Norwegian drilling technology developer Badger Explorer is set to acquire compatriot Dwellop in a Nkr190 million ($22.4 million) cash-and-shares deal.

Stavanger-based Badger, which has been developing an autonomous drilling tool, will get its hands on Dwellop’s business supplying topside handling equipment for well intervention and plugging and abandonment (P&A) after signing a letter of intent for the transaction.

Dwellop, also based in Stavanger, is presently pursuing talks with clients for modular rig projects in the well intervention and P&A operations, Badger said in a statement.

The buyer will pay Nkr60 million in cash, with the remaining Nkr130 million of the purchase price to be covered by the issue of new shares in the company at a price of Nkr0.65 per share.

Badger has recently raised Nkr355 million through equity issues, with a further Nkr40 million offering being carried out this month, as it targets new business opportunities in the oil services sector to diversify its product offering, while also seeking to complete its development effort for the eponymous Badger Explorer tool.

Chairman Marcus Hansson said the Oslo-listed company is “also pursuing other potential acquisition opportunities, in order to continue the growth and development of Badger into a larger and diversified entity”.

Badger has meanwhile engaged Rystad Energy to assist in a technical and strategic review of the drilling technology, for which it has earlier received backing from heavyweight players including Statoil and China National Petroleum Corporation, while also seeking alternative sources of funding.

Development of the tool, which would be able to carry out remote drilling on the seabed to eliminate the need for a costly rig, has been stalled by industry cutbacks amid a market slump that has hit the drilling sector.