the principles noted below.

The fixed salary for each member of the Management shalL be competitive and based on the individual's expenence, responsibilities as well as the resuLts achieved during the previous year. Salaries as weLl as other benefits shalL be reviewed annuaLly, and adjusted as appropriate.

Note 6 Salaries, other benefits, number of empLoy~s (continues) (ALL figures in NOK)

In addition to their base salary, the Group's Management may be granted additionat remuneration in the form of ^a bonus. If ^a bonus scheme is impLemented in 2014, the assessment cnteria wilL be based on both the Group's performance and the individuaL's performance. The targets to be reached by the CEO are to be determined by the Company's Board of Directors. The CEO wiLL set reLevant targets for the other members of the Management team, based on pnnciptes defined by BXPL's Board of Directors.

The Group's Management wftl receive payment in kind such as ceLL phone expenses and payment of IT and telecommunication expenses.

In February 2014, ^a new share option program for aLL BXPL empLoyees was implemented. The current Management has been alLocated 48,000 share options. Each option entitLes the option hoLder to purchase one share at ^a stnke price of NOK 7.51. If, on the exercise day, the market price of the BXPL shares exceeds NOK 50, the exercise price shaLl be increased by an amount equivalent to 8% of the market pnce Less NOK 50. The options granted wiLL be vested in tranches and can be exercised at the earLiest ¹² months subsequent to the date of grant and thereafter at up to 2 occasions during each calendar year, between three and 10 days after pubLications of the Company's Q1 and Q3 quarterLy resuLts. CEO Steinar Bakke has been granted 370,000 share options at ^a stnke price of NOK 6.50. 185,000 shares options wilL vest on the date of the pubLication of BXPL's Q4 2015 quarterLy report. A further 185,000 shares options wiLl vest on the date of the publication of BXPL's Q2 2017 quarterLy report. The exercise of fuLLy vested shares options is at the soLe discretion of the option holder.

ALL members of the Group's Management are included in the Groups occupationaL pensjon scheme drawn up by BXPL for aLL its empLoyees. The pension scheme is ^a defined contribution scheme and contributions range from 4% to 7% of the empLoyee's saLary maximized to ^a percentage of 12G. The retirement age for all employees, incLuding Management, is 67 years.

Fees to auditor

(ALL figures in NOK)

	20 13	20 12
fe Au dit * es	33 0 00 0	29 2 50 0
As rvi s su ran ce se ce	40 90 0	27 14 0
Ot he ist *** r a ss an ce	83 1 85 0	31 67 7
m To l a ud it f fro in uin ion ta nt at ee s co g op er s	1 20 2 75 0	35 1 31 7
m it f fro To ta l a ud dis nt inu ed at ion ee s co op er s	0	22 48 8
To ta l	i 20 2 75 0	37 3 80 5

ALL fees stated are excluding VAT.

Audit fees consist of fees for the audit of the Company's annual financiaL statements and its internaL controls. These fees also incLude review of interim report.

Assurance services consist of fees biLLed for assurance and reLated services and incLude consuLtations concerning financiaL accounting and reporting standards, review of the Company's quarterly financiaL statements.

Other assistance consists of fees billed for other services related to the divestiture of shares in Severn Subsea Technologies Ltd. and preparation of tax returns.

ALL audit services in 2012 and 2013 are recognised as expenses. Audit-reLated fees incurred in 2012 and 2013 are in accordance with the Company's poLicy.

Note 7 Tangibte~f~çd assets

(AlL figures in NOK)

		Pr ty op er , pla a nt
20 13	Bu ild ing *	uip t eq m en	To l 2 01 3 ta
Co st ice 01 .01 pr	92 21 45 3	13 78 60 65	23 00 75 18
Ad dit ion s	0	32 67 7	32 67 7
Dis Ls po sa	-9 22 1 45 3	-8 05 4 41 3	-1 7 27 5 86 6
Co ice 31 .12 st pr	0	57 64 33 0	57 64 33 0
Ac La ted de iat ion 31 .12 cu mu pr ec s	0	19 1 26 0 -5	19 1 26 0 -5
of Ac La ted de iat ion dis d t cu mu pr ec po se as se	17 6 35 7	2 80 4 18 9	2 98 0 54 6
Cu La tio dif fe tra rre nc y ns n re nc e	0	0	0
Bo ok ed lue 31 .12 va	0	57 3 06 9	57 3 06 9
m fro De iat ion nt inu ing at ion pr ec co op er s	0	-45 0 75 3	-45 0 75 3
m De iat ion fro dis inu ed ion nt at pr ec co op er s	-45 15 7	-62 1 84 3	-66 00 0 7

De iat ion te %: pr ec ra	4%	3% 10 % -3
Ec ic life (ye s) on om ar :	25	3- 10
De iat ion th od pr ec me :	igh t l ine st ra	ht lin st tg ra e

		Pr ty op er , pla nt Et
20 12	Bu iId ing *	uip t eq m en	To l 2 01 2 ta
Co ice 0l st .0 1. pr	95 15 74 9	14 04 51 62	23 56 09 11
Ad dit ion s	0	75 49 3	75 49 3
Dis ls po sa	0	-38 9 35 6	-3 89 35 6
Cu lat ion dif fe tra rre nc y ns re nc e	-29 4 29 6	54 76 7	-2 39 52 9
Co ice 31 .12 st pr	9 22 1 45 3	13 78 6 06 5	23 00 7 51 8
Ac lat ed de iat ion 31 .12 cu mu pr ec s	-17 6 35 7	-7 54 4 69 7	-7 72 1 05 3
Ac lat ed de iat ion of dis d ts cu mu pr ec po se as se	0	21 7 01 5	21 70 15
Cu dif fe tra lat ion e rre nc y ns re nc	2 36 1	-23 2 40 6	-2 30 04 5
Bo ok ed lu e3 l.1 2. va	90 47 45 8	62 25 97 7	15 27 34 35
m De iat ion fro ing ion ntt at pr ec co nu op er s	0	-65 0 67 6	-65 0 67 6
m De iat ion fro dis inu ed ion nt at pr ec co op er s	-1 14 13 7	-1 56 52 12	-1 67 9 34 9
De iat ion %: te pr ec ra	4%	3% 10 % -3
life (ye s) Ec ic on om ar :	25	3- 10
De iat ion th od pr ec me :	igh t l ine st ra	igh t l ine st ra

The depreciation period and method are assessed each year to ensure that the method and period used harmonize with the financial realities of the non-current asset. The same applies to the scrap value.

Severn Subsea Technologies Ltd. purchased an industrial lease unit in 2011. The building was financed by ^a mortgage loan. Due to the divestiture of shares in Severn Subsea Technologies Ltd., the following assets relating to disposal group were classified as held for sale.

Purchase of lease - Severn Subsea Technologies Ltd. (former Calidus Engineenng Ltd.)

In June 2011, Severn Subsea Technologies Ltd. purchased ^a lease of units 6&7 Treleigh Industrial Estate of ^a total of NOK 12.2 million (GBP 1.413 million) of which NOK 8.1 million (GBP 940,000) relates to the building (shell only) and NOK 4.1 million (GBP 472,500) relates to the plant and machinery. The lease is classified as financial. The building will be depreciated over 25 years, and the plant and machinery wiLl be depreciated over ¹⁰ years. The contractual term is ⁹⁹⁹ years and the rent is set to one peppercorn per year.

Leasehold land arid buildings have been pledged to secure borrowings in Severn Subsea Technologies Ltd.

The Group has entered into operating leases for offices and other equipment. The costs are as follows:

Op at ing lea sin sts g er co	20 13	20 12
Re bu ild ing nt sts co on s	i 97 2 04 0	2 13 3 11 8
Ot he r	10 5 96 3	li 92 0
To l o tin lea sin ta sts pe ra g g co	2 07 8 00 3	2 14 5 03 8

The future minimum rents related to non-cancellable leases fall due as follows for the Group:

	W ith in I y ea r	2- 5 ye ar s
Op at ion al lea sin sts g er co	11 40 0	0
Re bu ild ing nt sts on co s	2 08 9 04 4	4 69 3 18 6
To l ta	21 00 44 4	46 93 18 6

The lease agreement for the main office (headquarters) has been entered into for ^a penod of 5 years. This agreement expires on 31 March 2016 and includes an option to extend the agreement for 3+3 years at market conditions.

Badger Exptorer Group 2013 - Notes

No 8 Inv rie to ~e en s (AL L f igu in NO K) re s
	20 13	20 12
Ra w ria L te ma	0	19 9 71 2
W k in or pro gre ss	0	1 7 29 30 8
Fin ish ed od go s	0	2 60 5
To l i rie ta to nv en s	0	1 9 31 62 5

ALL inventones are vaLued at cost. No write-down for obsoteteness are needed.

No t~ 9 Int ah gi ble ts as se
(AL L f igu in NO K) re s

BXPL Group has recognised the foLlowing intangibLe assets in the Statement of FinanciaL Position (incLuding internat built up assets such as devetopment costs).

		De lop nt ve me
20 13	Pa * te nts	sts co	Go od wi ll	To l ta
Co st ice 01 .01 pr	40 0 00 0	12 1 63 7 39 1	5 59 5 28 5	12 7 63 2 67 5
Ad dit ion s	0	31 52 3 30 2	0	31 52 3 30 2
Dis ls po sa	0	0	-5 59 5 28 5	-5 59 5 28 5
Pu bli ts c gr an	0	-22 37 5 45 1	0	-2 2 37 5 45 1
Co 31 .12 st pn ce	40 00 00	13 07 85 24 2	0	13 11 85 24 2
Ac La ted cie iat ion 31 .12 cu mu pr ec s	13 33 2	0	0	13 33 2
Bo ok lue 31 .12 va	38 66 68	13 07 85 24 2	0	13 1 17 1 91 0

The addition in 2013 consists of external services of NOK 18.079 million, purchase of manufactured parts, components and materiaLs of NOK 6.337 milLion, internaL personneL costs of NOK 6.532 million and traveL expenses of NOK 0.360 miLLion for the ~adger ExpLorer deveLopment project.

		De lop nt ve me
20 12	Pa te nts *	sts co	Go od wi ll	To ta l
Co 01 .01 st pn ce	40 00 00	11 1 03 71 90	57 73 85 8	11 72 11 04 7
Ad dit ion s	0	17 14 9 05 8	0	17 14 9 05 8
Dis Ls *** po sa	0	-1 21 8 60 4	0	-1 21 8 60 4
Cu dif fe tra La tio n rre nc y ns re nc es	0	0	-17 8 57 3	-1 78 57 3
m Co rib ion fro nt ut rtn s pa er s	0	-2 48 7 60 0	0	-2 48 7 60 0
Pu bL ic ts gr an	0	-2 84 2 65 3	0	-2 84 2 65 3
Co st 31 .12 ce pn	40 0 00 0	12 1 63 7 39 1	5 59 5 28 5	12 7 63 2 67 5
Ac La ted de iat ion 31 .12 cu mu pr ec s	13 33 2	0	0	13 33 2
Bo ok lue 31 .12 va	38 6 66 8	12 1 63 73 91	59 28 5 5 5	12 76 19 34 3

The addition in 2012 consists of externaL services of NOK 7.173 miLLion and internaL personneL costs of NOK 9.946 miLLion for the Badger ExpLorer deveLopment project.

The disposaL appLies to the saLe of Badger PLasma TechnoLogy AS, which soLd for NOK 1.950 million in December 2012, and the beLongings of PLasma ChanneL Dnlling technology. It aLso includes sales of capitaLised development equipment in Badger Explorer ASA.

There has not been made any depreciation on intangibte asset in 2012 and 2013.

ALL deveLopment costs in 2012 and 2013 are related to the deveLopment of the Badger ExpLorer technoLogy in Badger ExpLorer ASA. The deveLopment work contains inherent technoLogy nsk and nsk reLated to the funding contnbutions from the partners. An amount of Management focus wiLL continue to be appLied to prudent financial management, improved cost-effectiveness and simplification of non-technical activities.

The patent applies to the Badger ExpLorer technology and has ^a vaLidity of ²⁰ years from date it was granted. The DeveLopment costs appLy to the deveLopment of the Badger ExpLorer technology in Badger ExpLorer ASA and the PLasma Channel Drilting technotogy in Badger Plasma TechnoLogy AS. Depreciation wILL commence when the technoLogy is ready for its intended use. GoodwiLL, arised from 75% acquisition of Severn Subsea TechnoLogies Ltd. in ApriL 2011, was classified as an intangibLe asset in the Statement of FinanciaL Position in 2012.

Badger ExpLorer Group 2013 - Notes

No 10 To l r ei 'a b Les te ta ec
NO (AL L f igu in K) re s	20 13	20 12
Ac iva ble ts co un re ce s	0	2 12 3 72 5
Sk ef & Re rch Co ciL of No eiv ab Le att un n as ea un rw ay rec s	3 82 8 11 7	1 7 95 31 6
Ot he eiv ab Le r r ec s	3 09 1 47 9	1 8 56 70 4
To l r eiv ab les ta ec	6 91 9 59 6	5 77 5 74 5

Provision for bad and doubtful debts in the Income Statement of Severn Subsea TechnoLogies amounted to GBP 57,148 in 2012. There is no further provision for Losses on receivables in the Group. Other receivables in BXPL are mainty related to prepaid expenses and pubtic grants from Skattefunn and Research Council of Norway. Other receivabLes in Severn Subsea TechnoLogies Ltd. relate to government grants awarded towards the deveLopment of the new building, maintaining staff numbers and creating new jobs.

For age distribution of accounts receivables see note 15.

No 11 Ca sh d sh uiv ale te nt an ca eg s (AL L f igu in NO K) re s
	20 13	20 12
Ca sh ba nk at	24 94 33 38	17 60 77 57
To l c h ba nk ta at as	24 94 3 33 8	17 60 7 75 7
Re ict ed ba nk de sit str po s	60 1 06 1	70 8 73 7

Note ¹² Share capita~share prer~um account, numb~s of shares, s~~eholders etc. (ALL figures in NOK)

Nu be fs ha m ro re s	20 13	20 12
01 .01	18 53 72 88	18 43 90 40
Ca pit aL inc e re as	0	98 24 8
31 .12	18 53 72 88	18 53 72 88

NominaL vaLue per share is NOK 0.125.

As of De be th lar sh eh old 31 r 2 01 3, 20 st e ce m ge ar er s we re :	No f s ha . o res	% sh e ar
CO CA AS NV EX A PIT AL IV	3 2 00 78 0	% 17 ,3
ST AT E ST RE ET BA NK AN D TR US T CO	2 69 9 99 7	% 14 ,6
W BA NK OF NE YO RK ME LL ON SA /N V	92 2 22 4	% 5,0
M CO INV ES PE RP EU R SM AL L CO	87 4 1 55	% 4,7
G HO LB ER NO RD EN	83 0 31 1	5% 4,
OD IN OF FS HO RE	67 3 09 3	% 3,6
SK AN DI NA VI SK A EN SK ILD A BA NK EN S.A	65 5 00 0	% 3,5
IR IS- FO RS KN ING SIN VE ST AS	49 7 58 4	% 2,7
W BA NK OF NE YO RK ME LL ON (LU X) S.A	35 8 78 7	% 1,9
RÅ ING DA LV IN DG IVN AS	30 1 87 2	% 1,6
AN ØY INV ES T DA	27 8 80 0	% 1,5
TT CI NV ES TA S	25 00 00	% 1,3
ÅM KN UT	24 26 00	% 1,3
KJ EL L ER IK DR EV DA L	22 2 60 0	% 1,2
CS VI IA S	21 40 00	% 1,2
MP PE NS JO N PK	21 3 20 0	% 1,2
G NI LS HO LM EN INV ES TE RIN AS	20 9 22 2	% 1,1
VE NT OR AS	19 00 04	% 1,0
OR ST CO TH EN TH ER NT RU	18 81 90	% 1,0
SI GM DS TO UN KK A	17 86 93	% 1,0
20 La sh ho Ld st rge are ers	13 20 1 50 8	% 71 ,2
76 5 he ha reh oL de ot r s rs	5 33 5 78 0	% 28 ,8
To l o f 7 85 sh eh old ta ar er s	18 53 7 28 8	0% 10

All shares have equal voting nghts.

The Board of Directors holds two authonsations to issue shares in the Company resolved by the Annual General Meeting on 17 April 2013. These authorisations are valid until the next Annual General Meeting to be held in 2014 with an ultimate expiry date on 30 June 2014. The first authorization is provided for increasing the Companys share capital with up to NOK 115,858 by way of issuance of up to 926,864 shares in connection with the issuance of shares to employees, directors and others connected with the Company as part of the Companys share incentive scheme and the share issue against payment in other cash payment (contribution). The second authonzation is provided for increasing the Companys share capital with up to NOK 231,716 by way of issuance of up to 1 ,853,728 shares in conjunction with the issuance of shares to existing shareholders and new investors for ^a cash deposit or cash contributions and mergers.

Tr ion ith lat ed rti ct an sa s w re pa es	20 13	20 12
(A ll f igu in NO K) re s

Pu rch ed rvi s* as se ce	I 87 0 94 1	0

In June 2013, BXPL entered into ^a consultancy agreement with two of its largest shareholders, Dalvin Rådgivning A5 and Nilsholmen AS. Payments totalling NOK 939,117 were made to Dalvin Rådgivning A5 in respect of performed consultancy services and NOK 7,709 related to travel expenses. Mr. Gunnar Dolven, who is CFO of BXPL, is ^a director of Dalvin Rådgivning AS. Nilsholmen A5, ^a company owned by Mr. Kjell Markman, received payments of NOK 785,003 in respect of performed consultancy services and NOK 79,179 related to travel expenses for the period July - December 2013. Mr. Markman is Sr. VP Business Development & Strategy of BXPL.

In September 2013, BXPL entered into ^a consultancy agreement with ^a foreign company Celect LLC where Mr. David Blacklaw is ^a director. Mr. Blacklaw is the previous President and CEO of BXPL. Payments totalling NOK 59,933 were made to Celekt LLC for performed consultancy services.

Tr isa ion ith mb of th Bo d of Di ct cto ar s w me er s e ar re rs	20 13	20 12
Pu rch ed rvi s as se ce	0	70 00 0

At the Extraordinary General Meeting on 1 December 2010, the General Meeting provided the Board of Directors with ^a proxy to enter into agreements with close associates for the penod from ^I December ²⁰¹⁰ until ³¹ December 2011. The remuneration shall be limited to NOK 1,500 per hour and time schedule and detailed specifications of duties shall be approved by the Company's Board of Directors prior to entering into such agreements. Badger Explorer ASA entered into an agreement with Board member Tone Kvåle in 2012. The agreement, entered with Tone Kvåle in 2012, is related to the internal audit, potential risk evaluation, compliance and review of due diligence of BXPL's associate Severn Subsea Technologies Ltd. No purchased services under this agreement in 2013.

For transactions with Severn Subsea Technologies Ltd. and Nigel Halliday please refer to note 18.

Sh he ld by be of th Bo d of Dh d mb of Ma cto nt ar es me m rs e ar -e rs an me er s na ge me	20 13	20 12
SE B Pr iva Ba nk S.A . L bo (C ha irm - M Ha n) te ux em urg an arc us ns so	56 5 00 0	56 5 00 0
FO Rå AS (C - G ) Da lvi dg ivn ing r D olv n un na en	30 1 87 2	30 1 87 2
Ni lsh olm Inv rin AS (S VP Bu De & St - K je ll M km ) te rat en es g r. s. v. eg y ar an	20 9 22 2	20 9 22 2
O Pr ide & CE - S ina r B ak ke nt te es	30 00 0	0
Ni lsh olm AS (S VP Bu De & St - K je ll Ma rkm ) rat en r. s. v. eg y an	20 20 0	20 20 0
Ch air - M Ha n n ma arc us ns so	11 66 8	11 66 8
O CF - G r D olv un na en	8 00 0	8 00 0
åle Bo ard mb - T Kv e me er on	5 0 00	5 00 0
O rd ina sh ry ar es	I 15 0 96 2	I 12 0 96 2
of lsh % to ta ar es	% 6,2	0% 6,

~I~I!I1IiIIIIIIIIIiIIiIIIIIIiIIIIIiiII1I

(All figures in NOK)

Contribution recognised as capitalised grants in the Statement of Financial Position

The Group has received contributions from the industry partners amounting to NOK 53.920 million whereas NOK ²⁴ million were received pnor to 2013. These contnbutions shall be repaid to the partners by paying 5% royalty of all technology related sales in the future. This royalty is limited to ^a total of 150% of received contnbutions. ^A waiver of repayment of NOK 2.488 million of industry partner contnbutions was received in 2011 and the amount was thus capitalised as reduction of development costs. In March 2012, an additional confirmation of the waiver of repayment of NOK 2.488 million was received.

Note 15 Financial risk managementobjectives and po(ides (ALL figures in NOK)

The Group is exposed to foreign currency risk, interest rate nsk, credit nsk and Liquidity nsk.

The Groups Management oversees the management of these risks and assure that the Groups financiat nsk-taking activities are governed by appropnate policies and procedures and that financiat nsks are identified, measured an managed in accordance with Group policies and Group risk appetite. It is the Groups policy that no trading in denvates for speculative purposes shaLL be undertaken. The Board of Directors reviews and agrees on poLicies for managing each of these risks which are summansed below.

Exchange rate risk

Throught the ownership of Calidus Engineenng Ltd. (UK) up to 28 June 2013, the Group was exposed to fLuctuations in the GBP/NOK exchange rate. Historically, the Group has had Limited exposure to other currencies. With the Companys supply chain becoming more global as ^a result of efforts to reduce costs, the exposure to other currencies - in particular EUR and USD - is increasing. Mitigation includes monitoring cost trends in gLobal markets and retaining the ability to change suppliers should they cease to be cost-effective.

The Groups cash reserves of NOK 24.943 million are deposited in the Norwegian bank Sparebanken Vest. ALL the Group's financiaL instruments are in NOK. When commercial operations in larger scale commence, ^a currency exchange poLicy wilL be introduced.

Interest rate risk

The Group has no interest-bearing debt. Bank deposits are exposed to market fLuctuations in interest rates, which affects the financial income and the return on cash. The Group has NOK 0.735 million in net financiaL income as of 31 December 2013.

Credit risk

The Group trades onLy with recognised, creditworthy third parties. It is the Group's policy that all customers that wish to trade on credit terms are subject to credit verification procedures. In addition, receivable baLances are monitored on an ongoing basis with the result that the Groups exposure to bad debts is not significant. The Group has experienced Loss on receivabLes of NOK 2.457 million (GBP 244,465) in 2013 and NOK 549,965 (GBP 57,148) in 2012. ALL cash reserves in the Group are deposited in the Norwegian bank Sparebanken Vest. AlL cash in Severn Subsea Technologies Ltd. is deposited in the Bank of England.

Note 15 Financia1~risk manage~ent object~es and poticies (continues) -

Liquidity risk

The Group monitors its liquidity risk to be able to meet its financiaL obligations as they faLl due. An assessment of such obligations is made and compared against the cash flow projection on ^a regular basis.

The cash position of the BXPL Group at year end 2013 was NOK 24.943 milLion, compared to NOK 17.608 million in 2012. Remaining funding from the Badger Explorer Demonstrator Program pLus, Skattefunn 2013, Research CounciL of Norway and Innovation Norway grants, is considered sufficient cash to carry the business into 2015. Contingencies for 2014 incLude overdraft facility with the BXPL's bank and accelerated reLease of public grants and partner funding. The above represents gross funding via the Demonstrator Program. In addition, BXPL has announced in the Q4 2013 report that discusstons have been initiated with present partners and one potential new partner to release ^a next phase program - the Badger Development Program. The next phase is pLanned to commence H2 2014, that means there wiLL be an overlap between the two programs in second half of 2014 both operationaLly and financialLy. Two new partners were introduced in the Demonstrator Program, WintershalL and Chevron. An arrangement is formalLy accepted whereby newcomers must pay full pick-up when entering our running programs, the same will appLy for additional partners joining in 2014. This means additional funds to support running operations.

Cash spend will be carefulLy managed during 2014 - 2015. The Badger DeveLopment Program, planned to commence in Late 2014, wtll contribute to operationaL funding in 2014. TechnicaL progress on the HPHT ultrasonic project wiLl reLease funding from awarded grants.

At this stage in the various Badger programs, the Group foresees technicaL/engineenng chalLenges, not unsolvable, but they might take time. Thus deLays represent the main uncertainty. The delays might come on technical progress or in the on-going negotiations for the next phase, such delays wiLl have financial implications. Present status does not give any reason to highlight these challenges, and the Group foresees severaL ways to prevent delays before they occur.

Capital management

CapitaL includes equity attributable to the equity hoLders of the Parent.

The primary focus of the Groups capital management is to ensure that it maintains ^a strong credit rating and ^a heaLthy capital ratio in order to support its business and maximize sharehoLders value.

The Group monitors capital using ^a gearing ratio, which is net debt divided by total capital plus net debt. Since the Group has ^a relative 10w portion of interest beanng Loans; the geanng ratio is negative for both 2012 and 2013.

The Group includes within net debt, trade and other payabLes, Less cash and cash equivaLents.

	20 13	20 12
Int t b loa d bo wi er es ea nn g ns an rro ng s	0	8 2 00 00 3
Tr ad d he ab ot tes e an r p ay	10 76 0 80 5	8 9 49 34 2
m Le sh d sh de sit t-t ss ca an or er po s	-24 94 3 33 8	-17 60 7 75 7
Ne td eb t	-1 41 82 53 3	-4 58 41 1
Eq uit y	10 1 62 77 32	12 70 58 55 9
To ta l c ita l ap	10 1 62 7 73 2	12 7 05 8 55 9
Ca pit al d t d eb t an ne	87 44 19 9 5	12 6 60 0 14 8
Ge tio ng an ra	% -16	% 0

Fair value

between willing parties, other than in ^a forced or liquidation sale.

Fair value of investment in associate is based on fair value techniques;
Fair value of cash and cash equivatent are assessed to carrying amount;
Fair value of interest-bearing loans and borrowings.

Set out below is ^a comparison by category of carrying amounts and fair values of all of the Groups financial instruments:

	20 13		20 12
	Ca ing nt rry am ou	Fa ir v al ue	ing nt ca rry am ou	Fa ir v al ue
Ca sh d sh uiv ale nts an ca eq	24 94 3 33 8	24 94 3 33 8	17 60 7 75 7	17 60 7 75 7
Cu ab nt etv tes rre rec	6 91 9 59 6	6 91 9 59 6	5 7 75 74 5	"~ 7~1 ~ ~
Tr ad d ot he ab les e an r p ay	10 76 0 80 5	10 76 0 80 5	17 14 9 34 6	17 14 9 34 6
Int t-b rin loa d bo wi g er es ea ns an rro ng s	0	0	8 2 00 00 3	8 2 00 00 3
Inv in cia tm ts tes es en as so	2 70 0 62 4	2 70 0 62 4	0	0

Fair vatue hierarchy

As of 31 December 2013, the BXPL Group does not hold any financial instruments measured at fair value in the Statement of Financial Position.

Fair vatue of investment in associate in Level 3 of the fair vaLue of hierarchy: techniques for which all inputs that have ^a significant effect on the recorded fair value that are not based on observable market data.

Age distribution of receivables

As at 31 December, the ageing analysis of receivabtes is as follows:

		Ne ith st er pa
		du e no r		Pa st	du bu im t n ot e pa	d tre
	To l ta	im d tre pa	da <3 0 ys	da 30 -60 ys	da 60 -90 ys	da 90 -12 0 ys	da >1 20 ys
20 13	0	0	0	0	0	0	0
20 12 *	36 86 03 0	36 52 02 0	34 01 0	0	0	0	0
20 12 **	20 89 71 5	85 80 21	11 37 22 0	78 83 2	0	15 64 2	0

Amounts presented indicate age distribution of receivables from continuing operations

Amounts presented indicate age distribution of receivabtes from discontinued operations

Severn Subsea Technologies Ltd. experienced loss on receivables of NOK 2.457 million (GBP 244,465) in 2013 and NOK 549,965 (GBP 57,148) in 2012.

Financial liability

Borrowings - Severn Subsea Technologies Ltd. (former Catidus Engineering Ltd.)

Å mortgage with HSBC of NOK 6.614 million (GBP 735,265 as of ³¹ December 2012) over ¹⁵ years with an interest rate of 5% over the banks steenng base rate. Original mortgage of GBP 800,000 was granted in June 2011.
^A loan of NOK1.565 million (GBP 173,996 as of ³¹ December 2012) from HSBC over ¹⁵ years with an interest rate of 5.25% over the banks steering base rate. Onginal Loan of GBP 200,000 was granted in June 2011.

The terms of the mortgage with HSBC of GBP 800,000 and the loan with HSBC of GBP 200,000 have been renegotiated.

An overdraft facility with HSBC of GBP 50,000 was agreed until 1 January 2013 and GBP 110,000 until 31 March 2013, then continuing at GBP 50,000 with an interest rate at 7.4% over banks steenng base rate. The overdraft facitity was due for review ³⁰ May2013.

N 6~ 9t he ~t r~ e~
(AD fig NO K) in ur es
rm Ot he ho lia bi liti rt te r s es	2 01 3	2 01 2
Ac ed cru ex pe ns es	-2 22 7	21 90 6
Em be fits (va tio ) pto e n ye ne ca ex pe ns es	1 2 46 93 1	1 4 87 01 3
De fe d bli ts* rre rev en ue pu c gr an	0	1 3 71 31 5
Ac ed int ts cru er es	0	78 58 9
m rm Ot he lia bi liti r t te er es	2 01 0 60 0	91 8 77 7
m To l o th sh lia bi liti ta t t er or er es	3 25 5 30 5	3 87 7 60 0

Deferred revenue public grants are attnbutable to the divested interest in Severn Subsea Technologies Ltd.

Note 17 Segrjnt reporting

(All figures in NOK)

The table betow shows the segments which are reported by the Management to the Board of Directors. The main segment is the main project - Badger Explorer*. The P&L figures for the Engineering** segment are no Longer presented as this segment has been discontinued, ref note 19.

The column 'Badger Explorer" includes all transactiori related to the devetopment of the Badger Explorer tool in the company Badger Explorer ASA.

Capital expenditure are net after public grants.

Bu sin - 2 01 3 ts es s se en	Ba dg er Ex plo r ( *) re	En gin rin ee g (** )	To l ta
gm Re e ve nu
Th ird rty pa	22 37 45 1 5	0	22 37 45 1 5
Ot he r i nc om e	70 26 8	0	70 26 8
Ca pit ali tio sa n	-22 37 5 45 1	0	-22 37 5 45 1
To l r ta ev en ue	70 26 8	0	70 26 8
Re lts su
De iat ion pr ec	45 0 75 3	0	45 07 53
Se t e gm en xp en se s	50 62 87 16	0	50 62 87 16
Ca pit ali tio of sa n ex pe ns es	-31 52 3 30 2	0	-31 52 3 30 2
m fro EB IT nt in uin at ion g co op er s	-1 9 48 89 9 5	0	-1 94 85 89 9
Ne t f ina ial ite nc ms	15 50 9	0	15 50 9
m EB T fro in ui ior is nt at co ng op er	-1 9 47 0 39 0	0	-1 94 70 39 0
rom lt f Ta din nt inu ing at ion on x or ar y re su co op er s	0	0	0
m Ne fit (lo ) f in ui ion t p nt at ro ss ro co ng op er s	-1 9 47 0 39 0	0	-1 94 70 39 0
Di tin d ion at sc on ue op er s:
m Pr of it (lo ) a fte fo he rio d fro dis inu ed ion r t r t nt at ss ax pe co op er s	0	-4 34 3 57 6	-4 34 3 57 6
Ne fit (lo ) t p ro ss	-1 94 70 39 0	-4 34 35 76	-2 38 13 96 5
Pr of it (lo ) a bu ble llin int ttn ta to nt t ss no n- co ro g er es	54 37 8	0	54 37 8
Se fit (lo ) t p gm en ro ss	-1 95 24 76 8	-4 34 35 76	-2 38 68 34 4
To ta l a ets ss	16 63 08 53 7	0	16 63 08 53 7
To ta l l ia bi liti es	64 68 0 80 5	0	64 68 0 80 5
Ca pit al nd itu ex pe re	91 47 85 1	0	91 47 85 1
Ge ph ica l s nts - 2 01 3 og ra eg me	No rw ay	UK	To l ta
To l r ta ev en ue	70 26 8	0	70 26 8
To ta l a ets ss	16 6 30 8 53 7	0	16 6 30 8 53 7

To l l ia bi liti ta es	64 68 0 80 5	0	64 68 0 80 5
Ca pit al nd itu ex pe re	9 14 7 85 1	0	9 14 7 85 1
m Se fit (lo ) f dis in d ion t p nt at gm en ro ss ro co ue op er s	0	-4 34 3 6 57	-4 34 3 6 57

Badger Explorer Group 2013 - Notes

Note 17 Segment reporting (continues)

(All figures in NOK)

	Ba dg er	En gin rin ee g
Bu sin - 2 01 2 ts es s se gm en	Ex plo (*) re r	(** )	To ta l
Re ve nu e
Th ird rty pa	2 84 2 65 3	0	2 84 2 65 3
Ot he r i e nc om	36 4 51 5	0	36 4 51 5
Ca pit isa tio at n	-2 84 2 65 3	0	-2 84 2 65 3
To l r ta ev en ue	36 45 15	0	36 45 15

Re lts su
De iat ion pr ec	65 0 67 6	0	65 0 67 6
Se tex gm en pe ns es	35 40 02 2 5	0	35 40 50 22
Ca pit ali tio of sa n ex pe ns es	-17 14 9 05 8	0	-1 71 49 05 8
m EB IT fro in ui ion nt at co ng op er s	-1 8 54 2 12 4	0	-1 85 42 12 4
Ne t f ina ial ite nc ms	61 3 81 7	0	61 38 17
m EB T fro in ui ion nt at co ng op er s	-1 7 92 8 30 7	0	-1 79 28 30 7
m Ta din lt f inu ing ion nt at x on or ar y re su ro co op er s	0	0	0
m Ne fit (Lo ) f in ui ion t p nt at ro ss ro co ng op er s	-1 7 92 8 30 7	0	-1 79 28 30 7
Di tin d ion at sc on ue op er s:
m of ((o ) a fte fo fro Pr it r t r t he rio d dis nt inu ed at ion ss ax pe co op er s	0	-3 38 00 00	-3 38 00 00
Ne fit ((o ) t p ro ss	-1 92 8 30 7 7	-3 38 0 00 0	-2 1 30 8 30 7
of ((o ) a Pr it ttr ib ut ab le to nt llin int t g ss no n- co ro er es	-84 4 89 1	0	-84 4 89 1
Se fit ((o ) t p gm en ro ss	-1 70 83 41 6	-3 38 00 00	-2 04 63 41 6
To l a ta ets ss	16 8 20 7 90 5	0	16 8 20 7 90 5
To l l ia bi liti ta es	41 14 9 34 6	0	41 14 9 34 6
Ca pit al nd itu re ex pe	10 60 0 20 1	0	10 60 0 20 1

Ge ph ica l s - 2 01 2 nts og ra eg me	No rw ay	UK	To l ta
To l r ta ev en ue	36 45 15	0	36 45 15
To l a ta ets ss	16 8 20 7 90 5	0	16 8 20 7 90 5
To l l ia bi liti ta es	41 14 9 34 6	0	41 14 9 34 6
Ca pit al nd itu ex pe re	10 60 0 20 1	0	10 60 0 20 1
m Se (lo ) f fit dis inu ed ion t p nt at en ro ss ro co er s	0	-3 38 0 00 0	-3 38 0 00 0
gm op

Note 18 Subsidiaries and investments in assodat~es (All figures in NOK)

Badger Plasma Technoiogy AS

Badger Ptasma Technology AS is ^a private limited company registered in Norway and has its head office Located at Forusskogen 1, 4033 Stavanger, Norway. Badger Plasma Technology A5 was established on 5 March 2007 in order to increase focus and activity level of the devetopment and commercialisation of the PLasma Channel Drilling technoLogy. Badger Plasma TechnoLogy AS was sotd for NOK 1.950 miLlion with ^a (oss of NOK 1.050 milLion in December ²⁰¹² and is deconsolidated in the Group from ³¹ December 2012.

Severn Subsea Technologies Ltd. (former Calidus Engineering Ltd.)

Severn Subsea Technologies Ltd. is ^a private limited company registered in UK. The company is Located at 6 Jon Davey Drive, Treleigh Industriat Estate, Redruth, Cornwatl TR16 4AX, UK. The first 50% of the shares were acquired for NOK 8.910 million in November ²⁰⁰⁷ through ^a combined purchase of outstanding shares and ^a share issue. Additional 25% of the shares were acquired for NOK 8.279 million in April ²⁰¹¹ through purchase of outstanding shares. In May 2013, the Group acquired the remaining 25% of the shares of Severn Subsea Technologies Ltd. for NOK 1.841 miLLion, increasing its ownership to 100%. The acquisftion of this non controtLing interest has been accounted for as the equity transaction in accordance with revised lAS 27.

In June 2013, BXPL divested its 70% interest of Severn Subsea Technologies Ltd. to Severn Glocon for ^a net amount of NOK 7.189 million with ^a (oss of NOK 1.120 million in the Group. Upon settling the completion accounts, BXPL wilL realise ^a further Loss of NOK 838,350 accounted for in December 2013. Divesting Severn Subsea Technologies Ltd. enabled BXPL to focus better on the Badger technotogy development, strengthened the Company's cash position, whilst via the share purchase agreement stiLl having access to skilLs and competance.

As of 28 June 2013, Severn Subsea TechnoLogies Ltd. was classified as ^a disposal group held for sale and as discontinued operations. The financial information of the associate is excluded from the respective captions in the consoLidated financtal statements and related notes for the years presented. It is disclosed in the separate financial statements ref. note 19. As of 31 December 2013, the BXPL Group consists of Badger Explorer ÅSA.

From ²⁸ June 2013, BXPL owns 30% of the shares in Severn Subsea Technologies Ltd. The investment in Severn Subsea TechnoLogies Ltd. is iniciaLly recognised at fair value at the effective date of the sale from 100% to 30% of the shares. Subsequent measurement of the rematning 30% of shares is accounted for using the equity methocl.

Under the Share Purchase Agreement, Severn Glocon wiLL acquire another 15% of the shares of Severn Subsea TechnoLogies Ltd. in ²⁰¹⁵ and the remaining 15% in ²⁰¹⁶ on an earn-out model basis. The share purchase price for the two future transactions is Linked to Severn Subsea Technologies financiaL performance during 2014 and 2015 respectively. Under the terms of the Agreement, BXPL will continue to place orders with Severn Subsea Technologies Ltd. worth minimum of GBP 1.750 million over the next 2.5 years The BXPL Group has ^a significant influence but not ^a controt, accompanying ^a shareholding of 30% of the voting rights.

Under the equity method, the Statement of Financial Position includes the initial fair value of the investment, plus the share of the profit or (oss generated by Severn Subsea Technologies Ltd. in the period the profit or (oss occurs. Due to the changes in fair value, the carrying amount of the investment is subsequentLy increased or decreased. BXPLs share of profit or loss of the associate is recognised in the lncome Statement as ^a single line ('Share of profit ^I (Loss) from associates) and in the Consolidated Statement of Cash Flow as ^a singLe Line ('Share of (profit) / Loss of associates).

Carrying amount movements in the Statement of Financial Position of the BXPL Group during 2013:

% Ca of of ing nt 30 int t r et ain ed 28 Ju 20 13 ne rry am ou er es as	3 08 1 06 6
Sh of fo t r ult in th cia te r t he rio d 29 Ju - 3 1 De mb 20 13 are e ne ne es as so pe ce er	-38 0 44 3
Cl ing ba lan fo he rio d de d 31 De mb 20 13 r t os ce pe en ce er	2 70 0 62 4

Tr cti ith Se Su bs Te ch log ies Ltd (fo Ca lid En gin rin Lt d. ) an sa on s w ve rn ea no rm er us ee g		20 12
Ac bL e* ts co un pa ya	1 88 5 57 3	51 4 57 4
Pu rch ed rvi s* as se ce	13 17 2 94 1	5 5 71 95 7
Lo cia te to an as so	2 4 28 80 5	I 63 0 35 0
Sh eh old iss d in 20 12 (n nis ed in th St f t he Fin cia L Po sit ion )* te ot at t o ar er gu ar an e ue rec og e em en an	0	1 34 9 37 0

The Company purchased engineering- and production services from Severn Subsea Technotogies Ltd. Nigel Halladay (previous MD of Calidus Engineering Ltd.) owns 75,500 shares in Badger Explorer ÅSA. All purchased services from Severn Subsea Technologies Ltd. in ²⁰¹² and ²⁰¹³ are reLated to the deveLopment project in Badger Explorer ÅSA.

In December 2012, BXPL provided ^a shareholders' Ioan to Severn Subsea Technologies Ltd. of GBP 180,000 at an interest rate of 3.2% p.a. with ^a down payment period of 1.5 years. Niget Hatladay (previous MD of Calidus Engineering Ltd.) has provided ^a Loan of GBP 60,000 at interest rate of 0.875% p.a. with ^a down payment period of 1.5 years accordingly. These credit agreements for the amounts of GBP 180,000 and GBP 60,000 tent by BXPL and Nigel Hatladay respectively were revoked and reptaced by the new credit agreement of GBP 240,000 signed in July 2013. This credit agreement is to be repaid to BXPL by 6 monthly instatments of GBP 40,000 commencing as of 31 July 2013 and continuing to the end of the year 2013 with no interest. Sharehotders Loan was entirely repaid to Niget Hatladay by BXPL on 22 May 2013.

Due to the divestiture of shares in Severn Subsea Technologies Ltd., BXPL was reteased from its sharehotder guarantee on ²¹ November 2013.

Note 19 D[scontinued operations (Att figures in NOK)

On 28 June 2013, BXPL entered into the Share Purchase Agreement (Agreement) with ^a UK based business focused on the design and manufacture of controt vatves and related products, Severn Gtocon Group PLC (Severn Gtocon), whereby BXPL sotd 84 shares pursuant to the Agreement representing 70% of the issued share capitat of its subsidiary Severn Subsea Technologies Ltd. for the equivatent of NOK 7.189 million. The ³⁶ option shares retained by BXPL represent 30% of the issued share capital of Severn Subsea Technologies Ltd.

The partiat divestment have been treated as discontinued operations in accordance with IFRS 5, and comparable figures have been changed respectively. Separate financial statements are presented in addition to the consotidated financial statement of the BXPL Group.

The P&L figures of Severn Subsea Technotogies Ltd. for the six months ended 28 June 2013 are as follows:

	20 13	20 12
	fo r t he six nth de d mo s en 28 Ju 20 13 ne	fo he r t ye ar de d 20 12 en
Re ve nu e	8 86 3 69 6	13 18 9 54 6
Op ing at er ex pe ns es	10 39 6 14 9	14 54 0 84 7
O ([o ) tin of it g pe ra pr ss	-1 53 2 45 3	-1 35 1 30 1
De iat ion pr ec	66 00 0 7	1 6 79 34 9
EB IT	-2 19 9 45 3	-3 03 0 65 0
t f (lo ) Ne ina iat inc e nc om ss	-18 5 91 8	-65 9 66 3
% Ne t [ of 70 of f t he bs idi * nt t o os s co ro su ary	-1 95 8 20 4	0
EB T	-4 34 35 76	-3 69 03 13
m Ta din lt f dis nti ed ion at x on or ar y re su ro co nu op er s	0	31 0 31 3
m of (lo ) a fte fo fro Pr it r t r t he dis nt inu ed at ion ss ax ye ar co op er s	-4 34 3 57 6	-3 38 0 00 0

^~ The detailed calculation of ^a net [oss of 70% of controt of Severn Subsea Technologies Ltd. is presented below.

The BXPL Group accounts for the disposat of 70% interest as foltows:

% Pa rti al dis l o f 7 int t i Se Su bs Te ch log ies Ltd 0 po sa er es n ve rn ea no
Av ait ab le- fo inv at tm t e r-s es en	3 08 1 06 6
0% Ca sh ds dis f 7 int t i th bs idi of 28 Ju 20 13 t o pr oc ee on po sa er es n e su ar y as ne	18 9 15 7 5
Su bs ch of tim ed sh ed of 31 De mb 20 13 nt at ge eq ue an es ca pro ce s as ce er	-83 8 35 0
Ne of th bs idi t a ets ss e su ar y	9 75 6 47 1
OC I e ffe * cts	1 63 3 60 5
t [ of f t Ne nt l o he bs idi os s co ro su ar y	-1 95 8 20 4

Badger Explorer Group 2013 - Notes

Loss recognised on the loss of controt of the Severn Subsea Technologies Ltd. is caLculated as fottows:

Lo int t d isp ed of Se Su bs Te ch log ies Lt d. ss on er es os ve rn ea no
0% Ca sh ed dis f 7 int f 2 8 Ju 20 13 t o t a pro ce s on po sa er es s o ne	7 18 9 15 5
Su bs ch of tim ed sh ed of De mb nt at 31 20 13 eq ue an ge es ca pro ce s as ce er	-83 8 35 0
% Ca ing of 70 int t i th bs idi nt rry am ou er es n e su ar y	-6 82 9 53 0
% of OC ffe 70 I e cts *	-1 14 3 52 3
0% Re lt of th dis l o f 7 int t su e po sa er es	-1 62 2 24 8
Lo int ai d of Se Su bs Te ch log ies Lt d. t r et ss on er es ne ve rn ea no
% Ca ing of 30 ail ab le- fo ale inv nt tm t rry am ou av r-s es en	3 08 1 06 6
% Ca ing of 30 int nt t rry am ou er es	-2 92 6 94 1
% of OC I e ffe * 30 cts	-49 0 08 1
Re lt int ai d t r et su on er es ne	-3 35 95 6
he eh siv inc ot r c om pr en e om e

The fotlowing table iltustrates the summarised financial assets and financiat Liabilities of Severn Subsea Technotogies Ltd. classified as hetd for sale as of 28 June 2013:

2013 2012

	of 28 Ju as ne	of 3l as
To ta l A ets ss	20 13	De mb 20 12 ce er
Pr pla & uip ty nt t op er eq m en ,	13 78 1 04 0	14 28 2 29 1
Inv to en ry	64 80 14	1 9 29 02 0
De bto rs	3 19 3 52 8	2 60 4 28 9
m Ca sh d sh de sit t-t an or er po s	41 33 0 7	1 0 29 93 2
	18 03 99 12	19 84 55 32
To ta l L ia bi liti es
Cr ed ito rs	3 7 20 59 9	3 7 33 17 6
Int t-b rin lia bi liti er es ea g es	8 07 5 83 5	8 2 00 00 3
m Lo fro Pa nt an re co mp an y	2 2 07 52 0	i 6 19 24 4
To l E ity ta qu	4 03 5 95 8	6 2 93 10 9
	18 03 99 12	19 84 55 32

Note 20 Impa~ment testing ofGoodwi~ (ALL figures in NOK)

GoodwiLL acquired through business combinations have been aLlocated to one cash-generating unit for impairment testing in 2012, which was equat to the acquired entity Severn Subsea TechnoLogies Ltd.

	20 13	20 12
Ca ing of od wi LL aL Lo ted th sh ing it nt to at rry am ou go ca e ca -g en er un	0	5 5 95 28 5

Severn Subsea Technologies Ltd. (former Calidus Engineering Ltd.) - assessment for 2012

The recoverable amount of Severn Subsea TechnoLogies Ltd. has been determined based on ^a vaLue-in-use calculation using cash ftow projectlons based on reasonable and supportable assumptions from financiat budgets approved by the Management of Severm Subsea TechnoLogies Ltd. covering ^a five-year period. None of the projected cash fLows induded cash infLows or outflows expected to anse from future restructurings or from improving or enhancing the asset's performance. The carrying amount in GBP has been revaluated to the NOK exchange rate at 31 December 2012.

Kev assumptions used in vatue-in-use catculations

The calculation of vaLue-in-use for Severn Subsea Technologies Ltd. was the most sensitive to the foLLowing assumptions:

Operating margin
Growth rate used to extrapolate cash flows beyond the budget period.
Discount rates after tax

Operating margin vaned from 14% to 14.5% for the ⁵ year period, which was higher than the actuaL operating margin of Severn Subsea Technotogies Ltd. in 2012 of -12.4%.

Growth rate estimates - The growth rate in the extrapolation period was set to 2.5%. The growth rate was based on average expected growth in the Engineering business and did not exceed the growth rates for the products, industry or country, in which Severn Subsea Technotogies Ltd. operated.

Discount rate - The discount rate, appLied to cash f10w projections, was 10.5%. Discount rates refLected the current market assessment of the risks specific to each cash generating unit. The discount rate was estimated based on the average percentage of ^a weighted average cost of capitat for the industry. This rate was further adjusted to reflect the market assessment of any risk specific to Severn Subsea TechnoLogies Ltd. for which future estimates of cash-flows have not been adjusted.

With regard to the assessment of value-in-use of Severn Subsea TechnoLogies Ltd., the Management beLieved that no reasonably possible change in any of the above key assumptions wouLd have caused the carrying vaLue of the unit to materiaLLy exceed its recoverable amount.

Note 2,1 Subseque~t events

(All figures in NOK)

On 29 January 2014, the Steenng Committee formaLly approved the delivery of Milestone 4 of the Badger Explorer Demonstrator Program. The delivery inctuded testing of the drilLing and compaction moduLe, the transport system and the Hydraulic Power Unit. The moduLe tests were executed in two stages; 1) testing the moduLes basic functionaLity and 2) abiLity of each moduLe's to meet the specifications.

Key Figures Badger Explorer Group

	20 13	20 12
m Se St NO (e ed ite fro In (1 00 0 K ) ct at t e m s co m em en
To l ta re ve nu es	70	36 5
Pu bl ic ts gr an	22 37 5	2 84 3
C ita lis ed de lo t st ap ve pm en co s	-3 1 52 3	-1 14 9 7
To L in ta at op er g ex pe ns es	19 6 55	18 90 7
EB IT	-1 9 48 6	-1 8 54 2
m Ne of it ( (o ) fo th fro in ui io t nt at e ng pr ss r ye ar co op er ns	-1 9 47 0	-1 92 8 7
m Ne of it (Lo ) fo th fro di tin d io t at pr ss r e ye ar sc on ue op er ns	-4 34 4	-3 38 0
P fit ( (o ) tri bu bL Ll in in at ta to nt te st e g ro ss no n- co ro re	54	-8 45
fit ( (o ) of P ib ab le ui ho Ld th at tr ut to t nt ro ss eq er s e pa re y	-2 3 86 8	-2 0 46 3
m Ea in sh fro in ui io (N O K ) nt at rn gs pe r ar e co ng op er ns	-1 ,2 9	-1 ,1 0
m Ea in sh fro di tin d io (N O K ) at e rn gs pe r ar sc on ue op er ns	-0 ,2 3	-0 ,1 8
m Se le ed ite fro St f Fi ia l Po si tio (1 00 0 NO K ) ct at t o m s em en na nc n
C ita tis ed de [o t c ts ap ve pm en os	13 0 78 5	12 1 63 7
To L ta nt ts no n- cu rre as se	13 4 44 6	14 2 89 3
To L ta nt ts cu rre as se	31 86 3	25 31 5
To L ta ts as se	16 6 30 9	16 8 20 8
To L ui ta t eq y	10 1 62 8	12 70 59
E it io at qu yr	% 61 ,1	% 75 ,5
To L lia bi tit ie ta s	64 68 1	41 14 9
m Se le ed ite fro C lid ed St of Ca sh FI ow (1 00 0 NO K ) ct at at t m s on so em en
m Ne h f (o w fro in tiv iti t c at as op er g ac es	-1 7 03 1	-2 0 48 4
m Ne h fL ow fro in tiv iti t c st t as ve m en ac es	-2 6 08 1	-1 3 54 0
m fL fro fin Ne h ow ci tiv iti t c as an ng ac es	50 64 7	11 41 2
To l ha in sh fL ow tin ui io ta t c at ne ng es ca - c on ng op er ns	7 53 4	-2 2 61 2
To l ha in sh flo w - d is in d io ta t c nt at ne ng es ca co ue op er ns	-1 99	1 04 1
Ca sh d sh uiv aL d of rio d ts at an ca eq en en pe	24 94 3	17 60 8
m Av be of pl fro in ui io nt at e ng er ag nu m r em oy ee s co op er ns	13	14

Income Statement - Badger Explorer ÅSA

ALL figures in NOK

	No te	20 13	20 12
RE VE NU ES
O th in e er co m		70 26 8	36 4 51 5
Pu bL ic ts gr an	2	22 37 5 45 1	2 84 2 65 3
C ita tis ed bL ic ts ap pu gr an	2, 9	-2 2 37 5 45 1	-2 84 2 65 3
To l ta re ve nu es		70 26 8	36 45 15
RÅ NG O NS ES PE TI EX PE
Ex ice fo de Lo oj te at t t rn se rv s r ve pm en pr ec	9	24 99 08 61	8 99 2 61 3
Pa oL nd d t a ta te st yr re co s	6	14 90 8 38 4	19 57 8 36 2
De ia tio n pr ec	7, 9	45 0 75 3	65 0 67 6
O th in at er op er g ex pe ns es		10 8 23 6 77	97 32 5 5 5
Ca pit aL ise d de to t st ve pm en co s	2, 9	-3 1 52 3 30 2	-1 7 14 9 05 8
To l o tin ta pe ra g ex pe ns es		19 60 4 93 3	18 04 79 17
O tin of it (lo ) g pe ra pr ss		-1 9 53 4 66 4	-1 7 68 3 40 2
Fi ia L in na nc co m e	3	73 28 5 7	82 0 08 1
Fi ia L na nc ex pe ns es	3, 17	9 66 2 17 9	i 10 1 30 0
Ne t f in ci al ite an m s		-8 92 6 89 3	-2 81 21 9
P fit (lo ) be fo ta ro ss re xe s		-2 8 46 1 55 7	-1 7 96 4 62 1
Ta di Lt x on or na ry re su	4	0	0
Ne of it (lo ) t pr ss	5	-2 8 46 1 55 7	-1 7 96 4 62 1

A llo tio ca n
Re in ed in ta ea rn gs		-2 8 46 1 55 7	-1 7 96 4 62 1
To l a llo tio ta ca n		-2 8 46 1 55 7	-1 7 96 4 62 1

Ea in ha rn gs pe rs re	5	-1 ,5 4	-0 ,9 7
Ea in sh di lu d te e rn gs pe r ar	5	-1 3 ,5	-0 ,9 6

Statement of Financial Position - Badger Explorer ÅSA

ALL figures in NOK

AS SE TS	No te	20 13	20 12
NO N- CU RR EN T AS SE TS
De [o t st ve pm en co s	2, 9	13 0 78 24 2 5	12 1 63 39 1 7
Pa ri gh te nt ts	9	38 6 66 8	38 6 66 8
To l in ib le ta ta ts ng as se		13 1 17 1 91 0	12 2 02 4 05 9
Pr pL & ui ty t t op er an eq pm en ,	7	57 3 06 9	99 1 14 5
To l t gi bl ta ts e an as se		57 3 06 9	99 1 14 5
In in cia st ts te ve m en as so s	17	3 36 5 89 3	17 18 8 96 6
Lo cia to te an as so s	17	0	1 08 6 90 0
To l f in ci al ta ts an as se		3 36 5 89 3	18 27 5 86 6
TO TA L NO N- C UR RE NT AS SE TS		13 11 08 71 5	14 1 29 1 06 9
CU RR EN T AS SE TS
In ie nt ve or s	8	0	2 60 5
Lo cia to te an as so s	10 ,1 7	2 42 8 80 5	54 3 45 0
Ac iva bt ts co un re ce es	10 ,1 17 5,	0	95 2 7 55
O th iva bL er re ce es	10 ,1 5	4 49 0 73 5	2 72 8 47 8
To l iv ab le ta re ce s		6 91 9 54 0	4 22 9 48 0
Ca sh d sh ui le nt an ca eq va s	11	24 94 3 33 8	16 82 4 57 7
TO CU AS SE TS TA L RR EN T		31 86 2 87 8	20 80 9 90 9
TO TA LA SS ET S		16 69 73 75 0	16 2 10 09 79

Statement of Financial Position - Badger Explorer ÅSA

ALL figures in NOK

EQ UI TY AN D LI AB IL IT IE S	No te	20 13	20 12
EQ UI TY
Sh pi l ta ar e ca	12	2 31 16 1 7	2 31 16 1 7
m Sh iu ar e pr em		21 8 06 9 98 5	21 8 06 9 98 5
O th id in pi l ta er pa ca	6	2 96 5 78 7	4 58 1 52 3
To l id in ui ta ty pa eq		22 3 35 2 93 3	22 4 96 8 66 9
Re ta in ed in ea rn gs		-1 21 05 9 98 7	-9 2 59 8 43 4
To l in ed in ta ta re ea rn gs		-1 21 05 9 98 7	-9 2 59 8 43 4
TO TA L EQ UI TY		10 22 92 94 6	13 23 70 23 5
LI AB IL IT IE S
Ca pit aL ise d ts gr an	14	53 92 0 00 0	24 00 0 00 0
rm To l lo lia bi lit ie ta te ng s		53 92 0 00 0	24 00 0 00 0
A ab nt te cc ou sp ay	13 ,1 7	44 01 24 7	28 72 34 8
Pu bt ic du tie bL s pa ya es		3 10 4 25 3	1 27 0 88 8
m O th sh Lia bi Lit ies t t er or er	16	3 25 5 30 5	1 58 7 50 8
m To l sh lia bi lit ie ta t t or er s		10 76 0 80 5	73 0 74 5 5
TO TA L LI AB IL IT IE S		64 68 0 80 4	29 73 0 74 5
TO TA L EQ UI TY AN D LI AB IL IT IE S		16 6 97 3 75 0	16 2 10 0 97 9

frlc~J

Marcus H~isson (Chairman of tMe Board)

3lstMarch 2014

member)

Tone Kvåle (Board member)

~4~tes~)

(Board member)

Steinar Bakke

(President & CEO)

Statement of Cash Flow - Badger Explorer ASA

AlL figures in NOK

	No te	20 13	20 12
m Ca sh flo w fro io l a iv iti at ct op er na es
m C fro tri bu tio at io * on ns op er ns		-2 0 69 9 64 7	-1 4 61 9 53 6
Ch in iva bL d bL ts ts ge e e an ac co un re ce an ac co un pa ya		2 48 6 45 1	3 78 1 36 8
Ch in he iva bL d bt ot an ge r re ce es an pa ya es		2 81 1 65 5	-1 61 09 9 5
m Ne h flo w fro in tiv iti t c at as op er g ac es	Å	-1 5 40 1 54 1	-1 2 45 3 26 8
m Ca sh flo w fro in tiv iti st t ve m en ac es
In in fix ed st t t ve m en as se	7	0	-7 5 49 3
Lo cia to te an as so s	15 ,1 7	98 45 -7 5	-1 63 0 35 0
Sa of ui te t eq pm en		0	29 4 29 7
Sa Le of sh in bs id ia rie ar es su s	3, 17	44 2 10 8 5	2 14 8 75
C ita lis io of de Lo at t c ts ap n ve pm en os	9	-3 1 52 3 30 2	-1 7 14 9 05 8
m Ne sh flo w fro in tiv iti t st t ca ve m en ac es	B	-2 6 87 9 64 9	-1 7 80 8 45 6
m Ca sh flo w fro fin ci tiv iti ng an ac es
Pu bl ic ts gr an		20 34 2 65 2	2 84 2 65 2
m C tri bu tio fro in du st rtn on ns ry pa er s	14	29 92 0 00 0	7 80 0 00 0
In id te st re pa		-2 65 8	-5 0 84 2
In ive d te st re re ce		38 6 71 0	82 0 08 1
m Ne sh flo w fro fin ci tiv iti t ca an ng ac es	C	50 64 6 70 4	11 41 I 89 0
To L ha in sh fL ow ta t c ne ng es ca	A+ B+ C	8 36 5 51 4	-1 8 84 9 83 3
Ca sh d sh ui le 1.1 nt an ca eq va s	11	16 82 4 57 7	35 42 65 7 7
Ca sh d sh ui le nt 31 .1 2. an ca eq va s	11	24 94 3 33 8	16 57 7 82 4
N Lt et re su		-2 84 61 55 7	-1 79 64 62 1
Em pl tio oy ee op ns	6	-1 61 5 73 6	1 36 2 73 2
De ia tio pr ec n	7	45 0 75 3	65 0 67 6
Fi ia L in e na nc co m		-7 35 28 7	-8 20 08 1
Fi ia L na nc ex pe nc es		33 9 33 5	11 01 30 0
W rit do of sh of bs id ia e- n ar es su ry w	3, 17	2 34 6 00 0	0
of of Lo Le sh bs id ia ss on sa ar es su ry	3, 17	6 97 6 84 5	1 05 0 45 8
m *T a( rib io fro io ot nt ut at co ns op er ns		-2 0 69 9 64 7	-1 4 61 9 53 6

Statement of Change in Equity - Badger Explorer ÅSA

A1[ figures in NOK

			O th er
	Sh ar e	Sh ar e	td in pa	Re in ed ta	To l ta
	pi l ta ca	m iu pr em	pi l ta ca	in ea rn gs	ui ty eq
Eq ui of i Ja y2 O i2 ty as nu ar	23 17 16 1	21 80 69 98 5	32 18 79 1	46 33 81 3 -7	14 89 72 12 4
Pr of it (Lo ) f th ss or e ye ar				-1 7 96 4 62 1	-1 7 96 4 62 1
O io pL pt t n an pa ym en			1 36 2 73 2		i 36 2 73 2
of Eq ui 3i De be r2 0l 2 ty as ce m	23 17 16 1	21 80 69 98 5	45 81 52 3	-9 25 98 43 4	13 23 70 23 5
Pr of it (Lo ) f th ss or e ye ar				-2 8 46 1 55 7	-2 8 46 1 55 7
O pt io pL t n an pa ym en			-i 61 5 73 6		-i 61 5 73 6
of Eq ui ty 3l De be r2 0l 3 as ce m	23 17 16 1	21 80 69 98 5	29 65 78 7	-12 1 05 99 87	10 22 92 94 6

Note I Accounting policies

Badger Explorer ASA is ^a pubtic Limited company registered in Norway and Listed on the OsLo Stock Exchange (Oslo Axess List). The Companys head office is Located at Forusskogen 1, 4033 Stavanger, Norway. The financiaL statement of Badger ExpLorer ÅSA has been prepared in accordance with International FinanciaL Reporting Standards (IFRS) as adopted by the EU as of 31 December 2013.

The financial statement has been prepared on an historicaL cost basis.

1.1 Investments in associates

Investments in associates are accounted in accordance with the equity method.

1.2 Other accounting policies

The financiaL statement for the Company has been prepared in accordance with the principLes used for the Badger ExpLorer Group (the Group). Reference is thus made to the accounting poLicies 1.1 . 1.24 of the Group.

Note 2 PubLic grartts~and development costs

(ALL figures in NOK)

The Company has previousLy received pubtic grants from the Research Councit of Norway (RCN) and Skattefunn for the Badger Explorer development project. The Badger Explorer devetopment project has been pLedged grants from RCN and Skattefunn for both ²⁰¹² and 2013. ALL development costs reLated to this project are capitaLised except for NOK 3.267 miLLion for 2013 and NOK 2.826 milLion for 2012 related to IFRS restnction on capitaLisation of own personneL cost. In ²⁰¹³ BXPL received ^a pubtic grant from Innovation Norway of NOK ¹⁴ miLLion for BXPLs ongoing Badger ExpLorer Devetopment Program. BXPL aLso received grants from RCN of NOK 5.071 miLlion and Skattefunn of NOK 1.280 milLion. Public grants reLated to the Badger Explorer deveLopment project are deducted in the carrying amount of the reLated asset.

No 3 Fi ial ite te na nc m s
(AL L f igu in NO K) re s	20 13	20 12
Int t i reL d sh d sh uiv aL ate to ts er es nc om e ca an ca eq en	36 4 38 5	1 00 0 77
W rite -d of sh of bs idi ow n are s su ar y	-2 34 6 00 0	0
Lo Le of sh of bs idi on ss sa are s su ar y	-6 97 6 84 5	-1 05 0 45 8
Ot r f he ina iaL inc e nc om	22 32 5	38 34 4
Ot he r f ina iaL nc ex pe ns es	-2 65 8	0
Cu in rre nc y ga	34 8 57 7	10 73 8
Cu [os rre nc s y	-33 6 67 6	-50 84 2
Ne t f ina ia l i te nc m s	-8 92 6 89 3	-28 1 21 9

(ALL figures in NOK)

Note 4 Tax

In et co m ax ex pe ns e	20 13	20 12
Pa ble ta ya x	0	0
Ch in de fe d ta an ge s rre x	0	0
To l t ta ax ex pe ns e	0	0
Su of dif fe te mm ar y m po ra ry re nc es :
Fix ed ts as se	-68 8 13 1	-63 5 99 1
fo Lo rri ed d ss ca rw ar	-12 4 48 6 08 9	-10 3 80 82 11
To l ta	-1 25 17 42 20	-1 04 44 42 02
De fe d ta t rre x as se	-3 3 79 7 03 9	-2 9 24 4 37 7
De fe d St f F ina ial Po sit ion ta t - at t o rre as se em en nc x	20 13	20 12
Fix ed ts as se	18 5 79 5	17 80 77
fo Lo rri ed d ss ca rw ar	33 61 1 24 4	29 06 6 29 9
To l d ef d ta ta t er re x as se	33 79 03 9 7	29 24 4 37 7
Va lua tio alL n ce ow an	-33 79 7 03 9	-29 24 4 37 7
St ia( To l d ef d nis ed in th f F ina Po sit ion ta ta t r at t o e er re x as se ec og em en nc	0	0

Note 4 Tax (continues)

(All figures in NOK)

Deferred tax asset is not recognised in the Statement of Financial Position as the Company is in ^a development phase and is currently generating Losses.

Lo rri ed fo d 31 De mb 20 13 at ss es ca rw ar as ce er :	20 13	20 12
fo Un tim ite d ing d ca rry rw ar	12 4 48 6 08 9	10 3 80 8 21 1

Ef fe ive ct ta te x ra :
Pr of it I ([o ) b ef ta ss or e x	-28 46 1 55 7	-17 96 4 62 1
% Ex d inc ply ing mi l t of 28 No ian Ta Ra cte ta te te pe om e x ap no na ax ra rw eg x	96 9 23 6 -7	03 0 09 4 -5
Pe t d iffe rm an en re nc es *	2 16 4 83 1	67 3 93 4
% % m Ef fe du ch in fro 28 27 de fe d ct to ta rat to ta t e an ge x e on rre x as se	1 2 51 74 2	0
Ch in de fe d nis ed in th St f F ina ial Po sit ion ta t n ot at t o an ge s rre x as se rec og e em en nc	4 55 2 66 3	4 35 6 15 9
Ca lcu lat ed ta st x co	0	0
Ef fe cti e ta rat ve x	0 %	0 %

Includes non-deductible costs such as meals, entertainment and non-taxabte share dividends.

Tax cost compared to earnings before tax.

Note 5 Earnings per share

(All figures in NOK)

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the Company by the weightecl average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit for the year attnbutabte to ordinary equity hotders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of dilutive potential shares.

Options awardecl to employees at the end of 2006 and 2007 are waived and not inctuded in the calculation of diluted earnings par share. The effect of the options awarded to employees in September 2009, June 2010, September 2011 and September 2013 are included in the calcutation of dituted earnings per share both for 2012 and 2013.

	20 13	20 12
of ([o ) Pr it ss	-28 46 1 55 7	-17 96 4 62 1
W eig hte d din din sh tst av er ag e ou an g or ar y are s	18 53 28 8 7	18 53 28 8 7
Ef fe of di lut ion ha tio ct - s re op ns	50 66 7	92 26 5
W eig hte d din di lut ed sh tst av er ag e ou an g are s	18 58 7 95 5	18 62 9 55 3
Ea ing sh e rn sp er ar	20 13	20 12
Or din ar y	-1 ,54	-0 ,97
Di lut ed	-1 ,53	-0 ,96

Note 6~SaIaHes, other benefits, nui~ber of employees (AlL figures in NOK)

Pa ol l a nd lat ed sts yr re co	20 13	20 12
Sa lar ies d tio n an va ca pa y	12 36 4 13 6	13 61 4 45 1
Em plo rs' tio l i rib ion nt ut ye na na ns ur an ce co s	1 9 62 40 1	2 38 1 05 8
Op tio pla t ( l. tio l i rib ion )* nt ut n n pa ym en mc na na ns ur an ce co	-1 58 9 63 7	I 2 04 38 8
of Co Re rat ion to th Bo ard Di cto d th No ina tio itte e e n e mu ne re rs an m m m	1 I 1 5 00 0	I 18 5 00 0
Ot he r b ef its (in ion he ) ct. en pe ns sc me	1 0 56 48 5	i 19 3 46 5
To l ta	14 90 83 84	19 83 62 57

Total of NOK 2.402 million relates to the share options costs due to severance of empLoyment of previous CEO Mr. David Blacklaw. Total of 370,579 share options, granted in 2011, forfeited prior to vesting on 15 September 2013.

Nu be fe pl m ro m oy ee s	20 13	20 12
Th mb of plo in fu ll tim uiv ale nt e av er ag e nu er em ye es e eq	13	1 5

Note 6 Salartes, other benefits, number of employees (continues) (ALL figures in NOK)

Pensions

The pension scheme in Badger Exptorer ASA is ^a defineci contributton scheme where agreed contributions are expensed as paid. Contributions range from 4% to 7% of the employees salary. The Company has no further pension commitments when agreed contributtons are paid. The Companys contribution costs are charged to the income statement in the year in which the contribution appties. The scheme fulfits the Legal requirements for occupational pension schemes (OTP).

		20 13	20 12
Co rib ion ed du rin th nt ut s ex pe ns g e ye ar		47 18 1 7	59 3 44 7
		20 13
	Sa lar y	Ot he r B ef its en	Pe jon ns
of Re at ion to be Ma nt m un er me m rs na ge me			he sts me sc co
Ch Of (C EO ief Ex uti fic 1 ~ ec ve er	I 35 6 83 1	29 1 94 3	36 46 4
EO Ch ief Ex uti Of fic (C 2) ec ve er	52 5 00 0	10 4 37 9	15 41 8
O Ch ief Fin cia l O ffi r ( CF an ce	98 9 60 5	18 4 55	27 83 7
Ch ief Of fic (C TO ) Te ch log no y er	1 0 13 08 4	23 18 7	52 80 3
Sr . V ice Pr ide Bu sin De & S nt tr at es es s eg v. y	94 7 33 6	14 13 2	26 25 6
Ge l M ne ra an ag er	11 95 66 5	28 45 0	52 98 2
Le l A dv ise r & HR Ma ga na ge r	57 3 68 1	17 23 8	22 81 0

The Board of Directors granted ^a bonus of NOK 100,000 to Steinar Bakke (CEO 2).

There was ^a change of Chief Execute Officer during 2013. Mr. David Blacklaw (CEO 1) left the Company on 15 September 2013 and Mr. Steinar Bakke (CEO 2) took office on 16September2013.

Manager Quatity, Risk & Supply Chain took up his new position as General Manager on I JuLy 2013. The amount indicated above was paid for the entire year 2013.

Remuneration indicated above for CFO and Sr. Vice President Business Dev. & Strategy does not inctude any payments made in respect of performed consuLtancy services. For transacttons wtth related parties see note 13.

At the end of 2013, Management of Badger Explorer ASA consists of CEO, CFO, CTO, Sr. Vice President Business Dev. & Strategy, General Manager and Legal Adviser & HR Manager

	20 12
Re ion be of Ma at to nt m un er me m rs na ge me	Sa lar y	Ot he r B ef its en	Pe jo ns n he sts me sc co
Ch ief Ex uti Of fic (C EO )* ec ve er	I 68 5 23 0	20 6 08 4	54 83 5
Ch ief Fin t O ffi r ( CF O) cta an ce	i 64 8 58 5	29 03 4	58 79 2
Ch ief Of fic (C TO 1 ~ Te ch log no y er	67 2 31 6	8 9 64	16 37 2
TO Ch ief Te ch log Of fic (C 2) ** no er y	54 9 96 3	15 28 9	38 52 2
Sr . V Pr ide Bu sin De & St tce nt rat es es s v. eg y	1 5 13 70 2	30 95 3	55 52 3
Ma rQ lity Ris k & Su lyC ha in na ge ua pp ,	11 48 87 1	29 11 0	55 30 5

The Board of Directors granted ^a bonus of NOK 100,000 to Mr. David Blacklaw (CEO).

** There was ^a change of Chief Technology Officer durtng 2012. Mr. Erling Woods (CTO 1) left the Company on 30 April 2012 and Mr. Øystein Larsen (CTO 2) was appotnted on 1 July 2012.

At the end of 2012, Management of Badger Explorer ASA consists of CEO, CFO, CTO, Sr. Vice President Business Dev. & Strategy and Manager Quality, Risk & Supply Chain.

Shares and options owned directly or indirectly by members of Management as of 31 December 2013

	Sh are s	Op tio ns
EO Ch ief Ex uti Of fic (C 2) ec ve er	30 00 0	37 0 00 0
Ch ief l O ffi (C FO ) Fin cia an ce r	30 9 87 2	16 66 7
Ch ief Of fic (C TO ) Te ch log no y er	0	5 00 0
Sr St . V Pr ide Bu De & tce nt stn rat es es s v. eg y	22 9 42 2	25 00 0
Ge l M ne ra an ag er	0	25 00 0
Le l A dv ise r & HR Ma ga na ge r	0	7 50 0
To l ta	56 9 29 4	44 9 16 7

Badger Explorer ÅSA ²⁰¹³ - Notes

Ch in sh tio d by mb an ge s ar e op ns ow ne me er s of Ma nt na ge me	Op tio of 1 ns as Ja 20 13 nu ar y	Op tio ns fo rfe ite d in th e rio d pe	Op tio d te ns gr an in th rio d e pe	Op tio of 31 ns as De mb 20 13 ce er
O CE 1	37 0 57 9	37 0 57 9	10 0 00 0	10 0 00 0
O CE 2	0	0	37 0 00 0	37 0 00 0
To l ta	37 05 79	37 05 79	47 00 00	47 00 00

The previous option program came into effect in Q3 2009. According to the employee option program, 25,000 share options were granted to CFO, 15,000 share options to CTO and 25,000 share options to Sr. Vice President Business Dev. & Strategy at strike of NOK 10. Manager Quality, Risk and Supply Chain was granted 25,000 share options in 2010 at ^a strike of NOK 15. The options entitle purchasing of shares during the 3.2 years period until 15 November 2012. This penod has been extended until three to ten days after the publication of Annual Report 2013. CFO exercised 8,333 share options during 2011. CTO exercised 8,333 share options dunng 2011. In 2012 ^a total of 16,667 share options, held by CTO 1, forfeited. CTO I left the Company on 30 April 2012 and the new CTO was appointed on I July 2012. The new CTO was granted 5,000 share options. The Legal Adviser & HR Manager was granted 7,500 share options. All options were 'out of money" as of 31 December 2013.

In Q3 2011 Mr. David Blacklaw (former CEO) was granted 370,579 share options in BXPL at ^a strike price of NOK 19. These options must be exercised three to ten days after the publication of the Q3 2014 report. Mr. Blacklaw resigned as the Company's President and CEO on 15 September 2013. Å total of 370,597 share options forfeited on ¹⁵ September 2013.

At the end of September 2013, BXPL entered into ^a consultancy agreement with Mr. David Blacklaw (former CEO). Mr. Blacklaw was granted 100,000 share options to acquire shares in BXPL at ^a stnke pnce of NOK 7.50. The share options can be exercised from the effective date of the consultancy agreement until the day of the publication of the Company's Q4 2015 report and were "in the money" as of 31 December 2013.

On 16 September 2013, Mr. Steinar Bakke took on the position as President and CEO. Upon commencement of the employment, Mr. Bakke was granted 370,000 share options in BXPL at ^a strike price of NOK 6.50. 185,000 share options will vest on the day of the publication of the Company's Q4 ²⁰¹⁵ report. Å further 185,000 share options will vest on the day of the publication of the Company's Q2 ²⁰¹⁷ report. The exercise of fulty vested share options is at the sote of discretion of the option holder. All share options were "in the money" as of 31 December 2013.

Remuneration to the Board of Directors and the Nomination Committee

Remuneration to the members of the Board of Directors for 2012, that was approved by the Annual General Meeting in 2013, is divided among the Board members as follows: NOK 300,000 to the Chairman of the Board, NOK 150,000 to both Mrs. Kristine Holm and Mrs. Tone Kvåte with the addition of NOK 50,000 for her work in the Audit Committee, NOK 300,000 to Mr. Clive Mather, NOK 125,000 to Mr. John R. Wilson. Due to John R. Wilson's resignation from the Board, his remuneration for the penod ²⁷ April ²⁰¹¹ . ⁸ October ²⁰¹² was calculated on pro rata basis.

The Remuneration to members of the Nomination Committee is dMded as follows: NOK 25,000 to the Chairman of the Nomination Committee and NOK 15,000 to each of the member of Nomination Committee.

The Remuneration to the Board of Directors and the Nomination Committee, that was approved by the General Assembly and paid in 2012 and 2013, is listed in table below:

Re ion th Bo d of Di d th No ina tio Co itte at to cto m un er e ar re rs an e m n m m e	20 13	20 12
Ma Ha - C ha irm of th Bo d, Au dit Co itte 20 11 /2 01 2 rcu s ns so n an e ar m m e	30 0 00 0	20 0 00 0
lm Kr ist ine Ho - B rd mb 20 11 /2 01 2 oa me er	15 0 00 0	15 0 00 0
åle Co /2 To Kv - B rd mb , A ud it itte 20 11 01 2 ne e oa me er m m	20 0 00 0	20 0 00 0
Cl /2 ive Ma th - B rd mb 20 11 01 2 er oa me er	30 0 00 0	30 0 00 0
Oc Jo hn R. W ils - B rd mb (27 Ap ril2 01 1 -8 be r 2 01 2) to on oa me er	12 5 00 0	30 0 00 0
Ro lf E. Ah lqv ist - N ina tio Co itte om n m m e	20 00 0	15 00 0
Bjø Gr lan d - N ina tio Co itte et rge om n m m e	10 00 0	10 00 0
Åm Co Kn ut - N ina tio itte n e om m m	10 00 0	10 00 0
To l r ion ta at em un er	i 11 00 0 5	1 18 00 0 5

Employee options

In Q3 ²⁰⁰⁹ the previous option program was established replacing options granted in ²⁰⁰⁶ and 2007. All BXPL employees at that time were allocated options. The Manager Quality, Risk and Supply Chain was allocated 25,000 shares upon commencement of his employment on I June 2010. One third of the options vests after one year, another third of the options vests after two years and an additional third after three years. The exercise of options can be postponed but not past the contractual life of 3.2 years. This penod has been extended three to ten days efter the publication of the Annual Report 2013. Fair vaLue of the options is calculated at the time of grant and will be recognised over the corresponding vesting penod of the options. CEO 1 was granted 370,579 shares on 10September2011 which must be exercised three to ten days after the publication of the Q3 ²⁰¹⁴ report. Total of 370,597 share options forfeited when CEO ^I resigned on ¹⁵ September 2013. Å total number of 470,000 share options held by Management were granted dunng 2013. Å total number of ⁴¹ 2,246 share options heLd by Management forfeited as of ³¹ December 2013. Share options were neither exercised nor expired dunng 2013. Å total of 520,667 share options held by BXPL employees were outstanding as of 31 December 2013.

Badger Explorer ASA 2013 - Notes

	20 13		20	12
Su of di tio tst mm ar ou an ng op ns y :	Sh tio e ar op ns av er	W eig hte d cis e e ag ex er ice pr	Sh tio e ar op ns	W eig ht ed cis e e av er ag ex er pn ce
Ou din tio 1.1 tst an g op ns	46 2 91 3	17 ,46	64 6 24 8	15 ,35
Gr ted tio an op ns	47 0 00 0	6,7 1	0,0 0	0,0 0
Ex cis ed tio er op ns	0,0 0	0,0 0	0,0 0	0,0 0
Fo rfe ite d	-4 12 24 6	18 ,09	-11 1 66 8	10 ,00
Ex pir ed tio op ns	0,0 0	0,0 0	-71 66 7	10 ,00
Ou din tio 31 .12 tst an g op ns	52 0 66 7	7,2 7	46 2 91 3	17 ,46
Ve do ion ste pt s	15 06 67	9, 17	92 33 4	11 ,35
W eig hte d Av Fa ir V alu of tio d te er ag e e op ns gr an du rin th rio d g e pe	0,0 0	0,0 0	0,0 0	0,0 0
Ch ed ain th lnc st sta te t: arg ag e om e m en	-1 61 5 73 6		I 36 2 73 2
Ch ed ain th Inc St st at t - arg ag e om e em en Em plo rs' tio l i rib ion nt ut ce ye na na ns ur an co :	26 09 9		-15 8 34 4

Fair value of the options is estimated based on the Black and Scholes option pncing model.

The Board of Directors hotds an authorisation to issue shares in the Company resolved by the Annual General Meeting of the Company in 2013. The authorisation is provicieci until 30 June 2014 in respect of increase in the Company's share capital with up to NOK 115,858 by way of issuance of up to 926,864 shares in connection with the Company's share incentive scheme.

Note~6 Salaries, ot er benefits, number~ofe~pLoyees (co~inues)

(ALL figures in NOK)

Implemented remuneration policy for members of Management for 2013

The main principle of the Company's remuneration policy for the BXPL's Management is to offer competitive terms in an overalL perspective taking into account salary, payments in kind, bonuses, pensjon plans and other benefits, to retain key staff.

Management salanes and benefits for 2013 wiLl be based on the pnnciples noted beLow.

The fixed saLary for each member of the Management shaU be competitive and based on the individual's experience, responsibiLities as weLL as the resuLts achieved during the previous year. Salaries as welL as other benefits shaLt be reviewed annually, and adjusted as appropnate.

In addition to their base salary, the Company's Management may be granted additionaL remuneration in the form of ^a bonus. If ^a bonus scheme is impLemented in 2013, the assessment criteria wILL be based on both the Company's performance and the individual's performance. The targets to be reached by the CEO are to be determined by the Company's Board of Directors. The CEO will set relevant targets for the other members of the Management team, based on principles defined by BXPL's Board of Directors.

The Company's Management wiLl receive payment in kind such as celL phone expenses and payment of IT and telecommunication expenses.

On ¹⁵ September 2009, the previous share option program for all BXPL employees at the time was implemented. The current Management has been allocated 442,246 share options. Each option entitLes the option holder to purchase one share at ^a strike pnce of NOK 10 (applicabLe to 46,667 shares options granted to CFO Gunnar Dolven, CTO Øystein Larsen and Sr. VP Dev. & Strategy KjeLL Markman), NOK 15 (applicabLe to 25,000 share options granted the Manager Quality, Risk and Supply Chain). On 6 September 2011, the new CEO was granted 370, 579 share options at ^a strike price of NOK 19, which may be exercised after the pubtication of the Q3 2014 financiaL report. Upon exercise of the options, the option holder shalL pay to the Company ^a pnce of NOK 10 (NOK 15 and NOK 19 respectively) per option share. If, on the exercise day, the market price of the BXPL shares exceeds NOK 50, the exercise price shall be increased by an amount equivalent to 8% of the market pnce less NOK 50.

All members of the Company's Management are included in the defined contribution pensjon scheme established by BXPL for all its employees. The scheme is deposit based and contributions range from 4% to 7% of the empLoyee's salary - maximized to ^a percentage of 12G. The retirement age for all employees, including Management, is 67 years.

Remuneration policy for members of Management - Guldelines for 2014:

The main principle of the Company's remuneration policy for the BXPL's Management is to offer competitive terms in an overali perspective taking into account salary, payments in kind, bonuses, pensjon plans and other benefits, to retain key staff.

Management salaries and benefits for 2014 wiLl be based on the pnnciples noted below.

The fixed salary for each member of the Management shall be competitive and based on the individual's expenence, responsibilities as weIl as the resutts achieved during the previous year. Salaries as well as other benefits shaU be revtewed annuaLly, and adjusted as appropnate.

In addition to their base salary, the Company's Management may be granted additional remuneration in the form of ^a bonus. If ^a bonus scheme is implemented in 2014, the assessment cntena will be based on both the Company's performance and the individual's performance. The targets to be reached by the CEO are to be determined by the Company's Board of Directors. The CEO will set relevant targets for the other members of the Management team, based on principles defined by BXPL's Board of Directors.

The Company's Management will receive payment in kind such as ceLL phone expenses and payment of IT and telecommunication expenses.

In February 2014, ^a new share option program for all BXPL employees was implemented. The current Management has been allocated 48,000 share options. Each option entitles the option holder to purchase one share at ^a strike price of NOK 7.51. If, on the exercise day, the market price of the BXPL shares exceeds NOK 50, the exercise pnce shall be increased by an amount equivalent to 8% of the market pnce Less NOK 50. The options granted wilL be vested in tranches and can be exercised at the eartiest 12 months subsequent to the date of grant and thereafter at up to 2 occasions during each calendar year, between three and 10 days after publications of the Company's Q1 and Q3 quarterly results. CEO Steinar Bakke has been granted 370,000 share options at ^a strike price of NOK 6.50. 185,000 shares options witl vest on the date of the publication of BXPL's Q4 ²⁰¹⁵ quarterly report. Å further 185,000 shares options will vest on the date of the publication of BXPL's Q2 2017 quarterly report. The exercise of fully vested shares options is at the sote discretion of the option holder.

All members of the Company's Management are included in the Company's occupational pension scheme drawn up by BXPL for aLl its employees. The pension scheme is ^a defined contribution scheme and contnbutions range from 4% to 7% of the empLoyee's salary - maximized to ^a percentage of 12G. The retirement age for aLl emptoyees, inctuding Management, is 67 years.

Fees to auditor

(ALL figures in NOK)

	20 13	20 12
Au dit fe * es	33 0 00 0	29 2 50 0
As rvi s su ran ce se ce	40 90 0	27 14 0
Ot he ist *** r a ss an ce	83 1 85 0	31 67 7
To ta l	I 20 2 75 0	35 1 31 7

All fees stated are exclucling VAT.

Audit fees consist of fees for the audit of the Company's annuaL financial statements and its internal controls. These fees also incLude review of intenm report.

Assurance services consist of fees billed for assurance and related services and include consultations concerning financial accounting and reporting standards, review of the Company's quarterLy financial statements.

Other assistance consists of fees billed for other services related to divestiture of shares in Severn Subsea Technologies Ltd. and preparation of tax returns.

AlL audit services in 2012 and 2013 are recognised as expenses. Audit-related fees incurred in 2012 and 2013 are in accordance with the Company's policy.

(ALL figures in NOK)

r Å SA Ba dg Ex plo er re	Pr pla ty nt op er a uip t eq m en	To l 2 01 3 ta	To l 2 01 2 ta
Co ice st 1.1 pr	5 7 31 65 3	5 73 1 65 3	5 65 6 16 0
Ad dit to ns	32 67 7	32 67 7	49 3 75
Co ice 31 .12 st pr	57 64 33 0	57 64 33 0	57 31 65 3
Ac ula d de iat ion te 31 .12 cu rn pr ec s	-5 19 1 26 0	-5 19 1 26 0	4 74 0 50 8
Bo ok ed lue 31 .12 va	57 30 69	57 30 69	99 1 14 5
De iat ion pr ec s		-45 0 75 3	-65 0 67 6
De iat ion te %: pr ec ra		% 3% 20 - 3	% 3% 20 - 3
Ec ic Lif (ye s) on om e ar :		-
De iat ion th od pr ec me :		st igh t L ine ra	st igh t L ine ra

The depreciation period and method are assessed each year to ensure that the method and period used harmonize with the financial reaLities of the non-current asset. The same applies to the scrap value.

Badger Explorer ASA 2013 - Notes

The Company has entered into operating Leases for offices and other equipment. The cost is as follows:

at ing tea sin st g op er co		To ta l 2 01 3	To ta l 2 01 2
Re bu lld ing nt st co on s		1 9 72 04 0	i 9 53 20 0
Ot he r		10 5 96 3	11 92 0
To l ta		2 07 8 00 3	I 96 5 12 0
um Th fu ini lat ed el lab le lea fa ll du fo llo fo tu nts to e re m m re re no n- ca nc se s e as ws r th Co e mp an y:	W ith in I y ea r	2- 5 ye ar s
			Af r 5 te ye ar s
Op ion al Le ing at st er as co	li 40 0	0	0
Re bu lld ing nt st on co s	2 08 9 04 0	4 69 3 18 6	0

The lease agreement for the main office (headquarters) has been entered into for ^a period of 5 years. This agreement expires on 31 March 2016 and incLudes an option to extend the agreement for 3+3 years at market conditions.

No inv rie te 8 to en s (A ll f igu in NO K) res
	20 13	20 12
Fin ish ed od go s	0	2 60 5
To l ta	0	2 60 5

All inventories are valued at cost. No write-down for obsolescence are needed.

~

(All figures in NOK)

The Company has recognised the foLlowing intangible assets in the Statement of Financial Position (including internal buiLt up assets such as deveLopment costs).

	De lop t ve m en
20 13	Pa * te nts	sts co	To l ta
Co l.1 st pn ce	40 00 00	12 1 93 1 68 9	12 23 31 68 9
Ad dit ion s		31 52 3 30 2	31 52 3 30 2
Dis l po sa		-29 4 29 8	-2 94 29 8
Pu bli ts c gr an		-22 37 5 45 1	-2 2 37 5 45 1
Co ice 31 .12 st pr	40 00 00	13 07 85 24 2	13 11 85 24 2
Ac ed de iat ion 31 .12 tat cu mu pr ec s	13 33 2		13 33 2
Bo ok lue 31 .12 va	38 66 68	13 07 85 24 2	13 1 17 1 91 0

The addition in 2013 consists of external services of NOK 18.079 miLlion, purchase of manufactured parts, components and materiaLs of NOK 6.337 million, internaL personneL costs of NOK 6.532 million and travel expenses of NOK 0.360 million for the Badger Explorer development project.

-29 4 36 2 84 2 65 3 63 73 91	-2 94 36 2 -2 84 2 65 3 12 20 37 39 1 13 33 2




14 9 05 8	17 14 9 05 8
34 8	10 80 25 34 8
	25

The addition in 2012 consists of external services of NOK 7.173 million and internaL personnel costs of NOK 9.946 million for the Badger Explorer development project.

There has not been made any depreciation on intangible assets in 2012 and 2013.

All development cost in 2013 and 2012 are related to the deveLoment of the Badger Explorer technology in Badger ExpLorer ASA. The development work contains inherent technology risk and risk related to the funding contnbutions from the sponsors. An amount of Management focus will continue to be applied to prudent financial management, improved cost-effectiveness and simplification of non technical activities.

The patent applies to the Badger Explorer technology and has ^a validity of ²⁰ years from date it was granted. The DeveLopment costs relate to the development of the Badger Explorer technology in Badger Explorer ASA.

Badger Explorer ASA 2013 - Notes

No 10 To l r eiv ab les te ta ec
(A ll f igu in NO K) re s
	20 13	20 12
Ac ts iva ble co un re ce s	0	95 7 55 3
Sk ef & Re h Co ciL of No iva ble att un n se arc un rw ay re ce s	3 82 8 11 7	1 7 95 31 6
Lo cia to tes an as so	2 4 28 80 5	54 3 45 0
Ot he eiv ab les r r ec	66 2 61 8	93 3 16 1
To l r eiv ab les ta ec	6 91 9 54 0	4 22 9 48 1

There is no provision for losses on receivables. Other receivabLes are mainly related to government grants and prepald expenses. For age distribution of accounts recetvables see note 15.

No Ca sI~ d sh uiv ale te 11 nt an ca eq s
(A ll f igu in NO K) re s
	20 13	20 12
Ca sh ba nk at	24 94 33 38	16 78 24 57
Re ict ed ba nk de sit str po s	60 1 06 1	70 8 73 7
No Sh ita l,~ ha iu be of sh ha ho lde te 12 nt et ar ec ap re pr em m cc ou ~ nu m rs ar es , s re rs c.
(A ll f NO K) igu in re s
Nu be f s ha m r o res	20 13	20 12
01 .01	18 53 72 88	18 53 72 88
Ca pit al inc rea se	0	0
31 .12	18 53 72 88	18 53 72 88
NO No mi l v alu ha is K 0. 12 5. e re na pe r s
Ås of De mb he lar sh eh old 31 20 13 , t 20 st ce er ge ar er s we re :	No f s ha . o res	% sh ar e
CO NV EX A CA PIT AL IV AS	3 2 00 78 0	,3% 17
ST ST D US CO AT E RE ET BA NK AN TR T	2 69 9 99 7	,6% 14
W BA NK OF NE YO RK ME LL ON SA /N V	92 2 22 4	% 5,0
M ES CO SM CO INV PE RP EU R AL L	87 4 1 55	% 4,7
G HO LB ER NO RD EN	83 0 31 1	5% 4,
OD IN OF FS HO RE	67 3 09 3	% 3,6
SK AN DI NA VI SK A EN SK ILD A BA NK EN S.A	65 00 0 5	% 3,5
IS- FO RS ING SIN ST AS IR KN VE	49 58 4 7	% 2,7
W BA NK OF NE YO RK ME LL ON (LU X) S.A	35 8 78 7	% 1,9
RÅ ING DA LV IN DG IVN AS	30 1 87 2	% 1,6
AN ØY IN V ES T DA	27 8 80 0	% 1,5
TT C INV ES T AS	25 0 00 0	% 1,3
ÅM KN UT	24 2 60 0	% 1,3
KJ EL L ER IK DR EV DA L	22 2 60 0	% 1,2
CS V II A S	21 4 00 0	% 1,2
NS JO MP PE N PK	21 3 20 0	% 1,2
SI- IO ES G AS NIL LM EN INV TE RIN	20 9 22 2	% 1,1
VE NT OR AS	19 0 00 4	% 1,0
TH E NO RT HE RN TR US T CO	18 8 19 0	% 1,0
KÅ SIG MU ND ST OK	17 8 69 3	% 1,0
20 lar st sh eh old ge ar er s	13 20 1 50 8	,2% 71
76 5 he ha ho lde ot r s re rs	33 78 0 5 5	,8% 28
To l o f 7 sh eh old ta 85 ar er s	18 53 7 28 8	0% 10 0,

All shares have equal voting nghts.

Note ¹² Share capital, share premiüm account, numbers of shares, shareholders etc. (continues)

(All figures in NOK)

The Board of Directors hotds two authorisations to issue shares in the Company resolved by the Annual General Meeting on 17 April 2013. These authonsations are vatid until the next Annual General Meeting to be held in 2014 with an ultimate expiry date on 30 Jurie 2014. The first authonzation is provided for increasing the Companys share capitat with up to NOK 115,858 by way of issuance of up to 926,864 shares in connection with the issuance of shares to employees, directors and others connected with the Company as part of the Companys share incentive scheme and the share issue against payment in other cash payment (contribution). The second authorization is provided for increasing the Companys share capitat with up to NOK 231,716 by way of issuance of up to 1,853,728 shares in conjunction with the issuance of shares to existing shareholders and new investors for ^a cash deposit or cash contnbutions and mergers.

(A lt f igu in NO K) re s
No te 13 Re lat ed ty tra tio -p ar ns ac ns

Tr cti ith lat ed rti an sa on s w re pa es	20 13	20 12
Pu rch ed rvi s* as se ce	I 87 0 94 1	0

In June 2013, BXPL entered into ^a consultancy agreement with two of its largest shareholders, Dalvin Rådgivning AS and Nitsholmen AS. Payments totalling NOK 939,117 were made to DaMn Rådgivning AS in respect of performed consuttancy services and NOK 7,709 related to travel expenses. Mr. Gunnar Dolven, who is CFO of BXPL, is ^a director of DaMn Rådgivning AS. Nilsholmen A5, ^a company owned by Mr. Kjell Markman, received payments of NOK 785,003 in respect of performed consultancy services and NOK 79,179 related to travel expenses for the period July - December 2013. Mr. Markman is Sr. VP Business Development & Strategy of BXPL.

In September 2013, BXPL entered into ^a consultancy agreement with ^a foreign company Celect LLC where Mr. David Blacklaw is ^a director. Mr. Blacklaw is the previous President and CEO of BXPL. Payments totatting NOK 59,933 were made to Celekt LLC for performed consultancy services.

of of Tr cti ith be th Bo d Di cto e an sa on s w me m rs ar re rs	20 13	20 12
Pu rch ed rvi s as se ce	0	70 00 0

At the Extraordinary General Meeting on 1 December 2010, the General Meeting provided the Board of Directors with ^a proxy to enter into agreements with close associates for the period from ^I December ²⁰¹⁰ until ³¹ December, 2011. The remuneration shatt be limited to NOK 1,500 per hour and time schedute and detailed specifications of duties shall be approved by the Company's Board of Directors pnor to entenng into such agreements. Badger Explorer ÅSA entered into the agreement with ^a Board member Tone Kvåle in 2012. The agreement, entered with Mrs. Tone Kvåle in 2012, is related to the internal audit, potential risk evaluation, compliance and review of due ditigence of BXPL's associate Severn Subsea Technologtes Ltd. No purchased services under this agreement in 2013.

Sh he ld by mb of th Bo d of Di d be of Ma cto nt ar es me er s e ar re rs an me m rs na ge me	20 13	20 12
SE B Pr iva Ba nk S.A . L bo (C ha irm - M Ha n) te ux em ur g an arc us ns so	56 5 00 0	56 5 00 0
Rå FO Da tvi dg ivn ing AS (C - G r D olv ) n un na en	30 1 87 2	30 1 87 2
AS (S St ) Ni lsh olm Inv te rin VP Bu De & rat - K je ll M km en g es r. s. v. eg y ar an	20 9 22 2	20 9 22 2
O Pr ide & CE - S ina r B ak ke nt te es	30 00 0	0
Ni lsh olm AS (S VP Bu & St - K je ll M km ) 0e rat en r. s. eg ar an v. y	20 20 0	20 20 0
Ch air - M Ha ma n arc us ns so n	11 66 8	11 66 8
O CF - G r D olv un na en	8 00 0	8 00 0
Bo ard mb - T Kv åte me er on e	00 0 5	00 0 5
O rd ina sh ry ar es	1 15 0 96 2	1 12 0 96 2
of lsh % to ta ar es	% 6,2	0% 6,

Note 14 Conaitior~l commitments

(Alt figures in NOK)

Contributions recognised as capitalised grants in the Statement of Financial Position

Badger Explorer ÅSA has received contributions from the partners amounting to NOK 53.920 million whereas NOK ²⁴ million were received prior to 2013. These contributions shatl be repaid to the partners by paying 5% royalty of att technology related sales in the future. This royatty is timited to ^a total of ¹ 50% of received contnbutions. The contributions have not been recognised as income.

Note 1~5 Financia( rjsk and Financial assets

(All figures in NOK)

Exchange rate risk

Badger ExpLorer ASA's cash reserves are deposited in Norwegian bank Sparebanken Vest. All BXPL's cash and financial instruments are in NOK and thus no exchange rate nsk inures.

In December 2012, BXPL provided ^a shareholder loan to Severn Subsea Technologies Ltd. of GBP 180,000 at interest rate of 3.20% p.a. with ^a down payment period of 1.5 years. Nigel Halladay (previous MD of Calidus Engineering Ltd.) has provided ^a loan of GBP 60,000 at interest rate of 0.875% p.a. with ^a down payment period of 1.5 years respectively. These credit agreements for the amounts of GBP 180,000 and GBP 60,000 tent by BXPL and Nigel Halladay respectively were revoked and replaced by the new credit agreement of GBP 240,000 signed in July 2013. This credit agreement is to be repaid to BXPL by 6 monthly instalments of GBP 40,000 commencing on 31 July 2013 and continuing to the end of the year 2013 with no interest. Shareholders' loan was entirely repaid to Nigel Halladay by BXPL on 22 May 2013.

Interest rate risk

Badger Explorer ASA has no interest-bearing debt. Bank deposits are exposed to market fluctuations in interest rates, which affects the fjnancjal lncome and the return on cash. BXPL has NOK -8.927 million in net financial items as of 31 December 2013: it includes ^a [oss of NOK - 6.977 million related to the divestiture of the shares and ^a write-down of NOK -2.346 million for the remaining 30% of the shares in Severn Subsea Technologies Ltd.

Credit risk

Badger Explorer ÅSA trades only wtth recognised, credttworthy third parties. It is the Company's policy that all customers that wish to trade on credit terms are subject to credit venfication procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Company's exposure to bad debts is insignificant.

BXPL has not suffered any loss on receivables during 2013. All cash in the Company is deposited in the Norwegian bank Sparebanken Vest.

Liquidity risk

Badger Explorer ÅSA monitors its liquidity risk to be able to meet its financial obligations as they fall due. An assessment of such obligations is made and compared against the cash f10w projection on ^a regular basis.

The cash position of the Badger Explorer ÅSA at year end ²⁰¹³ was NOK 24.943 million, compared to NOK 17.608 million in 2012. Remaining funding from the Badger Explorer Demonstrator Program plus, Skattefunn 2013, Research Council of Norway and Innovation Norway grants, is considered sufficient cash to carry the business into 2015. Contingericies for 2014 include overdraft facility with the Company's bank and acceterated release of public grants and partner funding. The above represents gross funding via the Demonstrator Program. In addition, the Company has announced in the Q4 2013 report that discussions have been initiated with present partners and one potential new partner to retease ^a next phase program, The Badger Development Program. The next phase is planned to commence H2 2014, that means there will be an overlap between the two programs in second half of 2014 both operationally and ftnancially. Two new partners were introduced in the Demonstrator Program, Wintershall and Chevron. An arrangement is formally accepted whereby newcomers must pay full pick-up when entering our running programs, the same will apply for additional partners joining in 2014. This means additional furids to support running operations.

Cash spend will be carefully managed dunng 2014 - 2015. The Badger Development Program, planned to commence in late 2014, will contribute to operational funding in 2014. Technical progress on the HPHT ultrasonic project will release funding from awarded grants.

At this stage in the various Badger programs, the Company foresees technical/engineering challenges, not unsolvable, but they might take time. Thus delays represent the main uncertainty. The delays might come on technical progress or in the on-going negotiations for the next phase, such delays will have financial implications. Present status thus does not give any reason to highlight these challenges, and BXPL foresees several ways to prevent delays before they occur.

Capital management

Capital includes equity.

The primary focus of the Company's capitat management is to ensure that it maintains ^a strong credit rating and ^a healthy capital ratio in order to support its business and maximize shareholders value.

Badger Explorer ÅSA manages its capital structure and makes adjustments to it, in light of changes in the economic conditions. To maintain or adjust the capital structure the Company may issue new shares. No changes were made in the objectives, policies or processes during 2013.

BXPL monitors capital using ^a gearing ratio, which is net debt divided by total capital plus net debt. Since the Company does not have any interest beanng loans, the gearing ratio is negative for both 2012 and 2013.

Badger Exptorer ÅSA ²⁰¹³ - Notes

BXPL includes within net debt, trade and other payabtes, tess cash and cash equivatents.

	20 13	20 12
Int t b rin toa d bo wi g er es ea ns an rro ng s	0	0
Tr ad d he ab les ot e an r p ay	10 76 0 80 5	30 74 5 7 5
m Le sh d sh de sit t-t ss ca an or er po s	-24 94 3 33 8	-16 57 7 82 4
Ne td eb t	-1 41 82 53 3	-1 08 47 08 0
Eq uit y	10 22 92 94 6	13 23 70 23 5
To l c ita l ta ap	10 22 92 94 6	13 23 70 23 5
C ita la nd td eb t ap ne	88 11 04 12	12 1 52 3 15 6
Ge ing tio ar ra	% -16	-9%

Fair value

The fair vaLue of financial assets are included at the amount at which the instrument could be exchanged in ^a current transaction between willing parties, other than in ^a forced or Liquidation sale.

Fair vatue of investment in shares in market based liquidity fund is based on pnce quotations as of 31 December 2013;
Fair value of cash and cash equivalent are assessed to carrying amount.

Set out below is ^a comparison by category of carrying amounts and fair values of all of the Companys financiat instruments.

	20 13			20 12
	Ca ing nt rry am ou	Fa fr lue va	Ca ing nt rry am ou	Fa ir v al ue
Ca sh d sh uiv ale nts an ca eq	24 94 3 33 8	24 94 3 33 8	16 57 7 82 4	16 57 7 82 4
Cu eiv ab nt tes rre rec	6 91 9 54 0	6 91 9 54 0	42 29 48 0	4 22 9 48 0
Tr ad d he ab les ot e an r p ay	10 76 0 80 5	10 76 08 05	30 74 57 5	30 74 57 5

Age distribution of receivable

As at 31 December 2013, the ageing analysis of receivabLes is as follows:

	To taL	Ne ith du st er pa	r i air ed e no mp	Lo eiv ab tes ss rec
20 13	69 19 54 0		69 19 54 0	0
20 12	42 29 48 0		41 95 47 0	0
Pa st	du bu im ire d t n ot e pa
	da <3 0 ys	da 30 -60 ys	da 60 -90 ys	da >9 0 ys
20 13	0	0	0	0
20 12	34 01 0	0	0	0

~ote~~

(A	ll f igu re s	in	NO K)
----	------------------------	----	----------

rm Ot he ho lia bi liti rt te r s es	2 01 3	2 01 2
Ac ed cru ex pe ns es	7 00 0	85 58 9
Em plo be fits (va tio ) ye e ne ca n ex pe ns es	1 2 37 70 5	1 5 01 91 9
rm Ot he ho rt te lia biL itie s* r s	2 01 0 60 0	0
m To ta l o th sh t t lia bi liti er or er es	3 25 5 30 5	1 58 7 50 8

Other short term Liabitities reLates to ^a shortfall payable to Severn Subsea TechnoLogies Ltd.

Badger Explorer ASA 2013 - Notes

No 17 As da te te so s
NO (A fig in K) tt ur es

Inv tm ts in cia te es en as so s:	20 13	20 12
Se Su bs Te ch log ies Ltd ve rn ea no	3 36 89 3 5	17 18 8 96 6
To l ta	3 36 5 89 3	17 18 8 96 6

Severn Subsea Technologies Ltd.

Severn Subsea Technologies Ltd. is ^a private timited company registered in UK. The company is located at 6 Jon Davey Drive, Treleigh Industrial Estate, Redruth, Cornwall TR16 4AX, UK. The first 50% of the shares were acquired for NOK 8.910 miLlion in November ²⁰⁰⁷ through ^a combined purchase of outstanding shares and ^a share issue. Additional 25% of the shares were acquired for NOK 8.279 million in ApriL ²⁰¹¹ through purchase of outstanding shares. In May 2013, BXPL acquired the remaining 25% of the shares for NOK 1.841 million, increasing its ownership to 100%. The acquisition of this non-controtling interest has been accounted for as an equity transaction in accordance with revised lAS 27.

BXPL has ^a significant influence but not ^a controt, accompanying ^a shareholding of 30% of the voting nghts.

Se Su Tr cti ith bs Te ch log ies Ltd rn ea an sa on s w ve no	20 13	20 12
Ac ble * ts co un pa ya	I 88 5 57 3	51 4 57 4
Lo cia ** to tes en as so	2 4 28 80 5	1 6 30 35 0
Pu rch ed rvi s* as se ce	13 17 2 94 1	71 95 5 5 7
Sh (n St f F )* eh old te ot nis ed in th at t o ina ial Po sit ion e e ar er s gu ar an rec og em en nc	0	I 34 9 37 0

The Company purchased engineering- and production services from Severn Subsea Technotogies Ltd. Nigel Halladay (previous MD of Calidus Engineering Ltd.) owns 75,500 shares in BXPL. All purchased services from Severn Subsea TechnoLogies Ltd. in ²⁰¹² and ²⁰¹³ are related to the development project.

In December 2012, BXPL provided ^a shareholder loan to Severn Subsea Technotogies Ltd. of GBP 180,000 at an interest rate of 3.2% p.a. with ^a down payment period of 1.5 years. Nigel Halladay (previous MD of Calidus Engineering Ltd.) has provided ^a loan of GBP 60,000 at interest rate of 0.875% p.a. with ^a down payment penod of 1.5 years accordingly. These credit agreements for the amounts of GBP 180,000 and GBP 60,000 tent by BXPL and Nigel Halladay respectively were revoked and replaced by the new credit agreement of GBP 240, 000 signed in July 2013. This credit agreement is to be repaid to BXPL by 6 monthty instalments of GBP 40,000 commencing as of 31 Juty 2013 and continuing to the end of the year 2013 with no interest. Sharehotders Loan was entirely repaid to Nigel I-latladay by BXPL on 22 May 2013.

Due to the divestiture of shares in Severn Subsea Technotogies Ltd., BXPL was released from its sharehotders guarantee on ²¹ November 2013.

Eq uit d Ne fit (lo ) S Su bs Te ch log ies Lt d. t p y an ro ss ev er n ea no	20 13	20 12
Eq uit y3 l.1 2.	24 16 67 9	62 93 10 9
Cu tio tra ta n rre nc y ns	-96 3 65 7	15 5 50 9
Ne fit (lo ) t p ro ss	-4 84 0 08 7	-3 37 9 56 6
Ca ing of sh .* nt 31 .12 rry am ou are s	3 36 5 89 3	17 18 8 96 6

^~ The detailed calculation of the carrying amount movements of the investment in Severn Subsea Technologies Ltd. is presented betow.

Movements in the carrying amount of the investment in the Statement of Financial Position of Badger Explorer ASA:

% inv t i Se Su bs Te ch log ies Ltd f 3 De mb 75 tm 1 20 12 n rn ea es en ve no . a s o ce er	17 18 8 96 6
% ad dit ion al inv of Ma 25 tm t a 22 y 2 01 3 es en s	1 8 50 67 6
0% f 7 of of Di stm t o th sh 28 Ju 20 13 e ne ve en are s as	-13 32 7 74 9
% fa of of W rite -d to tim at ed ir lue th ini 30 th sh n e ng e ow es va re ma are s	-2 34 6 00 0
Cl ing ba lan fo he rio d de d 31 De be r 2 01 3 r t os ce pe en ce m	3 36 89 3 5

No~e 18 Subsequent events

On 29 January 2014, the Steenng Committee formally approved the delivery of Milestone 4 of the Badger Exptorer Demonstrator Program. The delivery inctuded testing of the dritting and compaction modute, the transport system and the Hydrautic Power Unit. The modute tests were executed in two stages; 1) testing the modules basic functionality and 2) ability of each module's to meet the specifications.

AI Terminal

Hunter Group ASA

3626_rns_2014-03-31_b69ef92f-4b2c-417d-a60b-1c18e8739ffa.pdf

Income Statement - Badger Explorer Group

Statement of financial position - Badger Explorer Group

Statement of financial position - Badger Explorer Group

Statement of comprehensive income - Badger Explorer Group

Statement of Change in Equity - Badger Explorer Group

Consolidated Statement of Cash FLow - Badger Explorer Group

1.1 Consolidation

Note I Åccounting poticies ~ontinu~)

1.3 Currency

1.4 Comparatives

1.5 Financial assets

Initiat recognition

Badger Explorer Group 2013 - Notes

Subseguent measurement

Financial assets at fair vatue through profit ar loss

Loans and receivables

1.6 Financial Iiabi(ity

Subseguent measurement

Financial liabilities at fair value through profit or loss

Loans ond borrowings

Derecognition

Offsetting of financial instruments

1.7 Inventory

1.8 Cash and cash equivalents

1.9 Accounts receivable

1.10 Fixed assets

1.11 Intangible assets

Patents and licenses

Research and development

Goodwill

1.12 Provisions

1.13 Principles for revenue recognition

I .14 Public grants and contribution from partners

Note I Accounting poIic~s~o~tinL~s)

1.15 Incometax

1.16 Contingent habilities and assets

1.17 Events after the balance sheet date

1.18 Use of estimates when preparing the annual financial statements

Not~1 Accounting policies (~ontinues)

1.19 Leasing

Finance leases

Oierating leases

1.20 Share options

Note I Accounting polides (conth~ues)

1.21 Impairment of assets

1.22 Cash flow statement

1.23 Costs related to equity transactions

1.24 Changes in accounting policies and disclosures

lAS 28 lnvestment in Associates and Joint Ventures

Badger Exp(orerGroup 2013- Notes

Note 'I ~Åccounting potides (continues)

IFRS 9 Financial lnstruments: Classification and Measurement

IFRS 12 Disclosure of lnterests in Other Entities

Annual Improvements 2010-2012

IFRS 2 Share-based Payment

lAS 24 Related Porty Disclosures

Note Z Public grants and developmeot costs

(Àll figures in NOK)

Note 5 Earnings pe~r share

(All figures in NOK)

Note 6 Salaries, other benef~p4number of e~ployees

Pensions

Note 6 Salaries, other benefits, number of employees (continues)

Shares and options owned directLy or jndjrectly by members of Management as of 31 December 2013

Remuneration to the Board of Directors and the Nomination Committee

Employee options

Remuneration policy for members of Management - Guidelines for 2014:

Note 6 Salaries, other benefits, number of empLoy~s (continues) (ALL figures in NOK)

Fees to auditor

Purchase of lease - Severn Subsea Technologies Ltd. (former Calidus Engineenng Ltd.)

Badger Exptorer Group 2013 - Notes

Badger ExpLorer Group 2013 - Notes

~I~I!I1IiIIIIIIIIIiIIiIIIIIIiIIIIIiiII1I

Contribution recognised as capitalised grants in the Statement of Financial Position

Exchange rate risk

Interest rate risk

Credit risk

Note ^I Åccounting poticies ~ontinu~)

^I .14 Public grants and contribution from partners

Badger Explorer ÅSA ²⁰¹³ - Notes

Note ¹² Share capital, share premiüm account, numbers of shares, shareholders etc. (continues)

Badger Exptorer ÅSA ²⁰¹³ - Notes