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Universal Compression Announces Agreement to Purchase KCI, Inc.

May, 29, 2001

HOUSTON, May 29 /PRNewswire/ -- Universal Compression Holdings, Inc. (NYSE: UCO), a leading provider of natural gas compression services, today announced that it has entered into a purchase agreement to acquire KCI, Inc., a fabricator of large horsepower natural gas compressors based in Tulsa, Oklahoma, for approximately $22.9 million in cash plus, at the Company's election, either up to 727,273 shares of Company common stock or an additional $18.8 million in cash, subject to adjustment. Concurrently with the acquisition, Universal will repay all of KCI's approximately $57 million in indebtedness.

KCI fabricates compressor units for sale to the natural gas pipeline market and other related markets. In addition, KCI has a domestic natural gas compressor rental fleet of approximately 125,000 aggregate horsepower with an average horsepower utilization of 85 percent.

"We are pleased about the acquisition of the well-regarded KCI operation with its experienced workforce and strong customer base. Completion of this acquisition will augment the Company's large horsepower expertise in both fabrication and operations and extend its capabilities into the pipeline compression segment of the market, which generally is characterized by the fabrication of larger horsepower units for sale to third parties and the subsequent sales of parts and services for these units," said Stephen A. Snider, President and Chief Executive Officer. "We believe that an ability to provide our customers both field and pipeline compression and services will give us an advantage over other compression companies that typically provide only one or the other," added Snider.

The KCI transaction, subject to various closing conditions including regulatory approvals, is expected to be closed by the end of June or in July 2001.

"Under current operating conditions and with anticipated synergies, the Company expects the acquisition to add revenue of approximately $100 million and EBITDA of approximately $14.5 million, and to be accretive to earnings per share by approximately $0.10, in the first full year of operations," said Snider.

Universal is headquartered in Houston, Texas and is the second largest natural gas compression services company in the world in terms of horsepower. The Company provides a full range of rental, sales, operations, maintenance and fabrication services and products to the domestic and international natural gas industry.

Statements about Universal's outlook and all other statements in this release other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside Universal's control, which could cause actual results to differ materially from such statements. While Universal believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are successful completion of the KCI acquisition, integration of KCI and recent acquisitions and the demand for Universal's products and services. These risk factors are discussed in Universal's filings with the Securities and Exchange Commission, copies of which are available to the public. Universal expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events, or otherwise.

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SOURCE Universal Compression Holdings, Inc.
CONTACT: David Oatman, Director, Investor Relations of Universal Compression Holdings, Inc., 713-335-7460, or General Inquiries, Jeffrey Wilhoit of The Financial Relations Board BSMG Worldwide, 312-640-6757

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