Hunter Group ASA

M&A Activity • Mar 20, 2017

Badger Explorer ASA agrees to buy Dwellop AS

Badger Explorer ASA agrees to buy Dwellop AS

Badger Explorer ASA (the "Company" or "Badger") is pleased to announce that the

Company has entered into a Letter of Intent ("LOI") with the shareholders of

Dwellop AS ("Dwellop") to acquire 100% of the outstanding shares of Dwellop.

Furthermore, certain shareholders of the Company, representing approximately 28%

of the outstanding shares, have asked the Board of Directors of the Company (the

"Board") to call for an Extraordinary General Meeting ("EGM") to consider a

proposal for certain corporate changes as a result of the recent private

placement, including electing new board members to reflect the new ownership

structure in the Company.

Acquisition of Dwellop

Dwellop is an independent systems and technology provider delivering topside

handling equipment for well intervention and plugging & abandonment (P&A)

operations. A large part of the business is focused on the design and

manufacturing of high quality mechanical and structural wireline, coil tubing

and pipe handling equipment for the global well intervention market. Dwellop's

business model covers both sale and rental of equipment and systems to E&P

companies, service providers and vessel/rig owners, and the company has a broad

product portfolio for safe and cost efficient well intervention operations.

During the last three years, Dwellop has been successful in establishing the

company as a pioneer within modular workover rigs and surface handling equipment

to the well intervention market. With a leading position in this attractive

market niche, Dwellop is in a unique position to grow in a recovering market.

The company is currently involved in several advanced discussions with clients

for modular rig projects intended for well intervention and P&A operations. The

company is headquartered in Stavanger, Norway, and is currently owned by

management and key employees after a management buyout from Rolls-Royce in 2014.

Dwellop´s history dates back to 1989 and currently the Company has 40 employees

(www.dwellop.no). In 2016, Dwellop generated NOK 209m in revenues, NOK 46.5m in

EBITDA and NOK 38.2m in net income.

Pursuant to the LOI, Badger will purchase 100% of the outstanding shares in

Dwellop for an agreed purchase price of NOK 190m, whereof NOK 60m shall be

settled in cash at closing and NOK 130m shall be settled by issuance of new

shares in Badger at an agreed subscription price of NOK 0.65 per share (the

"Remuneration Shares"). As per 31st December 2016, Dwellop had a net cash

position of approximately NOK 12.2m and net working capital of approximately NOK

16.6m.

Prior to completion of the ongoing subsequent offering (the "Subsequent Offering

II"), the Remuneration Shares will constitute approximately 15.9% of the total

outstanding shares of Badger. The sellers have agreed to a lock-up period of 36

months for the Remuneration Shares after closing of the transaction, as well as

customary non-compete and non-solicitation provisions. Due to Dwellop's strong

business and product portfolio, the company will be organized as a standalone

portfolio company of Badger and will be developed on a separate basis going

forward.

The purchase price implies EV/EBITDA and P/E transaction multiples of 3.8x and

5.0x, respectively.

The transaction is subject to satisfactory outcome of a confirmatory due

diligence process, final and binding documentation and Badger board approval.

Further, the issuance of the Remuneration Shares must be resolved by the general

meeting of Badger.

The acquisition of Dwellop will require the Company to issue a supplemental

prospectus to the prospectus for the Subsequent Offering II of 14th February

The chairman of Badger comments: "We are thrilled to work with Dwellop's

management team to grow the company both organically and pursue other

acquisition opportunities within the well intervention market. In a continued

challenging market for oil & gas companies, we believe that products and

technologies which facilitate enhanced oil recovery at low costs will continue

to be in strong demand going forward. In addition to the acquisition of Dwellop,

we are also pursuing other potential acquisition opportunities, in order to

continue the growth and development of Badger into a larger and diversified

entity, in line with our communicated strategy"

Proposal to call for an Extraordinary General Meeting

Certain shareholders of the Company, representing approximately 28% of the

outstanding shares, have asked the Board to call for an EGM. The agenda for this

EGM is expected to include a proposal for electing new board members to reflect

the ownership structure after the recent private placement, certain changes to

the corporate structure, change of name and authorization related to issuance

and acquisition of own shares. The notice for EGM will be distributed in due

course.

Status Badger tool

The Company is in the process of completing a strategic and technical review of

the Badger tool and the Company's IP. The purpose of the assessment is to ensure

that the Company makes the correct decisions with respect to maximizing the

value of the tool and the IP. The Company has engaged Rystad Energy AS to assist

in this process. As previously communicated, the Company will also explore ways

to obtain alternative funding for development of the tool and IPs. It is the

intention to transfer the Badger tool and other technologies to a wholly owned

subsidiary of Badger.

Stavanger, 20th March 2017

For further information, please contact:

Marcus Hansson, COB, cell phone +44 782 4460 691

www.bxpl.com