APS TECHNOLOGY, INC. SIGNS JOINT PRODUCT DEVELOPMENT AGREEMENT WITH CHINA'S LARGEST OIL COMPANY

Two officers of APS Technology, Inc., headquartered in Cromwell, Connecticut, traveled to Dongying, China on November 29, 2006. APS Technology’s President William E. Turner and Vice President of Business Development Craig Brown, from the company’s Houston, Texas office, met with representatives of the Drilling Technology Research Institute of Shengli Petroleum Administrative Bureau (SDRI), a division of Sinopec, the largest oil company within China. The result was the signing of an agreement between the two companies for joint development of a Rotary Steerable Motor System (RSM).

The development work will be performed at APS’s facility in Cromwell, and the tools will be field tested in Eastern China. The Rotary Steerable Motor allows steering of the drill bit to specific geological targets as much as 25,000 feet below the surface. Steering is controlled autonomously with preprogrammed instructions which can be updated from the surface. This type of technology has been under development within the oil industry for several years, but the APS RSM will be the most powerful tool of its kind. In general, the technology will allow for quicker development of oil fields, which will result in greater availability of oil. APS developed this project with the support of a Small Business Innovation Research (SBIR) grant from the Department of Energy. In the United States, the RSM is distributed by BICO Drilling Tools of Houston.

APS Technology is a recognized leader in the development and production of electromechanical hardware and sensor technology used in harsh environments, particularly in the oil and gas industry. In describing the meeting, Mr. Turner said, “The signing of this development agreement was treated with great fanfare in China. A story on the agreement and another on the signing itself were both featured by the national news there. It is a terrific opportunity for APS and a great honor to work with a major oil company such as Sinopec.”