1 Credit Suisse First Boston Energy Summit February 6 th, 2003

2 Certain matters discussed in this presentation are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of These forward-looking statements can generally be identified as such because of the context of the statement and may include words such as "believes," "anticipates," "expects," "estimates," or words of similar import. Similarly, statements that describe Hanover's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those anticipated as of the date of this presentation. These risks and uncertainties include: the loss of market share through competition; reduced profit margins resulting from increased pricing pressure in our business; the introduction of competing technologies by other companies; a prolonged, substantial reduction in oil and gas prices which could cause a decline in the demand for Hanover's compression and oil and gas production equipment; new governmental safety, health and environmental regulations which could require Hanover to make significant capital expenditures; inability to successfully integrate acquired businesses; currency fluctuations; changes in economic or political conditions in the countries in which Hanover operates; adverse results of regulatory inquiries or shareholder litigation; inability to comply with loan and lease covenants; inability to access capital markets; and legislative changes in the various countries in which Hanover does business. A discussion of these factors is included in the Company’s periodic reports filed with the Securities and Exchange Commission. The forward-looking statements included in this presentation are only made as of the date of this presentation, and Hanover undertakes no obligation to publicly update such forward- looking statements to reflect subsequent events or circumstances. Forward Looking Statements

3 Corporate Overview Market Capitalization (1/10/03):$ 723 MM Enterprise Value (1) $2,494 MM S&P/Moody’s ratings:BB/Ba2 LTM (2) 2002 Estimated Revenues:$1,096 MM LT (2) 2002 Estimated EBITDAR (Adj (3) ):$ 315 MM (1) Includes Synthetic Lease Financings (2) 12 months ended 9/30/02 (3) EBITDAR excludes unusual items including: Currency Translation, Write-offs, Severance, and FAS 142 Impairment LTM 2002 Revenue Mix Business Segment (2) LTM 2002 Revenue Mix By Geographic Region (2) Domestic 70% International 30% Comp. Fab 13% Other 2% Domestic Compression Rental 30% Parts & Service 24% Prod. Equip. Fab 14% International Compression Rental 17%

4 Hanover History  Dramatic Growth Since 1997 Fueled by Acquisitions and Management Focus on Top Line Growth  Positives of Growth  Market Leader in Outsourced Compression  Critical Mass for Global Solutions  Expanded Business Lines  Negatives of Growth  Growth Exceeded Infrastructure  Control Environment Strained  Increased Leverage  Lack of Consolidation of Acquired Company Operations  2002 Review  Restatements, SEC Inquiry, and Shareholder Lawsuits  Management and Organizational Changes  New Phase in Hanover History 38% CAGR Total Revenue ($ MM) Total Debt/Total Capitalization Latest 12 months ending 9/30/02 12 months ended 9/30/02

5 Hanover – The Future Integrate Hanover’s Systems and Operations Enabling the Company to Move Quickly to React to Our Customer's Needs – Both Domestically and Internationally Become the Solutions Provider for Our Customers Surface Production and Processing Needs Change Operations and Management Focus to Increased Capital Discipline and Improving Returns on Capital Employed Structure Organization Around Geographical Business Units Focus on Key Product Lines: –Services (Includes all Rental Income) –3 rd Party Parts and Services –Packaging (Compression, Processing, Power, etc.) –Alternative Fuels

Initiatives  Facility Consolidation and Headcount Reduction  500 employees worldwide  Consolidate facilities from 13 to 8 or 9  Estimated annualized savings of $20 MM  Oracle ERP Implementation  Consolidation of over 80 different accounting and reporting systems  18 – 24 month process, with estimated cost of $20 MM  Ultimately utilized for inventory tracking as well  Core Business Focus  Exit businesses that don’t fit long term strategic focus  Selectively Introduce Price Increases For Domestic Compression Rental Business  Improve Capital Structure

7 Strategic Plan Capital Structure and Financial Discipline Capital Discipline –Capital expenditures < operating cash flow –Return on capital focus vs revenue growth –Working capital reduction –Infrastructure improvement and development Reduce Leverage –Utilize asset sales proceeds and excess cash flow to reduce debt –Address SLB subordinated note through equity issuance and/or negotiation with SLB –Evaluate PIGAP II Joint Venture Put Option to SLB Improve Liquidity –Covenant relief under bank revolver and synthetic leases –Subordinated High Yield Issue to reduce revolver outstandings and senior debt

8 Strategic Plan Operations Geographical Business Unit Concept (GBU) –Primary P&L accountability –Decentralized responsibility –Recruit where we work World Class Manufacturing Capability –Improved efficiencies and reduced costs through consolidation of facilities –Geographically located for optimization –Operate as a cost center with centralized control Strengthen Engineering Base Expand Client Base –Protect Independent client base while expanding presence with Majors and NOC’s

9 Growth Opportunities  Demand for Natural Gas  Domestic Outsourcing  Large Scale International Projects  Total Solutions Focus

10 Rental Fleet Growth and Utilization * Through November 30, ,000 3,500 3,000 2,500 2,000 1,500 1, Horsepower – ( 000’s) 92.8% 91.7% 93.3% 92.6% 92.3% 90.8% 91.3% 91.8% 89.5%

11 Worldwide Operations

12 Total Solutions Capabilities

13 Global Market Share E&P Estimated Annual Capital Expenditures: –$115 billion per year –Exxon $9.9B, Shell $8B, ChvTex $7.5B, BP $7.5B, Woodside $2.4B –Does not include NOC’s: (Pemex, PDVSA, Sonotrac, Sonogal, ADNOC, etc) Compression Sales: –10% of global market Compression Rental Revenue: –15% of potential US market Standard Production Equipment –12% of US market Custom Production Equipment –4% of global market

14 Strategic Plan Summary North America rental fleet offers significant opportunities but not at today’s cost of capital and current pricing Production and processing have significant potential worldwide International revenue should surpass domestic revenue within 5 years Solutions concept adds value Expand client base Product innovation should be a key Hanover focus over the next five years Total Revenue

15 Financial Overview

16 Revenues (1) EBITDAR (1) Over 75% of EBITDA generated by outsourced compression services with strong recurring cash flow Segment Overview (1) Based on 12 months ended September 30,2002. Excludes equity in income of non-consolidated affiliates and other. In computing EBITDAR, SG&A expenses allocated to business segments in proportion to segment gross profit. Production Equipment Fabrication 14% Domestic U.S. Rentals 31% Parts and Service 25% Compressor Fabrication 13% Compressor Fabrication 4% Production Equipment Fabrication 5% Domestic U.S. Rentals 48% Parts and Service 14% International Rentals 17% International Rentals 29%

17 Rental Fleet Composition by Geographic Region 872 HP International 2,708 HP Domestic Total Horsepower (000’s) 3,580 HP International Horsepower (000’s) 872 HP Venezuela 41% Other 16% Mexico 11% Canada 11% Argentina 21% As of November 30, 2002

Financial Results 86 Convertible Preferred Securities (“TIDES”) 991 Common Equity 136Liquidity (4) 62%Total Debt/Total Capitalization (3) 1,718Total Debt (2) 18237Capital Expenditures (0.52)0.11EPS ($/share) – As Reported EPS ($/share) – Excluding Unusuals EBITDAR (1) Revenues 3Q 2002 ($MM) (1) 9 months ending Sept ($MM) (1) (1)EBITDAR and EPS exclude foreign currency transition adjustments, asset writedowns and goodwill impairment charges. (2)Total Debt includes off balance sheet synthetic lease financings (3)For purposes of the total debt/total capitalization ratio, the convertible preferred securities are treated as 70% equity, 30% debt. (4)Before covenant restrictions

19 Impact of Changes in Utilization EBITDA $2.5 MM per 1% Increase % Fleet Utilization $15 MM $0 Represents Annualized Impact

20 Impact of Changes in Pricing $/HP EBITDA $35 MM $15.00$13.50 $3.5 MM per $0.15/HP Increase $0 Represents Annualized Impact

21 Key Investment Considerations Total Solutions Provider Refocused Operating Model Strong Diversified Cash Flow Stream Significant Growth Opportunities Strengthened Management Team and Board Of Directors Focus On Reducing Leverage