Hydrocarbon Dynamics Limited - June 2024 Quarterly Activities Report

Update on Ongoing Treatments Using HCD Products

In Australia, HCD received a repeat purchase order for approximately A$123,000 of HCD Multi-Flow for a seasonal paraffin control treatment in the Cooper Basin. This order was filled through existing inventory. The program performed well last winter, and the number of wells treated is expected to increase from 20 to 40 in the 2024 winter season.

In Alberta, Canada, ongoing business continues with 21 wells being treated using HCD Multi-Flow. The distributor plans to expand its use for paraffin control and evaluate it for heavy oil viscosity and diluent reduction opportunities, though progress remains slow.

In the Gulf of Mexico, the HCD Multi-Flow treatment on an offshore subsea pipeline is on hold due to annual line maintenance, expected to be completed by the end of August.

Update on Ongoing Trials Using HCD Products

The North Sea application has commenced after long delays. A large national oil company is using HCD Multi-Flow to address severe paraffin deposition issues. If successful, a second platform may follow. The purchase order was for approximately A$80,000.

In Dubai, a trial is underway with a new distributor, involving a purchase order of approximately A$130,000. The objective is to clean a pipeline containing organic deposits in preparation for running a smart pig, with results expected by mid-August.

In the USA, three small trials with potential new customers are ongoing, including a one-well paraffin control trial in the Delaware Basin of New Mexico, a one-well trial in Bakersfield, California, and another in North Dakota. No updates have been received since the March Quarterly Activities Report.

In South Sudan, a trial commenced in early March 2024 with no results communicated yet. The trial follows a payment of A$185,000 for HCD's new product, Bit-Flow D75, from a large operator majority-owned by Malaysia's state-owned energy company, Petronas.

Laboratory Testing Update

HCD received a Silver approval from the Centre for Environment, Fisheries, and Aquaculture Science (Cefas), replacing the six-month approval received in August 2023. This allowed the North Sea test to commence.

Exploration & Corporate Activities

HCD continues to assess exploration opportunities in the energy, resources, and technology sectors, including energy transition technologies. The company is also exploring financing options for its chemical business through joint ventures, private equity, and other avenues.

Finance

At the end of the quarter, HCD had $569,493 in cash reserves and no debt, plus $150,000 in receivables ($147,000 received in July 2024). Related party transactions during the quarter amounted to $73,806 in royalty payments. HCD renewed its 15% and 10% placement capacity at its AGM in May 2024.