Press Release 19/8/04

Caledus Limited the Aberdeen headquartered oil and gas service sector business established in early 2003 today announced its first acquisition. Caledus has acquired from Hydril UK Limited the intellectual property and inventory of a previously acquired UK company Rototec Limited. Whilst the deal sum has not been disclosed by either party Caledus confirms that the inventory value alone is estimated by them at more than US$750,000.

Rototec developed and patented a range of drill-pipe deployed tools to reduce torque, drag and casing wear during drilling operations. The “RotoTEC Friction Reducer®” equipment has been used successfully in the most arduous wells on a Worldwide basis and Caledus intends to develop these markets further for the product-line. Caledus will retain the trademarked “RotoTEC®” brand name as it has good reputation with-in industry and many drilling engineers are familiar with it. Discussions have already taken place with numerous drilling engineers who are considering using the tools again now that they are to be supplied and supported by the Caledus team.

Caledus has already recruited one additional technical sales person and two technicians in advance of taking over the inventory to support the additional product-line. This brings staff levels to 12 in addition to supporting around 6 contractors. It has been necessary to commit to an additional storage and workshop facility of more than 3500 square feet. Caledus expects to increase staff numbers by around 6 people in the next 12 months, and is specifically recruiting experienced offshore down-hole tool supervisors, and additional technical sales personnel, as well as design engineers.

Jim Bain, Business Development Director said “The RotoTEC® product-line is a great deal for us, it is complimentary to our other products, yet stands alone which means we can export it on a standalone basis to some international markets. The technology is suitable for new and old wells, which makes it ideal for the North Sea. RotoTEC has a good track record and will benefit from a concerted technical sales effort. We expect revenues to be around £500,000 in the first 12 months, rising to more than a million pounds in the second year”

Caledus has recently moved to its new headquarters, 4 Rubislaw Terrace, which houses, sales, operations, engineering, finance and administration staff.