Koil Energy Solutions Inc. (KLNG): Below is my message to Steve and his rep...

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Friday, 03/06/2009 12:21:18 PM

Friday, March 06, 2009 12:21:18 PM

Below is my message to Steve and his reply. I dont know how to post the PDF's but I will post the pictures. Not exactly what I was looking for but more informitive than anything I have received before.

My message:

Steve,

It has been over a year since we received this PR:

Deep Down Ships Proteus Active Heave Compensation Unit

HOUSTON, Feb. 7 /PRNewswire-FirstCall/ -- Deep Down, Inc. (OTC Bulletin Board: DPDW) announced today that it has delivered a Proteus(TM) Active Heave Compensation Unit to Schlumberger for deployment in waters outside the Gulf of Mexico.

I was very excited about the Proteus and was expecting a large market for it. Was I wrong? Shareholders have not heard anything else about it. Was it a failure and did not work up to the standards advertised?

Thanks, xxxx

His reply:

xxxx:

No, the Proteus worked very well. We were charged to make an active heave compensator with a tolerance of about 6 inches in a 20 foot swell. However, we delivered a device that held the payload at depth to within 0.6 of an inch in 30 feet of swell.

It is important to remember that we are not a "widget manufacturer;" rather, we provide offshore services and innovate technological solutions to order for our clients in the offshore industry. We sell our expertise, and technological know-how. We don't have an inventory of products that sit on the shelves waiting to be bought, as in wholesale/retail operations. Rather, to understand our operations, one must understand the SERVICE role we play in the subsea and deepwater subsectors.

For instance, just as this AHC was successfully designed and manufactured for Schlumberger's specific application, most all of our technology is made to order as part of an overall service (solution). However, that doesn't diminish the utility of these products, or infer inferiority, it is the nature of our service business. As far as subsea technologies go, I believe that our subsea deployment baskets and bend stiffener latchers are sold in greater numbers; but, again, these technologies are part of an overall service solution that typically includes an installation component.

For example, last week, the largest X-hull currently in existence rolled into Galveston, and we were there to photograph it. On that vessel, is something most Deep Downer's have seen before. I thought I would share these with you. (Photos by Steve Jackson.) We have made several others, and they work great, as these photos show. However, our core business has always service.

So, to understand our opportunity, is to understand our market, and how we fit into it. We do not make trees, however, as most everything that we install and manufacture connects the platform or FPSO to the tree, healthy tree forecasts indicate the relative health of our subsector. Now, look at the PDF attachments. Look at the current tree award forecast. Now look at the current tree on-stream year forecast. What do you notice about the trend of subsea tree awards and on-stream tree forecasts?

Let me be succinct: our service work is not significantly influenced by the constantly fluctuating price of oil - Rather, is project based, tied to the current worldwide subsea installation backlog - and as the data show, our market is healthy.

This data was just released last week - it is very fresh, and Quest has a history of being very accurate and historically averages about +/- 4%. Mainly because these projects are already funded and going in regardless of what the current market conditions are.

Oil demand is growing 7% a year, and in spite of the current and fluctuating price of oil, our market is stable to slightly growing.

This is why I have been telling folks that in spite of the stock price, our company, and industry are in good conditions, it is up to us to capitalize on the opportunity. And, we are...

I believe our triple digit growth over the past two years bears out we have a sound strategy, and Quest's third-party data confirms why we are continuing to grow and get more business.

Please let me know how else I can help you with understanding DPDW.

We appreciate you support.
Regards,

Steven M. Haag M.Ed.
vice-president of investor relations
Deep Down, Inc. (OTCBB: DPDW)
ir@deepdowninc.com
8827 W. Sam Houston Pkwy N.
Suite 100
Houston, TX 77040

Office: 281-517-5000
Fax: 281-517-5001
These are simply my personal comments, and should not be relied upon in your investment decisions. I strongly urge you to conduct your own due diligence with regard to any investment in Deep Down, Inc. I respectfully refer you to Deep Down's filings with the United States Securities and Exchange Commission.