​Executive Summary

• Klin is a mechanism that enables directional drilling without stopping rotation of the drill string.

• Klin was designed as a replacement for mud motors, but in practice it can also replace existing RSS systems.

• We use a simpler and more reliable method of deflecting the wellbore in the required direction.

• Klin is roughly comparable in price to a mud motor and is significantly cheaper and more reliable than existing RSS systems, as it contains fewer wear components.

• Evidence of market demand for Klin can be seen in two slides from the presentation.

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The Problem in the Market

1. Mud motors have fundamental technological drawbacks, and the oil and gas industry has been searching for a replacement for more than 10 years:

   • complex and difficult to manufacture

   • very short service life (120–150 hours)

   • difficult to control and nearly unmanageable at greater depths

2. Current RSS systems:

   • are expensive (approximately USD 1M per tool)

   • have high failure rates

   • have limited availability

   • rely on complex electronics

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The Technology

• We use a simpler mechanism to deflect the wellbore in the desired direction.

• Fewer moving parts and the use of more reliable materials significantly increase reliability and service life.

• Lower manufacturing cost.

• Field-serviceable design.

• Patented technology.

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Key Technical Differentiators

• Fewer failures compared to mud motors due to rapid wear (20–40%).

• Fewer failures compared to RSS systems due to RSS complexity (10–30%).

• Klin’s reliability reduces operating expenses.

• Improved wellbore geometry reduces directional drilling costs.

• Reliable operation with aggressive drilling fluids and at high temperatures.

• Lower repair and maintenance costs.

• Does not require highly specialized personnel.

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Market Opportunity

• The global directional drilling market is estimated to reach approximately USD 60 billion by 2032, with an annual growth rate of 6.3%.

• The global RSS market is estimated at approximately USD 5 billion in 2024 and is expected to reach USD 10 billion by 2032.

• Approximately 20,000 wells are drilled annually in North America, with about 90% being directional wells.

• Demand for directional drilling is increasing for shale, SAGD, and offshore projects.

• There is a shortage of RSS systems at an acceptable price point.

Target Customers:

• Oil & gas drilling contractors

• HDD contractors

• Service companies

• Rental companies

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Business Model

• Tool sales

• Tool rentals

• Maintenance and refurbishment services

• Long-term service contracts

• Licensing model

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Competitive Landscape

• Major players (SLB, Halliburton, Baker Hughes, Weatherford): very high cost

• Niche companies: limited capabilities

Our Position

• Competitive pricing combined with high reliability allows us to compete effectively across the market.

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Traction and Progress

• A scaled-down hydromechanical Klin model has been completed.

• A wooden model of the electromechanical Klin demonstrating its operation has been built.

• Preparation of drawings for a hydromechanical prototype for shop testing is nearing completion.

• A manufacturing shop is ready to build the prototype and conduct shop tests.

• Established connections with service companies where initial downhole testing will take place.

• Established connections with MWD companies.