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Business Observer Thursday, Jun. 25, 2009 12 years ago

Down Under

A startup company hopes to get a leg up in oil and gas exploration by riding its submarine. It's uncharted waters.

A startup company hopes to get a leg up in oil and gas exploration by riding its submarine. It's uncharted waters.

The Gulf Coast could become a player in oil and gas exploration if the founders of Sarasota-based Down, Deep & Up have their way.

Indeed, the company claims to have all the parts it needs to revolutionize the hybrid underwater boat market, with a product it calls the Sub-Cat. Those parts include an experienced management team, a solid business plan, an initial equity investment, a first order, proven technology and patent opportunities.

The Sub-Cat is a combination surface vessel and submarine. It operates on top of the water and then submerges when it reaches a destination.

Down, Deep & Up calls its vessel the Sub-Cat because the hybrid submersible looks and operates like a combination submarine and catamaran. Envision a large propane tank lying on its side, with windows, placed on top of a catamaran. Jonny Quest's father would be impressed.

“I saw a similar concept at another organization, but I knew I could make it more functional,” says David Smith, a DDU co-founder and a retired Air Force test pilot and defense analyst. “I contacted a few former colleagues and within months we started Down, Deep & Up, completed the engineering design and developed the software.”

The company first set out to sell the Sub-Cat as a tourist attraction to beach resorts and cruise ships, so individuals could take submarine rides. The vehicle's design allows it to be driven easily like a boat and then submerge down to 300 feet like a submarine.

Smith can also envision the company moving into paramilitary and yacht markets. The military could use the Sub-Cat for anti-pirate, security and clandestine operations and the ultra-rich might want to put a Sub-Cat on the back of their yachts for sneak-away excursions.

While Smith and his colleagues still plan to pursue those business lines, they have recently received some interest from the oil and gas exploration industry. That has become the company's main focus.

In fact, Houston-based Deep Down, Inc. — a similar company name but no relation to DDU — liked the product so much that it's now the largest equity investor in Down, Deep & Up. Smith says the two companies are in discussions to form a joint venture to manufacture and sell the Sub-Cat to companies in the oil & gas exploration industry. The Sub-Cat will be manufactured in the Sarasota-Bradenton area.

“The Sub-Cat's ability to move around the field [of work] at high speed and to submerge to perform the work of a full class sub is a huge achievement,” says Ron Smith, Deep Down's chief executive. “However, the unique feature of this product is the ability to submerge it, unmanned, below the wave action and then release a remotely operated vehicle from its aft deck.”

Ron Smith, who is not related to DDU's Dave Smith, says he hopes to ultimately own a fleet of Sub-Cats he could rent to the installers and contractors that troll the 20,000 miles of worldwide underwater pipelines.

The Sarasota-Bradenton area was chosen to be the corporate headquarters and manufacturing location of the Sub-Cat because DDU's chief engineer and technology officer, Julian Angus, lives here; Angus engineered the Sub-
Cat's “horizontal and vertical” capabilities.

Another reason the company moved here is to be near an area that is rich in boat manufacturing and assembly. Down, Deep & Up expects to manufacture specific aspects of the Sub-Cat itself and assemble the rest through outsourcing and subcontracting. The company plans to hire at least two engineers and five to six assemblers over the next few months.

Down, Deep & Up hopes to have the first Sub-Cat available for market within a year.

— Michael Corley

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