Koil Energy Solutions Inc. (KLNG)

[Jang-A-Lang]

Email from IR.


From:
Sent: Tuesday, April 01, 2008 12:06 PM
To: Steve Haag
Subject: RE: DPDW: E-mail Investor Inquiry


Mr. Haag:



Congratulations on a great year at Deep Down.



Please excuse my ignorance.



Can you go into detail on how this process works:



Installation Support and Management. Our installation management services are centered around the utilization of standardized hardware, proven, well-tested installation techniques, and an experienced, consistent team that has proven to be safe and skilled in all aspects of the installation process. We pride ourselves on supporting installation contractors through our installation management and engineering services, installation aids and equipment, and our offshore installation support services, including spooling operations, offshore testing, and flying lead installation support. Many installation contractors find it beneficial to utilize our services to help reduce on-board personnel since our specialized technicians can perform multiple tasks. We have designed and fabricated many different installation tools and equipment over the years. We have been involved in the design of the following pieces of equipment to help make installations run as smoothly as possible: steel flying leads, steel flying lead deployment systems, umbilical hardware and termination systems, umbilical bell mouths, lay chutes, rapid deployment cartridges, horizontal drive units, mud mats, flying lead installation and parking frames, umbilical termination assembly stab & hinge over systems, and numerous other pieces of offshore equipment. Our team has vast experience with the installation of flexible and rigid risers and flowlines, umbilicals, flexible and rigid jumpers, steel tube and thermoplastic hose flying leads, pipeline end terminations (“PLETs”) and manifolds.



I understand how beneficial this is to the contractors, but how about for Deep Down? Is this an actual revenue producing service?

Thanks for your time, and again Congrats on a successful year.

Steve's response:

Thanks! I'll pass your congratulations on to the management team.

This is a great question and one that is extremely important to understand. Deep Down is a service-minded company that develops technological solutions to help get done what its customers need. So, for example, the Moray(TM), which is at the terminal end of a steel flying lead and connects the J-plate to the wellhead, was developed by Ron Smith with certain ingenious enhancements to better address underwater installations with ROV's. These types of innovations then typically become products that are desirable to a wide range of customers with similar installation challenges.

So, to answer your question, YES! Not only does Deep Down make money with installation management and service, it is DDI's core business. Ron Smith's vision is to provide offshore E&P companies with senior-level experience and technological innovation to help them complete projects on-time, on-budget, and more safely.

Again, great question, and understanding this fact about Deep Down will help one understand that our service business drives our technological innovations.

Please let me know how else I can be of assistance.

Regards,



--Steve Haag

vice-president of investor relations



[e-mail]



Deep Down, Inc.

15473 East Freeway

Channelview (Houston), TX 77530



Office: 281.862.2201

Fax: [phone]



www.deepdowninc.com





--------------------------------------------------------------------------------