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Credit Suisse First Boston Energy Summit

February 6th, 2003

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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 1995. 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

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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 MixBusiness Segment (2)

LTM 2002 Revenue MixBy 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%

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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

$199$286

$323

$560

$1,078 $1,096

1997 1998 1999 2000 2001 2002*

38% CAGR

Total Revenue ($ MM)

Total Debt/Total Capitalization

20%

51% 55% 57% 61% 62%

1997 1998 1999 2000 2001 2002*

Latest 12 months ending 9/30/02

12 months ended 9/30/02

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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)– 3rd Party Parts and Services– Packaging (Compression, Processing, Power, etc.)– Alternative Fuels

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2003 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

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Strategic PlanCapital 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

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Strategic PlanOperations

• 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

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Growth Opportunities

Demand for Natural Gas

Domestic Outsourcing

Large Scale International Projects

Total Solutions Focus

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1994 1995 1996 1997 1998 1999 2000 2001 2002*

Domestic International Utilization

Rental Fleet Growth and Utilization

* Through November 30, 2002

4,000

3,500

3,0002,500

2,000

1,500

1,000

500

Ho

rse

po

wer

– (

00

0’s

)

92.8% 91.7% 93.3%92.6% 92.3%

90.8%

91.3%

91.8% 89.5%

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Worldwide Operations

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Total Solutions Capabilities

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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

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Strategic PlanSummary

• 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

2003 2005 2007

Domestic International

Total Revenue

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Financial Overview

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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 Fabrication4%

Production Equipment Fabrication 5%

Domestic U.S. Rentals 48%

Parts and Service

14%

International Rentals 17% International

Rentals 29%

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Rental Fleet Composition by Geographic Region

872 HP

International

2,708 HPDomestic

Total Horsepower (000’s)3,580 HP

International Horsepower (000’s)872 HP

Venezuela

41%

Other 16%

Mexico

11%

Canada11%

Argentina21%

As of November 30, 2002

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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

0.320.11EPS ($/share) – Excluding Unusuals

23081 EBITDAR (1)

783255Revenues

3Q 2002($MM) (1)

9 months ending Sept. 2002

($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

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Impact of Changes in Utilization

EBITDA

87 93

$2.5 MM per 1% Increase

% Fleet Utilization

$15 MM

$0

Represents Annualized Impact

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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

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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