Hanover Compressor Announces Sale of Canadian Rental Assets and Ownership Interest in Collicutt

October 26, 2004

HOUSTON--(BUSINESS WIRE)--Oct. 26, 2004--Hanover Compressor Company (NYSE:HC), a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas processing and transportation applications, announced today that it has reached an agreement in principle to sell the compression rental assets of its Canadian subsidiary, Hanover Canada Corporation, to Universal Compression Canada, a subsidiary of Universal Compression Holdings, Inc., for approximately $57 million. This transaction, which has been approved by the Board of Directors of both Hanover and Universal Compression, is expected to be completed by November 1, 2004.

Additionally, Hanover has agreed to sell its ownership interest in Collicutt Energy Services Ltd.("CES") for approximately $2.6 million to an entity owned by Steven Collicutt. Hanover owns approximately 2.6 million shares in CES and this transaction is anticipated to close prior to year-end 2004.

"Canada has not been a targeted growth market for Hanover," stated John Jackson, President and Chief Executive Officer of Hanover. "With this sale, we will have the opportunity to accelerate our stated objectives for debt paydown and to reallocate resources and capital to markets where we see greater growth opportunity for the company."

About Hanover Compressor

Hanover Compressor Company (www.hanover-co.com) is a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees for both customer-owned equipment and its fleet of rental equipment. Founded in 1990 and a public company since 1997, Hanover's customers include both major and independent oil and gas producers and distributors as well as national oil and gas companies.

Certain matters discussed in this document are "forward-looking statements" intended to qualify for the safe harbors established by the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements can generally be identified as such because of the context of the statement or because the statement includes words such as "believes," "anticipates," "expects," "estimates," or words of similar import. Similarly, statements that describe Hanover's future plans, objectives or goals or future revenues or other financial measures are also forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated as of the date the statements were made. These risks and uncertainties include, but are not limited to: our inability to renew our short-term leases of equipment with our customers so as to fully recoup our cost of the equipment; prolonged substantial reduction in oil and gas prices, which could cause a decline in the demand for our compression and oil and natural gas production equipment; reduced profit margins or the loss of market share resulting from competition or the introduction of competing technologies by other companies; legislative changes or changes in economic or political conditions in the countries in which we do business; the inherent risks associated with our operations, such a equipment defects, malfunctions and failures and natural disasters; governmental safety, health, environmental and other regulations, which could require us to make significant expenditures; our inability to implement certain business objectives such as integrating acquired businesses, implementing our new enterprise resource planning systems, generating sufficient cash, accessing capital markets, refinancing existing or incurring additional indebtedness to fund our business, and executing our exit and sale strategy with respect to assets classified on our balance sheet as discontinued operations and held for sale; our inability to comply with covenants in our debt agreements and the decreased financial flexibility associated with our substantial debt. A discussion of these and other factors is included in the Company's periodic reports filed with the Securities and Exchange Commission.

    CONTACT: Hanover Compressor Company
             Lee Beckelman, 281-447-8787 (Investor Relations)

    SOURCE: Hanover Compressor Company