Hunter Group ASA — Interim / Quarterly Report 2017

Aug 31, 2017

Hunter Group ASA

Half-year results 2017

31 August 2017

Disclaimer

This presentation (the "Presentation") includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Hunter Group ASA (including subsidiaries and affiliates, the "Company").

These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for the Company, oil prices, exploration and production spending levels in the oil industry, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation.

Although the Company believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. The Company is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither the Company nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This Presentation reflects the conditions and views as of the date set out on the front page of this Presentation. The information contained herein is subject to change, completion, or amendment without notice. In furnishing this Presentation, the Company undertakes no obligation to provide the recipient with access to any additional information.

An investment in the Company involves risk, and several factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this Presentation, including, among others, risks or uncertainties associated with the Company's business, segments, development, growth management, financing, market acceptance and relations with customers, and, more generally, general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Presentation. The Company does not intend, and does not assume any obligation, to update or correct the information included in this Presentation.

This Presentation does not constitute an offer or an invitation to buy, subscribe or sell shares of the Company or any other securities in any jurisdiction.

This Presentation must be read in connection with other publicly available information about the Company, including prospectuses, information memorandums, stock exchange notices, annual and interim reports published by the Company. The contents of this Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice.

This Presentation is subject to Norwegian law. Any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Norwegian courts with Oslo District Court as legal venue in the first instance.

• 1. Highlights
• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

Highlights

• New strategy; focus on acquisition of oil service technology
• NOK 385m in new equity
• Name and ticker changed from Badger Explorer ASA ("BXPL") to Hunter Group ASA ("HUNT")
• New board of directors and management
• Acquisition of Dwellop AS for NOK 185m with settlement in cash and HUNT shares in May 2017
• Initiated reorganization of Hunter Group
• Continuously in process of assessing transactions
• Work over rig delivered 24 May 2017

• Revenues of NOK 23m and negative EBIT of NOK 85m

• 1. Highlights

• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

		Year to date		Year end
Unaudited figures in NOK 1 000	Note	30.06.2017	30.06.2016	31.12.2016
Revenues
Revenues		23 045	42	66
Total Revenues		23 045	42	66
Operating expenses
Raw matrials and consumables used		13 970	1 2 9 6	1 5 6 1
Payroll expenses		10898	1830	4 1 4 0
Depreciation and amortisation expense	3	2 4 5 1	80	99
Net write-down intangible assets and capitalized grants	3	69 374
Other operating expenses		12 933	2 3 5 7	4 3 9 1
Capitalised development cost		(1915)	(2, 473)	(3515)
Total operating expenses		107 710	3 0 9 0	6676
Operating profit (loss)		(84665)	(3048)	(6610)
Interest income		1 3 5 0
Finance income		725
Other financial income
Interest expenses		(302)	(242)	(445)
Other financial expenses		(582)
Net financial income (loss)		1 1 9 1	(242)	(445)
Profit (loss) before taxes		(83 475)	(3 290)	(7055)
Tax on ordinary result	8	17 796
Net profit (loss)		(65678)	(3 290)	(7055)
Earnings per share		$-0,07$	$-0,18$	$-0,38$

• Numbers based on consolidation of Dwellop from 2 May 2017
• One off costs related to restructuring of the Company and acquisition of Dwellop. Total one off costs approx. NOK 6m
• Write-down of intangible assets (approx. NOK 151m) relates to the Badger Technology
• The related Commercial grants (approx. NOK 82m) are also written down (net write-down of NOK 69m)
• The contractual obligations related to any future earnings in Indicator based on the Badger Tool technology will remain in force should there be commercializing possibilities of the technology in the future

Balance sheet

мээсгэ
Unaudited figures in NOK 1 000	Note	30.06.2017	30.06.2016	31.12.2016
NON-CURRENT ASSETS
Research and development	2, 3	20 688	149 132	149 632
Patents and customer relationships	2, 3	21 648	387	387
Goodwill	2, 3	58 655
Total intangible assets		100 990	149 519	150 019
Property, plant, equipment & machineries		27 206	21	24
Total tangible assets		27 206	21	24
TOTAL NON-CURRENT ASSETS		128 196	149 540	150 043
CURRENT ASSETS
Inventories		1 1 8 8
Total inventories		1 188
Accounts receivables		48 314	6
Other short-term receivables		6816	2 5 1 7	605
Total current receivables		55 131	2523	605
Cash and cash equivalents		286 815	287	335
TOTAL CURRENT ASSETS		343 133	2810	940
TOTAL ASSETS		471 329	152 350	150 983

• Goodwill relates to Dwellop transaction
• Accounts receivables have decreased over the last months and was NOK 33m as of July

Balance sheet

Equity and Liabilities
Unaudited figures in NOK 1 000	Note	30.06.2017	30.06.2016	31.12.2016
EQUITY
Share capital	4	163 948	2 3 1 7	2 3 1 7
Share premium	4	504 507	218 070	218 070
Additional paid-in capital	4	$\blacksquare$	3 903	3935
Other equity	4	(227082)	(161638)	(165 403)
TOTAL EQUITY		441 373	62 652	58 919
LIABILITIES
Deferred tax liability	8	$\blacksquare$
Total deferred tax liability		٠
Capitalized grants	3		79 500	81 500
Other interest-bearing debt		13 500
Total non-current liabilities		13 500	79 500	81500
Trade creditors		7 483	2847	2 063
Accrued public charges and indirect taxes		563	180	281
Taxes payable
Debt financial institutions		3 600	6820	6889
Other current liabilities		4811	351	1 3 3 1
Total current liabilities		16 456	10 198	10 564
TOTAL LIABILITIES		29 956	89 698	92 064
TOTAL EQUITY AND LIABILITIES		471 329	152 350	150 983

• Interest bearing debt amortizes with NOK 0.9m quarterly and is due in February 2019
• Credit facility in Dwellop of NOK 15m currently undrawn

Cash flow statement

		Year to date		Year end
Unaudited figures in NOK 1 000		30.06.2017	30.06.2016	31.12.2016
Contribution from operations before tax		(12633)	(3 233)	(6730)
Change in accounts receivables and accounts payables		(11306)	(237)	(1015)
Change in inventory		7 7 1 6
Change in other receivables and payables and other		(6513)	(841)	(376)
Net cash flow from operating activities		(22736)	(4311)	(8121)
Capitalization of development cost		(1915)	(2.473)	(3516)
Net investments in PPE & intangible assets	2	(60000)
Net cash flow from investment activities		(61915)	(2, 473)	(3516)
Public grants		1 0 6 1	2 6 1 9	5 1 6 6
Contribution from industry partners			4 000	6 500
Interest received		1 3 5 0	19	30
Interest paid		(302)	(261)	(488)
Proceeds from borrowings financial institution		(7754)	109	178
Capital contribution	4	385 368
Transaction cost capital contribution	2	(18069)
Net cash flow from financing activities		361 654	6486	11 386
Total net changes in cash flow		277 002	(298)	(251)
Cash in acquired company	2	9 4 7 8
Cash and cash equivalents beginning of period		335	586	586
Cash and cash equivalents end of period		286 815	288	335

• Working capital build up
• NOK 60m relates to acqusition of Dwellop

• NOK 385m in capital contributions

• 1. Highlights

• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

An oil service technology investment company

1) WOR – Work-over rig is a movable rig used to perform well repair and production enhancement work in existing wells, which easily can be moved from one location to another 2) Simops: Simultaneous operations

Hunter Group Platform for value creation and growth in the oil service space

• Organic growth and accretive deals
• Capitalize on changing market dynamics in the industry
• Future investments to encompass both new and bolt-on acquisitions
• Multiple expansion from small to large cap
• Targeting next generation oil service companies
• Enhanced Oil Recovery ("EOR")
• Differentiating technologies
• Competitive cost
• Focusing on oil companies' opex territory, rather than capex
• Target to become a significant player within its market niche

Investing in innovative technology companies

• 1. Highlights
• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

Objective to become the leading offshore well intervention technology provider

	Work-over rigs (WOR)		Well intervention systems (WIS)
	Cantilevered & standalone solutions		Topside handling equipment for coil tubing and wireline
	Proven technology		operations
	Generic solution to ensure cost-effective and safe well intervention and P&A1 operations		Wide portfolio of recognized and field proven solutions, vetted globally

After market - Rental

Innovative solutions and technology unlocking the full potential of existing wells

The rationale for well intervention

"Cost per barrel from drilling new wells is 5-10 times more expensive than cost per barrel from well intervention" International oil major :

Increased incremental return on existing offshore infrastructure

The work-over rig's value proposition

% time saved only due to faster mob/demob¹

Link to video:http://www.dwellop.no/work-over-rigs

In addition to time savings, OPEX for liftboats are lower than for jack ups

Faster, simpler and more flexible solution

Well intervention and P&A market

• Saudi Aramco alone has an estimated constant demand for about 15 units² to change electrical submersible pumps (ESP)
• Today it exists 20 liftboats able to carry the workover rig; in addition to 8-10 under construction³

1) Selected regions shallow water platforms (less than 65m water depth) and corresponding data. Source Infield Systems, Maybank and Triyards 2) 700 wells, average 16 days incl mob to change an ESP pump with two years lifespan

• 3) GMS and management
• 4) OGUK Decommissioning Insight Report2016

Hunter crane and existing products

• Simops crane for handling of equipment and wireline operations below a cantilever
• Enable three operations at the same time
• Wireline in one crane
• Coiled tubing in another
• Drillpipe through cantilever
• The Hunter crane facilitate for simops reduction of rigs days

Powerstand

Rough design, proper guiding and tubing protection combined with minimum weight, represent valuable profit with respect to rig-up and operation.

Advanced Tension Frame

Providing optimum work conditions for coiled tubing operations on floaters such as semi-submersible rigs and drill ships.

Jacking Frame

Enabling increased productivity and safety during coiled tubing operations on fixed installations and TLP`s by ensuring efficient injector handling.

Well Intervention Towers

Enabling safe and efficient coiled tubing and wireline operations on fixed platforms by improving rigging time, access and safety.

Dwellop's products - higher efficiency through smarter solutions

• 1. Highlights
• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

Indicator AS (previously Badger Explorer)

• Strategic review of various Badger technologies
• Badger Tool technology will not be developed in-house, however open to pursue partnership with industrial players
• Consequences of change in strategy is write off of capitalized development cost

• Cash burn adjusted to minimum full effect from January 2018

• 1. Highlights

• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

Outlook

• Market conditions for oil service remains uncertain supported by high volatility in the oil price
• Uncertainties likely influencing oil companies decision with respect to capital spendings
• Continued focus on investment in technologies within oil companies "opex territory" increasing return on existing offshore infrastructure
• Growth plan for Dwellop
• Fuel organic growth by expanding leasing business model
• Expand after market services
• Strategic partnership / alliances
• Accretive bolt-on acquisitions
• Dwellop has implemented new sales strategy to increase marketing activities and to further capitalize on simops solutions

• Ongoing assessment of potential transactions

• 1. Highlights

• 2. Financials
• 3. Introduction to Hunter Group
• 4. Dwellop
• 5. Indicator
• 6. Outlook
• 7. Appendix

Hunter Group management team and board of directors

CEO	Vegard Urnes - More than 17 years experience from the oil services industry and M&A / investment banking - Previously with corporate finance at Goldman Sachs, later at ProCorp and NRP Securities before founding Navis Finance in 2013
CFO	Ola Beinnes Fosse - Eight years experience from the oil service industry, both from the financial and industrial side - Previously CFO and acting CEO in Rem Offshore ASA (2016-2017), before that credit experience from DNB Markets (2013-2016) and GIEK (2009-2013).
VP Business Development	Eirik Bergsvik - Over 25 years experience from the oil service industry - Previously CEO of Interwell AS (2011-2016), board member at MHWirth (2014-2017) and CEO of National Oilwell Varco Norway AS (2006-2011)
Board of Directors	John Vemmestad - Chairman - 35 years in senior positions from the oil industry, latest as Managing Director of Talisman Energy in Norway (2005-2014) Ingrid Elvira Leisner - Over 10 years experience as board member in listed companies; currently a board member in Spectrum ASA, Vistin Pharma ASA, TechStep ASA and Maritime and Merchant Bank ASA - Previously Head of Portfolio Management for Electric Power in Statoil Norge AS Ketil Grim Skorstad - 25 years of capital market experience as advisor and private investor

Dwellop team

CEO	Helge Hustoft - Over 30 years of industry experience - Previously senior positions in Statoil and Navion - Cand Merc., University of Oregon
	Eirik Bergsvik - Chairman - Over 25 years experience from the oil service industry - Previously CEO of Interwell AS (2011-2016), board member at MHWirth (2014-2017) and CEO of National Oilwell Varco Norway AS (2006-2011)
Board of Directors	Martha Kold Bakkevig - Broad experience from management, strategy and business development - Currently a board member in Kongsberg Gruppen ASA, Borregaard ASA, DeepWell AS, Haugaland Kraft AS, Reach Subsea ASA, Incus Investor ASA, Kold Invest AS - Previously CEO of DeepWell AS (2007-2016)
	Sigmund Prestegård - Over 30 years of experience from oil & gas industry and banking sector - The majority of the career from BP in roles spanning finance, planning, offshore operations, and asset management - Last 5 years as CFO in a start-up company developing Rotary Steerable Drilling technology

		30 August 2017
		Name	Holding	%
	HUNT, ticker on Oslo Axess	SONGA TRADING INC	72 000 001	5,5%
	- 1,311,580,130 shares outstanding	DYNAMO MANAGEMENT AS*	56 802 583	4,3%
		STOREBRAND VEKST VER JPMORGAN EUROPE LTD,	55 302 998	4,2%
	- Market cap NOK 354m	TIGERSTADEN AS	54 904 655	4,2%
		MP PENSJON PK	51 600 000	3,9%
		MIDDELBORG INVEST AS	51 004 655	3,9%
		SILVERCOIN INDUSTRIE	45 784 590	3,5%
		NORRON SICAV - TARGE SKANDINAVISKA ENSKIL	45 300 000	3,5%
		APOLLO ASSET LIMITED C/O ARNE FREDLY	41 988 525	3,2%
		ARGENTUM FONDSINVEST	32 923 145	2,5%
		VERDIPAPIRFONDET DNB	32 194 364	2,5%
		SKANDINAVISKA ENSKIL SEB - CMU	30 000 000	2,3%
		ALDEN AS	30 000 000	2,3%
		INVESCO PERP EURAN S BNY MELLON SA/NV	21 225 389	1,6%
		LINGTECH AS*	20 614 196	1,6%
		GRUNNFJELLET AS	20 000 000	1,5%
		SKANDINAVISKA ENSKIL	19 965 000	1,5%
		RESONANS INVEST AS*	19 814 196	1,5%
		GEM INVEST AS*	19 214 196	1,5%
		INITI AS*	19 214 196	1,5%
		Top 20 shareholders	739 852 689	56,4%
		Others	571 727 441	43,6%
		Total	1 311 580 130	100,0%