A BRIEF INTRODUCTION In 1992, the Guanghan Honghua Industrial Development Co. was established as a diversified economy enterprise under the Guanghan Drilling and Production Equipment Factory of SPA. Consisting of only 11 employees, their annual sales revenues were approximately 4 million Yuan (RMB) or $500K USD. After restructuring in 1998, a new name was introduced along with many new developments. Chuanyou Guanghan Honghua Co., Ltd, also shortened to Honghua, improved in research and development, design, manufacturing, production, marketing, management, service and therefore sales. Now offering the complete rig package and service all together, Honghua has progressed rapidly over the last 8 years becoming one of the top three drilling rig manufacturers in China. In 2002 and 2003, we were recognized as the new hi-tech firm of the Sichuan Province and the most advanced company in human resource development of the Sichuan Province, respectively. Honghua currently employs over 1150 people, with more than 260 as engineers and engineering technicians, and has a work area over 133,000 square meters, the largest drilling rig assembly and testing site in Asia. Their workshop is the top ranking machining and structure making workshop in all of China. Producing over 50 complete rig packages per year, sales exceed 752 million Yuan (RMB) or 94 million USD. HongHua has a young, talented, and enthusiastic engineering team led by Mr. Zhang Mi, the board chairman, general manager of the company, and a well-known expert of the drilling rig industry in China. The team specializes in applying various modern techniques with different types of drilling technology. This includes applying modern principles such as AC frequency conversion (VF), bus communication, and digital-control together with mechanical, electrical, hydraulic, or pneumatic techniques. The drilling rigs are designed with an advanced AutoCAD software optimizing the design, and not only conforming to the requirements of relevant API specifications and HSE, but also satisfying the user's special requests. The DBS series drilling rig developed by HongHua has full digital controls, establishing safety, high efficiency, high quality, low cost and optimal drilling. The ZJ40DBS and ZJ50DBS drilling rigs have successfully passed the national technical appraisal in July 2002 and November 2003 respectively, and obtained two patents in China. Based on the advantage of innovative technology and a highly competitive price, we have exported 5 packages of ZJ70DS DC desert rigs to Turkmenistan in 2003, and have been awarded the purchase contract for the export of 10 packages of ZJ50DBS rig to Uzbekistan. The DBS drilling rig was listed as the "2001 National Important Developing Project of Innovation of Technical Equipment" and the "2003 National Important New Product" in addition to being awarded the golden prize in the China Petroleum, Petrochemical, Engineering, Technology and Equipment Fair 2003. The DBS Digital-Controlled VFD Drilling Rig was listed as the "National Torch Program Project" in 2004, The "National Important Technology and Equipment Innovation Development and Technological Transformation Project". HongHua insists on globally optimized purchasing and fully takes advantage of the resources and experiences of other famous factories overseas and domestic. Realizing that predominance supplements each other, we have established a "dumbbell" type management mode for the drilling rig manufacturing obtaining the ISO 9001 certificate (DNV), and the license to use the monogram of API 4F, 7K, and 8A. We also accept the supervision from a third party and customer ensuring that every drilling rig conforms to quality. Guided by technology based on innovation for further development, HongHua has successfully built more than 170 complete drilling rigs for both Chinese and foreign customers, producing practical and economical results. Currently, our products include the series of mechanical, DC electric, AC VFD with digital controls, mechanical and electric compound drive drilling rigs with drilling depths from 1500m to 7000m (400HP-2600HP). Having been successful in many oilfields worldwide, such as China, Venezuela, Nigeria, Indonesia, Thailand, Pakistan, India, Kazakhstan, Turkmenistan, and Uzbekistan, our products have won a reputation of high quality and reliability. In 2005, drilling rigs made by HongHua were successfully introduced into the US and Russian markets. In the 21st century, HongHua will continue to satisfy the requirements of our customers with advanced technology, quality products, and considerable service. Our mission is the promotion of the continuous advancement of the petroleum and natural gas industry along with all of our valued customers.