<PAGE> 1
UNIVERSAL COMPRESSION AND WEATHERFORD GLOBAL COMPRESSION SIGNED DEFINITIVE
MERGER AGREEMENT
HOUSTON, TX - October 24, 2000 -- Universal Compression Holdings, Inc.
(NYSE:UCO) today announced that it has signed a definitive agreement to acquire
Weatherford Global Compression Services (WGC), the gas compression business of
Weatherford International, Inc. (NYSE:WFT). Under terms of the agreement, a
subsidiary of Weatherford will merge with Universal Compression, Inc., the
operating subsidiary of Universal Compression Holdings. The consolidated entity
will have a total of 1.8 million horsepower and will be the second largest
natural gas compression services provider. The transaction combines Universal's
operating efficiency, experience and reputation for high quality and customer
service with WGC's quality equipment and operations as well as its higher
profile international operations.
Domestically, WGC will add approximately 754,000 horsepower to Universal's
814,000. Internationally, WGC's 180,000 horsepower and Universal's 60,000
horsepower will give the combined company a stronger presence in key
international markets.
Under the terms of the agreement, Universal will issue 13.75 million shares of
restricted common stock, which will represent approximately 48% of the
outstanding shares of the combined company, to Weatherford International and
assume WGC's current debt and operating leases which are currently approximately
$300 million. In addition, WGC's net working capital, estimated at $90 million,
will be transferred to Universal. Universal will add three board seats to be
filled by Weatherford representatives. As part of the transaction, Weatherford
will limit its voting rights to 33 1/3% of the voting power of the combined
company for up to two years.
The transaction is contingent on the refinancing of certain existing WGC and
Universal outstanding obligations, approval of Universal's shareholders and
applicable regulatory approvals. Shareholders of Universal representing
approximately 38% of currently outstanding shares have agreed to support the
transaction. A $25 average floor price of Universal common stock in the trading
period prior to closing has been established as a termination right for either
party.
Weatherford will retain approximately $40 million of WGC assets including its
recently acquired Singapore-based operations. Prior to the closing of the
transaction, Weatherford will acquire the interest of its minority partner in
WGC.
Universal's President and CEO Stephen Snider will continue in that role for the
combined company, which will retain the Universal Compression name.
Mr. Snider noted, "We expect to achieve annual operational savings and other
synergies of $20 million within nine months of completion of the merger.
Potential service and facility redundancies, especially in the domestic
operations, and corporate cost synergies will be the drivers of the expected
savings."
<PAGE> 2
The transaction will be accounted for using the purchase accounting method and
will be immediately accretive to earnings. Including the expected cost savings,
the merger will also be accretive to cash flow. Management expects to complete
the transaction during the first quarter of 2001 following satisfaction of
closing conditions.
"This merger will enhance Universal's already solid domestic market position and
give us substantial size in several high-growth, international markets," added
Snider. "We are particularly pleased to be gaining a foothold in the Canadian
market where WGC is a significant player. WGC's fabrication facility and
customer base will facilitate expansion in a large market where Universal
previously had little presence."
"WGC has earned a fine reputation within the gas compression industry. With the
two companies coming together and having the sole focus on gas compression, we
should be able to generate additional opportunities for the new organization,"
added Snider. "Both companies have experienced management that will help us to
develop and realize these opportunities."
At the end of September, horsepower utilization rate for Universal was
approximately 87%, while WGC was at 80%.
Universal will hold a conference call Thursday at 10:00 am EDT/ 7:00 a.m. PDT to
discuss the merger. Individuals can listen to the call live via Vcall at
http://www.vcall.com on the Web. Following the call, an archive of the briefing
will be available at the same Web address until November 2.
Universal expects to release second quarter results on November 7 prior to the
opening of the financial markets, followed later in the morning with a
conference call to discuss such release.
About Universal Compression
Universal ( www.universalcompression.com ) is headquartered in Houston, Texas
and is a leading natural gas compression service company providing a full range
of rental, sales, operations, maintenance and fabrication services and products
to the domestic and international natural gas industry.
About Weatherford
Houston-based Weatherford International, Inc. is one of the largest global
providers of innovative mechanical solutions, technology and services for the
drilling and production sectors of the oil and gas industry. Weatherford
operates in over 50 countries and employs approximately 10,000 people worldwide.
Forward Looking Statement and Investor Notice
This press release may contain forward-looking information (statements that are
not historical facts and that relate to future performance) that involves risks
and uncertainties. The forward-looking statements are made pursuant to the Safe
Harbor provisions of the Private Securities
<PAGE> 3
Litigation Reform Act of 1995. The statements in this press release regarding
the expected date of closing of the merger, future financial and operating
results, target growth rates, expected benefits and synergies of the merger, tax
and accounting treatment of the merger, future opportunities and any other
effect, result or aspect of the proposed transaction and any other future
statements, are forward-looking statements. Such statements involve risks and
uncertainties, including, but not limited to, costs and difficulties related to
the integration of acquired businesses, costs, delays, and any other
difficulties related to the merger, failure of the parties to satisfy closing
conditions, risks and effects of legal and administrative proceedings and
governmental regulations, future financial and operational results, competition,
general economic conditions, ability to manage and continue growth, risks of
international operations and other factors detailed in Universal Compression
Holdings' and Weatherford's Forms 10-K and other filings with the Securities and
Exchange Commission. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual outcomes
may vary materially from those indicated.
Universal plans to file with the SEC a proxy statement for shareholders of
Universal containing information about the merger. Shareholders of Universal are
urged to read the proxy statement when it becomes available, because it will
contain important information. In addition, investors should read the proxy
statement carefully before making any voting or investment decisions. Nothing
herein shall constitute an offer for sale of any securities.
