Wachovia Securities Convertible Securities Conference March 5 th

Wachovia Securities Convertible Securities Conference March 5 th, 2003

Forward Looking Statements 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. 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. A discussion of these factors is included in the Company's periodic reports filed with the Securities and Exchange Commission.

Corporate Overview Market Capitalization (2/25/03): $ 632 MM Enterprise Value (2/25/03)(1) $2, 413 MM S&P/Moody’s ratings: BB-/Ba 3 2002 Revenues: $1, 029 MM 2002 Revenue Mix Business Segment 2002 Revenue Mix By Geographic Region Prod. Equip. Fab 15% Comp. Fab 11% Other 2% Parts & Service 22% (1) Includes Synthetic Lease Financings Domestic Compression Rental 32% Domestic 70% International 30% International Compression Rental 18% 3

Hanover History Total Revenue ($ MM) % 39 GR A C 1. Dramatic Growth Since 1997 Fueled by Acquisitions and Management Focus on Top Line Growth 2. Positives of Growth 1. Market Leader in Outsourced Compression 2. Critical Mass for Global Solutions 3. Expanded Business Lines • Negatives of Growth • 2002 Review Total Debt/Total Capitalization *As of 9/30/02 - Growth Exceeded Infrastructure Control Environment Strained Increased Leverage Lack of Consolidation of Acquired Company Operations - Restatements, SEC Inquiry, and Shareholder Lawsuits - Management and Organizational Changes - New Phase in Hanover History 4

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 5

2003 Initiatives • Facility Consolidation and Headcount Reduction - 500 employees worldwide, with facility consolidation from 13 to 8 or 9 - Anticipate completing process by the end of the third quarter - 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 - Domestic and major international locations anticipated to be integrated by year end 2003 • Core Business Focus - Plan to exit and sell California power generation, used equipment, and pump business that don’t fit long term strategic focus • Improve Operating Performance - Selectively introduce price increases for domestic compression rental business - Increase domestic fleet utilization § Retire obsolete units § Reduce capital available for new units - Increase activity in fabrication sales and parts & service • Improve Capital Structure 6

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 – Exercised PIGAP II Joint Venture Put Option to SLB • Put option discussions currently active with SLB • Improve Liquidity – Bank Amendment completed • 2003 Covenant relief under bank revolver and synthetic leases – Subordinated High Yield Issue to reduce revolver outstandings and senior debt 7

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 – Created Hanover Integrated Solutions Center • • Centralize in house technical talent Pursue highly specialized applications on a worldwide basis • Expand Client Base – Protect Independent client base while expanding presence with Majors and National Oil Companies 8

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

Horsepower – ( 000’s) Rental Fleet Growth 4, 000 3, 500 3, 000 2, 500 2, 000 1, 500 1, 000 500 10

Worldwide Operations 11

Total Solutions Capabilities 12

Global Market Share • E&P Estimated Annual Capital Expenditures: – $115 billion per year – Exxon $9. 9 B, Shell $8 B, Chv. Tex $7. 5 B, BP $7. 5 B, Woodside $2. 4 B – Does not include NOCs: (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

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 • Total Solutions concept adds value • Expand client base • Product innovation should be a key Hanover focus over the next Total Revenue Potential

Financial Overview 15

Financial Results ($ in millions) (1) 2002 financial results include $182. 7 million in pre-tax unusual charges (2) EBITDAR Includes $38 million of write-downs, severance expenses, and goodwill impairment 16

$131 $114 $44 $35 $15 Production Equipment Fabrication $184 Compressor Fabrication Revenue Parts & Service $270 International Rentals $224 Domestic U. S. Rentals $190 Production Equipment Fabrication Compressor Fabrication Parts & Service International Rentals Domestic U. S. Rentals Business Segment Overview ($ in millions) Gross Profit $329 $208 $175 $215 $132 $150 $85 $62 $36 $22 17

Compression Rental Fleet Composition by Geographic Region Total Horsepower (000’s) 3, 514 HP International Horsepower (000’s) 860 HP Other 15% 860 HP International Venezuela 41% Argentina 22% 2, 654 HP Domestic As of December 31, 2002 Mexico Canada 11% 18

Impact of Changes in Utilization $15 MM $2. 5 MM per 1% Increase A D IT B E $0 87 % Fleet Utilization Represents Annualized Impact 93 19

Impact of Changes in Pricing $35 MM $3. 5 MM per $0. 15/HP Increase A D IT B E $0 $13. 50 $/HP per month Represents Annualized Impact $15. 00 20

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 21