SciDev (SDV) – Permian Basin Technology Report

Subject: Field Trial Results, Product Technical Analysis, and Expansion Outlook

Date: December 23, 2025

1. Executive Summary: Trial Results & Commercial Status

The field trials referenced in the 1H FY25 presentation regarding the Permian Basin have successfully concluded. These trials were the catalyst for a major commercial conversion announced in July 2025.

• Trial Outcome: The proprietary chemistries (CatChek™ and XSlik™) outperformed competitor products, delivering a >10% increase in oil production.

• Commercial Result: The success led to a $10 million Master Services Agreement (MSA) with a blue-chip US Exploration & Production (E&P) company.

• Current Status: As confirmed in the November 2025 AGM, the company has "meaningfully re-entered the Permian Basin" and is actively delivering on this contract.

2. Product Technology: CatChek™ and XSlik™

The $10 million contract was secured based on the specific performance of two key technologies:

A. CatChek™ (Shale Stabilizer)

• Function: Unlike standard stabilizers that merely prevent clay from swelling (physical blocking), CatChek serves as a "Pyrite Passivator."

• The Problem: The Permian Basin is rich in Iron Pyrite ($FeS_2$). When drilling fluids touch pyrite, it oxidizes, creating iron sludge (which blocks oil flow) and sulfuric acid (which damages equipment).

• The Solution: CatChek creates a hydrophobic film on the pyrite crystals. This stops the oxidation reaction at the chemical level.

• Strategic Advantage: By preventing the reaction rather than just treating the symptoms, it keeps rock pores open, directly leading to the >10% production uplift reported.

B. XSlik™ (Friction Reducer)

• Function: A lubricant that allows fluids to be pumped at high pressure with less energy.

• The Advantage: It is engineered to remain stable in high-salinity brines. This allows operators to use 100% recycled wastewater instead of fresh water, a critical operational requirement in modern fracking.

3. Safety and ESG Profile

Both product lines are marketed as "Green Chemistry" solutions, offering significant safety and environmental advantages over traditional industrial chemicals.

• Toxicity: The products are non-toxic relative to industry standards.

  • Water Conservation: XSlik enables the use of recycled oilfield brine, significantly reducing the consumption of fresh aquifer water.

  • Chemical Load: By working effectively in "dirty" water, they reduce the need for additional toxic solvents often required to make competitor products work.

• Infrastructure Safety: CatChek acts as a corrosion inhibitor. By preventing the formation of sulfuric acid downhole, it protects the steel casing and cement integrity of the well, reducing the risk of leaks or structural failure.

4. Expansion Outlook: Target Markets

Following the validation in the Permian Basin, the technology is highly applicable to other US basins with similar geological challenges (high iron/pyrite content).

Primary Target: The Marcellus Shale (PA, WV, OH)

• Relevance: The Marcellus is the largest gas-producing basin in the US and is geologically known for very high pyrite content (often 5–10%).

• Opportunity: Operators here struggle with "Iron Sulfide" scaling. The success of CatChek in the Permian serves as a direct proof-of-concept for this region.

Secondary Targets:

• The Bakken Shale (ND): High-salinity environment where XSlik’s salt tolerance provides a cost advantage over fresh-water friction reducers.

• The Eagle Ford (TX): A mature basin where "sour" wells (caused by iron reactions) are common. The production enhancement capabilities of CatChek are highly valuable here for extending well life.

5. Next Reporting Milestones

Investors should monitor the following upcoming dates for evidence of revenue recognition from the $10M Permian contract:

• Late January 2026: Q2 FY26 Quarterly Activities Report (Cash receipts update).

• Late February 2026: 1H FY26 Half-Year Results (Audited Energy Services revenue).