FROM THE DESK OF PAUL FRISON

Memo 
To:                  Board of Directors
Advisory Board of Directors
Cc:                Glenn Dubin, Massimo Marolo
From:             Paul Frison
Date:              July 25, 2001
Re:                Potential HTC Member Company
 
We are currently in the final review stage of a well-screened potential Member Company of HTC. To date they have satisfactorily met our criteria for being a Member Company, including making a presentation to HTC and a group of outside reviewers. 
Before advancing any company to Member status, however, it is our policy to contact our Board of Directors and our Advisory Board of Directors for one final screening.  Please take a moment to review the information below on the company's general business and principals involved.  If you have any information or reason to believe HTC should not advance the following company to Member status, please e-mail or call me immediately (within 2 business days).
 
Rotary Steerable Tools
Overview: 
Rotary Steerable Tools (RST) designs and manufactures patented, directional drilling tools that can replace traditional drilling technologies.  Rotary steerable drilling is a new technology that refines and improves the ability to drill the directional well; it is superior to steerable motor technology and could eventually achieve 90% replacement of this older technology.  Existingtechnologies are mechanically complex and capital intensive both to build and to maintain. RST's solution is simple, inexpensive and reliable.
 
Principals:
                          
Steve McLoughlin - B.A. in Law (Keele), diploma in Business Administration (Warwick) Co-founder and co-patent holder. Directional driller, MWD/LWD and surveyor. 20 years experience. Formerly employed by Smith International and Schlumberger.  
 
George Sutherland-Geology Degree (UT at Austin), MWD/LWD, 17 years relevant industry experience with Schlumberger.
 
JEFF LASATER - Aeronautical Engineering degree (Texas A & M), former chief design engineer of Space Industries International.
 
FEROZE VARIAVA- Special Honours Degree, (Sheffield), Directional driller, MWD/LWD, well-planner. 22 years industry experience with Schlumberger
 
Advisory Board Members:
 
THOMAS R. BATES Jr.-- Mr. Bates is former President of Schlumberger-Anadrill, Vice President of Sedco-Forex Schlumberger, President and CEO of Weatherford International, Senior Vice President of Baker Hughes. Mr. Bates brings extensive management skills and business experience to RST. He is Chairman of the Board for RST.
 
AHMED ALLOUACHE-- Mr. Allouache is a former CFO for Schlumberger, Europe Africa Middle East, and most recently CFO for Baker Hughes Inteq. Mr. Allouache brings extensive business experience to RST. He has expertise in international company structure, management accounting and international taxation issues. He currently serves on the Board and is CFO for RST.
                                       
DON GUNTHER-- Mr. Gunther is formerly Vice-Chairman of the Bechtel Corporation and President of Petroleum, Pipeline & Chemical Company. Mr. Gunther brings extensive global oil & gas industry experience to RST.
 
This "by-exception" report is very important to us. We will keep you informed of all new companies to be advanced to Member status.  Thank you for your cooperation.
 
Regards,
 
Paul M. Frison