10-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

(Amendment No. 1)

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended December 31, 2005

Or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          .

Commission file no. 1-13071

Hanover Compressor Company

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction of
Incorporation or Organization) 76-0625124

(I.R.S. Employer
Identification No.)

12001 North Houston Rosslyn, Houston, Texas 77086

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code:

(281) 447-8787

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange in Which Registered
Common Stock, $.001 par value 8.625% Senior Notes due 2010 9.0% Senior Notes due 2014	New York Stock Exchange New York Stock Exchange New York Stock Exchange

Securities registered pursuant to 12(g) of the Act:

Title of class: None

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

     Indicate by check if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o                     Accelerated filer þ                     Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     The aggregate market value of the Common Stock of the registrant held by non-affiliates as of June 30, 2005 was $636,366,000. For purposes of this disclosure, common stock held by persons who hold more than 5% of the outstanding voting shares and common stock held by executive officers and directors of the registrant have been excluded in that such persons may be deemed to be “affiliates” as that term is defined under the rules and regulations promulgated under the Securities Act of 1933. This determination of affiliate status is not necessarily a conclusive determination for other purposes. With respect to persons holding more that 5% of our outstanding voting shares and common stock, we have relied upon statements filed by such persons on or prior to June 30, 2005 pursuant to Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended.

     Number of shares of the Common Stock of the registrant outstanding as of May 31, 2006: 102,324,452 shares.

TABLE OF CONTENTS

Item 15. Exhibits, Financial Statement Schedule	3
Consent of PricewaterhouseCoopers LLP
Consent of Ernst & Young LLP
Consent of Ernst & Young LLP
Certificate of CEO Pursuant to Rule 13a-14a/15d-14a
Certificate of CFO Pursuant to Rule 13a-14a/15d-14a
Certificate of CEO Pursuant to Section 906
Certificate of CFO Pursuant to Section 906
Financial Statements - December 31, 2005
Financial Statements - December 31, 2005
Financial Statements - December 31, 2004
Financial Statements - December 31, 2004

2

EXPLANATORY NOTE

     This Amendment No. 1 on Form 10-K/A for the year ended December 31, 2005 of Hanover Compressor Company (“the Company”) is being filed for the purpose of providing exhibits 99.4 and 99.5, the audited financial statements of WilPro Energy Services (PIGAP II) Limited (“PIGAP II”) and WilPro Energy Services (El Furrial) Limited (“El Furrial”) for the year ended December 31, 2005, as required by Rule 3-09 of Regulation S-X. Otherwise, this amendment does not update or modify in any way the financial position, results of operations, cash flows or the disclosures in the Company’s annual report on Form 10-K for the year ended December 31, 2005, and does not reflect events occurring after the original filing date.

     The consent of PricewaterhouseCoopers LLP, our independent auditors, is filed as exhibit 23.2 attached hereto. The consents of Ernst & Young LLP, independent auditors for PIGAP II and El Furrial, are filed as exhibits 23.3 and 23.4 attached hereto.

Item 15. Exhibits, Financial Statement Schedule

     (a) The following documents are filed as part of this report or incorporated herein by reference:

1.	The consolidated financial statements of the Company listed on page 63 of our Form 10-K incorporated herein by reference.
2.	The financial schedule on page 9 of this report.
3.	The exhibits of the Company listed below.

     Exhibits

Exhibit
Number	Description
3.1	Certificate of Incorporation of the Hanover Compressor Holding Co., incorporated by reference to Exhibit 3.1 to Hanover Compressor Company’s (the “Company”) Current Report on Form 8-K filed with the SEC on February 5, 2001.
3.2	Certificate of Amendment of Certificate of Incorporation of Hanover Compressor Holding Co., dated December 8, 1999, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2001.
3.3	Certificate of Amendment of Certificate of Incorporation of Hanover Compressor Company, dated July 11, 2000, incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2001.
3.4	Amended and Restated Bylaws of the Company, dated March 10, 2004, incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.1	Third Amended and Restated Registration Rights Agreement, dated as of December 5, 1995, by and between the Company, GKH Partners, L.P., GKH Investments, L.P., Astra Resources, Inc. and other stockholders of the Company party thereto, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.
4.2	Form of Warrant Agreement, dated as of August 7, 1995, incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.
4.3	Specimen Stock Certificate, incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.
4.4	Form of Hanover Compressor Capital Trust 7¼% Convertible Preferred Securities, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement (File No. 333-30344) on Form S-3 as filed with the SEC on February 14, 2000.
4.5	Indenture for the Convertible Junior Subordinated Debentures due 2029, dated as of December 15, 1999, among the Company, as issuer, and Wilmington Trust Company, as trustee, incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement (File No. 333-30344) on Form S-3 filed with the SEC on February 14, 2000.
4.6	Form of Hanover Compressor Company Convertible Subordinated Junior Debentures due 2029, incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement (File No. 333-30344) on Form S-3 as filed with the SEC on February 14, 2000.
4.7	Indenture for the 4.75% Convertible Senior Notes due 2008, dated as of March 15, 2001, between the Company and Wilmington Trust Company, as trustee, incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.8	Form of 4.75% Convertible Senior Notes due 2008, incorporated by reference to Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.9	Indenture for the 8.50% Senior Secured Notes due 2008, dated as of August 30, 2001, among the

3

Exhibit
Number	Description
	2001A Trust, as issuer, Hanover Compression Limited Partnership and certain subsidiaries, as guarantors, and Wilmington Trust FSB, as Trustee, incorporated by reference to Exhibit 10.69 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
4.10	Form of 8.50% Senior Secured Notes due 2008, incorporated by reference to Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.11	Indenture for the 8.75% Senior Secured Notes due 2011, dated as of August 30, 2001, among the 2001B Trust, as issuer, Hanover Compression Limited Partnership and certain subsidiaries, as guarantors, and Wilmington Trust FSB, as Trustee, incorporated by reference to Exhibit 10.75 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
4.12	Form of 8.75% Senior Secured Notes due 2011, incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.13	Indenture for the Zero Coupon Subordinated Notes due March 31, 2007, dated as of May 14, 2003, between the Company and Wachovia Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement (File No. 333-106384) on Form S-3, as filed with the SEC on June 23, 2003.
4.14	Form of Zero Coupon Subordinated Notes due March 31, 2007, incorporated by reference to Exhibit 4.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.15	Senior Indenture, dated as of December 15, 2003, among the Company, Subsidiary Guarantors named therein and Wachovia Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A, as filed with the SEC on December 15, 2003.
4.16	First Supplemental Indenture to the Senior Indenture dated as of December 15, 2003, relating to the 8.625% Senior Notes due 2010, dated as of December 15, 2003, among Hanover Compressor Company, Hanover Compression Limited Partnership and Wachovia Bank, National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form 8-A, as filed with the SEC on December 15, 2003.
4.17	Form of 8.625% Senior Notes due 2010, incorporated by reference to Exhibit 4.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.18	Second Supplemental Indenture to the Senior Indenture dated as of December 15, 2003, relating to the 4.75% Convertible Senior Notes due 2014, dated as of December 15, 2003, between the Company and Wachovia Bank, National Association, as trustee, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K, as filed with the SEC on December 16, 2003.
4.19	Form of 4.75% Convertible Senior Notes due 2014, incorporated by reference to Exhibit 4.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
4.20	Third Supplemental Indenture to the Senior Indenture dated as of December 15, 2003, relating to the 9.0% Senior Notes due 2014, dated as of June 1, 2004, among Hanover Compressor Company, Hanover Compression Limited Partnership and Wachovia Bank, National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Registration Statement of Hanover Compressor Company and Hanover Compression Limited Partnership on Form 8-A under the Securities Act of 1934, as filed on June 2, 2004.
4.21	Form of 9% Senior Notes due 2014, incorporated by reference to Exhibit 4.3 to the Registration Statement of Hanover Compressor Company and Hanover Compression Limited Partnership on Form 8-A under the Securities Act of 1934, as filed on June 2, 2004.
10.1	Stipulation and Agreement of Settlement, dated as of October 23, 2003, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
10.2	PIGAP Settlement Agreement, dated as of May 14, 2003, by and among Schlumberger Technology Corporation, Schlumberger Oilfield Holdings Limited, Schlumberger Surenco S.A., the Company and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
10.3	Credit Agreement, dated as of November 21, 2005, among the Company, Hanover Compression Limited Partnership, The Royal Bank of Scotland plc as Syndication Agent, JPMorgan Chase Bank, N.A. as Administrative Agent, and the several lenders parties thereto.*
10.4	Guarantee and Collateral Agreement, dated as of November 21, 2005, among the Company, Hanover Compression Limited Partnership and certain of their subsidiaries in favor of JPMorgan Chase Bank, N.A. as Collateral Agent.*
10.5	Lease, dated as of August 31, 2001, between Hanover Equipment Trust 2001A (the “2001A Trust”) and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 10.64 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.6	Guarantee, dated as of August 31, 2001, made by the Company, Hanover Compression Limited

4

Exhibit
Number	Description
	Partnership, and certain subsidiaries, incorporated by reference to Exhibit 10.65 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.7	Participation Agreement, dated as of August 31, 2001, among Hanover Compression Limited Partnership, the 2001A Trust, and General Electric Capital Corporation, incorporated by reference to Exhibit 10.66 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.8	Security Agreement, dated as of August 31, 2001, made by the 2001A Trust in favor of Wilmington Trust FSB as collateral agent, incorporated by reference to Exhibit 10.67 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.9	Assignment of Leases, Rents and Guarantee from the 2001A Trust to Wilmington Trust FSB, dated as of August 31, 2001, incorporated by reference to Exhibit 10.68 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.10	Lease, dated as of August 31, 2001, between Hanover Equipment Trust 2001B (the “2001B Trust”) and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 10.70 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.11	Guarantee, dated as of August 31, 2001, made by the Company, Hanover Compression Limited Partnership, and certain subsidiaries, incorporated by reference to Exhibit 10.71 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.12	Participation Agreement, dated as of August 31, 2001, among Hanover Compression Limited Partnership, the 2001B Trust, and General Electric Capital Corporation, incorporated by reference to Exhibit 10.72 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.13	Security Agreement, dated as of August 31, 2001, made by the 2001B Trust in favor of Wilmington Trust FSB as collateral agent, incorporated by reference to Exhibit 10.73 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.14	Assignment of Leases, Rents and Guarantee from the 2001B Trust to Wilmington Trust FSB, dated as of August 31, 2001, incorporated by reference to Exhibit 10.74 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
10.15	Amended and Restated Declaration of Trust of Hanover Compressor Capital Trust, dated as of December 15, 1999, among the Company, as sponsor, Wilmington Trust Company, as property trustee, and Richard S. Meller, William S. Goldberg and Curtis A. Bedrich, as administrative trustees, incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement (File No. 333-30344) on Form S-3 filed with the SEC on February 14, 2000.
10.16	Preferred Securities Guarantee Agreement, dated as of December 15, 1999, between the Company, as guarantor, and Wilmington Trust Company, as guarantee trustee, incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement (File No. 333-30344) on Form S-3 as filed with the SEC on February 14, 2000.
10.17	Common Securities Guarantee Agreement, dated as of December 15, 1999, by the Company, as guarantor, for the benefit of the holders of common securities of Hanover Compressor Capital Trust, incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement (File No. 333-30344) on Form S-3 as filed with the SEC on February 14, 2000.
10.18	Purchase Agreement, dated June 28, 2001, among Schlumberger Technology Corporation, Schlumberger Oilfield Holdings Ltd., Schlumberger Surenco S.A., Camco International Inc., the Company and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 10.63 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
10.19	Schedule 1.2(c) to Purchase Agreement, dated June 28, 2001, among Schlumberger Technology Corporation, Schlumberger Oilfield Holdings Limited, Schlumberger Surenco S.A., Camco International Inc., the Company and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 6, 2003.
10.20	Amendment No. 1, dated as of August 31, 2001, to Purchase Agreement among Schlumberger Technology Corporation, Schlumberger Oilfield Holdings Ltd., Schlumberger Surenco S.A., Camco International Inc., the Company and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 14, 2001.
10.21	Amendment No. 2, dated as of July 8, 2005 to Purchase Agreement by and among the Company, Hanover Compression Limited Partnership and Schlumberger Technology Corporation, for itself and as successor in interest to Camco International Inc., Schlumberger Surenco S.A. and Schlumberger Oilfield Holdings Ltd., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2005.

5

Exhibit
Number	Description
10.22	Most Favored Supplier and Alliance Agreement, dated August 31, 2001, among Schlumberger Oilfield Holdings Limited, Schlumberger Technology Corporation and Hanover Compression Limited Partnership, incorporated by reference to Exhibit 99.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 14, 2001.
10.23	Agreement by and among SJMB, L.P., Charles Underbrink, John L. Thompson, Belleli Energy S.r.l. and Hanover Compressor Company and certain of its subsidiaries dated September 20, 2002, incorporated by reference to Exhibit 10.62 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.
10.24	Hanover Compressor Company Stock Compensation Plan, incorporated by reference to Exhibit 10.63 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.††
10.25	Hanover Compressor Company Senior Executive Stock Option Plan, incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.26	Hanover Compressor Company 1993 Management Stock Option Plan, incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.27	Hanover Compressor Company Incentive Option Plan, incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.
10.28	Amendment and Restatement of the Hanover Compressor Company Incentive Option Plan, incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.29	Hanover Compressor Company 1995 Employee Stock Option Plan, incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.30	Hanover Compressor Company 1995 Management Stock Option Plan, incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.31	Form of Stock Option Agreement for DeVille and Mcneil, incorporated by reference to Exhibit 10.70 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.
10.32	Form of Stock Option Agreements for Wind Bros, incorporated by reference to Exhibit 10.71 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.
10.33	Hanover Compressor Company 1996 Employee Stock Option Plan, incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.34	Hanover Compressor Company 1997 Stock Option Plan, as amended, incorporated by reference to Exhibit 10.23 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.35	1997 Stock Purchase Plan, incorporated by reference to Exhibit 10.24 to the Company’s Registration Statement (File No. 333-24953) on Form S-1, as amended.††
10.36	Hanover Compressor Company 1998 Stock Option Plan, incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
10.37	First Amendment to the Hanover Compressor Company 1998 Stock Option Plan, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2005.††
10.38	Hanover Compressor Company December 9, 1998 Stock Option Plan, incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998.††
10.39	Hanover Compressor Company 1999 Stock Option Plan, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement (File No. 333-32092) on Form S-8 filed with the SEC on March 10, 2000.††
10.40	First Amendment to the Hanover Compressor Company 1999 Stock Option Plan, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2005.††
10.41	Hanover Compressor Company 2001 Equity Incentive Plan, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement (File No. 333-73904) on Form S-8 filed with the SEC on November 21, 2001.††
10.42	First Amendment to the Hanover Compressor Company 2001 Equity Incentive Plan, incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2005.††

6

Exhibit
Number	Description
10.43	Hanover Compressor Company 2003 Stock Incentive Plan, incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A, as filed with the SEC on April 15, 2003.††
10.44	First Amendment to the Hanover Compressor Company 2003 Stock Incentive Plan, incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on July 13, 2005.††
10.45	Employment Letter with Peter Schreck, dated August 22, 2000, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003.††
10.46	Employment Letter with Stephen York, dated March 6, 2002, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003.††
10.47	Promissory Note and Indenture dated April 21, 2004 relating to $6,650,000 payable to Milberg, Weiss, Bershad, Hynes & Lerach LLP as Escrow Agent with respect to the settlement fund as defined in that certain Stipulation and Agreement and Settlement dated as of October 23, 2003, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.
10.48	Employment Letter with Gary M. Wilson dated April 9, 2004, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004.††
10.49	Employment Letter with John E. Jackson dated October 5, 2004, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on October 6, 2004.††
10.50	Change of Control and Severance Agreement dated July 29, 2005 between John E. Jackson and the Company, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005.††
10.51	Employment Letter with Lee E. Beckelman dated January 31, 2005, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on February 1, 2005.††
10.52	Employment Letter with Anita H. Colglazier dated April 4, 2002 with explanatory note. ††
10.53	Letter to Brian Matusek regarding employment terms, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2005. ††
10.54	Employment Letter with Norrie Mckay effective as of May 16, 2005, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.††
10.55	Form of Change of Control Agreement dated July 29, 2005 between the Company and each of Messrs. Lee E. Beckelman, Brian A. Matusek, Gary M. Wilson, Steven W. Muck, Norman A. Mckay, Stephen P. York and Peter G. Schreck and Ms. Anita H. Colglazier, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q For the quarter ended June 30, 2005.††
12.1	Computation of ratio of earnings to fixed charges.*
14.1	P.R.I.D.E. in Performance — Hanover’s Guide to Ethical Business Conduct (the “Code of Ethics”), incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
14.2	Amendment to the Code of Ethics, incorporated by reference to Exhibit 14.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on January 20, 2005.
21.1	List of Subsidiaries.*
23.1	Consent of PricewaterhouseCoopers LLP.*
23.2	Consent of Pricewaterhouse Cooper LLP.**
23.3	Consent of Ernst & Young LLP.**
23.4	Consent of Ernst & Young LLP.**
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.**
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.**
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
99.1	Letter from GKH partners regarding wind-up of GKH Investments, L.P. and GKH Private Limited, dated October 15, 2001, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 18, 2001.
99.2	Letter from GKH Partners, L.P. to Mark S. Berg, Senior Vice President and General Counsel of the Company, dated November 12, 2002, incorporated by reference to Exhibit 99.1 to the Company’s

7

Exhibit
Number	Description
	Current Report on Form 8-K filed with the SEC on November 15, 2002.
99.3	Letter from GKH Partners, L.P. to Mark S. Berg, Senior Vice President and General Counsel of the Company, dated March 11, 2004, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2004.
99.4	Financial Statements of WilPro Energy Services (PIGAP II) Limited for the fiscal year ended December 31, 2005.**
99.5	Financial Statements of WilPro Energy Services (El Furrial) Limited for the fiscal year ended December 31, 2005.**
99.6	Financial Statements of WilPro Energy Services (PIGAP II) Limited for the fiscal year ended December 31, 2004.**
99.7	Financial Statements of WilPro Energy Services (El Furrial) Limited for the fiscal year ended December 31, 2004.**

*	Filed on March 1, 2006 as an exhibit to the Registrant’s Annual Report on From 10-K for the fiscal year ended December 31, 2005.
**	Filed herewith
††	Management contract or compensatory plan or arrangement

8

SCHEDULE II

HANOVER COMPRESSOR COMPANY
VALUATION AND QUALIFYING ACCOUNTS

			Additions
	Balance at		Charged to					Balance at
	Beginning		Costs and					End of
Description	of Period		Expenses		Deductions			Period
			(In thousands)
Allowance for doubtful accounts deducted from accounts receivable in the balance sheet
2005	$	7,573	$	1,955	$	4,777	(1)	$	4,751
2004		5,460		2,658		545	(1)		7,573
2003		5,162		4,028		3,730	(1)		5,460
Allowance for obsolete and slow moving inventory deducted from inventories in the balance sheet
2005	$	11,699	$	148	$	50	(2)	$	11,797
2004		12,729		1,062		2,092	(2)		11,699
2003		14,211		1,536		3,018	(2)		12,729
Allowance for deferred tax assets not expected to be realized
2005	$	65,441	$	13,015	$	3,036	(3)	$	75,420
2004		55,015		23,429		13,003	(3)		65,441
2003		23,371		46,824		15,180	(3)		55,015
Allowance for employee loans
2003	$	6,021	$	—	$	6,021	(4)	$	—

(1)	Uncollectible accounts written off, net of recoveries.
(2)	Obsolete inventory written off at cost, net of value received.
(3)	Reflects utilization of tax assets that previously had a valuation allowance.
(4)	During 2003, the notes receivable for loans to employees who were not executive officers were forgiven.

9

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Hanover Compressor Company
	By: /s/ John E. Jackson
	John E. Jackson
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: June 12, 2006

10

Exhibit Index

Exhibit
Number	Description
23.2	Consent of PricewaterhouseCoopers LLP.
23.3	Consent of Ernst & Young LLP.
23.4	Consent of Ernst & Young LLP.
31.1	Certificate of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certificate of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certificate of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certificate of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.4	Financial Statements of WilPro Energy Services (PIGAP II) Limited for the fiscal year ended December 31, 2005.
99.5	Financial Statements of WilPro Energy Services (El Furrial) Limited for the fiscal year ended December 31, 2005.
99.6	Financial Statements of WilPro Energy Services (PIGAP II) Limited for the fiscal year ended December 31, 2004.
99.7	Financial Statements of WilPro Energy Services (El Furrial) Limited for the fiscal year ended December 31, 2004.

11

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-125862, 333-107659, 333-73904, 333-55978, 333-53446, 333-32096, 333-32092 and 333-65923) and Form S-3 (No. 333-132672) of Hanover Compressor Company of our report dated February 28, 2006 relating to the financial statements, financial statement schedule, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which is incorporated by reference in this Form 10-K/A (Amendment No. 1).

/s/ PricewaterhouseCoopers LLP
Houston, Texas
June 12, 2006

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-125862, 333-107659, 333-73904,
333-55978, 333-53446, 333-32096 and 333-32092) and Form S-3 (No. 333-65923) of Hanover Compressor Company of our reports dated April 24, 2006 and April 22, 2005, with respect to the financial statements of Wilpro Energy Services (El Furrial) Limited, included in this Annual Report (Form 10-K/A) for the year ended December 31, 2005.

/s/ Ernst & Young LLP
Tulsa, Oklahoma

June 7, 2006

EX-23.4

Exhibit 23.4

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-125862, 333-107659, 333-73904,
333-55978, 333-53446, 333-32096 and 333-32092) and Form S-3 (No. 333-65923) of Hanover Compressor Company of our reports dated April 24, 2006 and April 22, 2005, with respect to the financial statements of Wilpro Energy Services (PIGAP II) Limited, included in this Annual Report (Form 10-K/A) for the year ended December 31, 2005.

/s/ Ernst & Young LLP
Tulsa, Oklahoma

June 7, 2006

EX-31.1

EXHIBIT 31.1

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John E. Jackson, certify that:

1. I have reviewed this Annual Report on Form 10-K/A of Hanover Compressor Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 12, 2006

By:	/s/ JOHN E. JACKSON
	Name:	John E. Jackson
	Title:	Chief Executive Officer and President
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lee E. Beckelman, certify that:

1. I have reviewed this Annual Report on Form 10-K/A of Hanover Compressor Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 12, 2006

By:	/s/ LEE E. BECKELMAN
	Name:	Lee E. Beckelman
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CEO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K/A of Hanover Compressor Company (the “Company”) for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John E. Jackson, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JOHN E. JACKSON

Name: John E. Jackson

Title: Chief Executive Officer

Date: June 12, 2006

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K/A of Hanover Compressor Company (the “Company”) for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Lee E. Beckelman, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LEE E. BECKELMAN
Name:	Lee E. Beckelman
Title:	Chief Financial Officer

Date: June 12, 2006

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.4

Exhibit 99.4

Financial Statements
WilPro Energy Services (PIGAP II) Limited
Years ended December 31, 2005 and 2004

WilPro Energy Services (PIGAP II) Limited

Financial Statements

Years ended December 31, 2005 and 2004

Contents

Report of Independent Auditors	1
Audited Financial Statements
Balance Sheets	2
Statements of Income and Comprehensive Income	3
Statements of Shareholders’ Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

Report of Independent Auditors

To the Shareholders and Board of Directors
WilPro Energy Services (PIGAP II) Limited

We have audited the accompanying balance sheets of WilPro Energy Services (PIGAP II) Limited as of December 31, 2005 and 2004, and the related statements of income and comprehensive income, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WilPro Energy Services (PIGAP II) Limited at December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Tulsa, Oklahoma
April 24, 2006

1

WilPro Energy Services (PIGAP II) Limited
Balance Sheets

	December 31
	2005			2004
Assets
Current assets:
Cash and cash equivalents	$	143,547		$	94,557
Restricted cash and cash equivalents		41,906,949			48,651,973
Accounts receivable:
Trade – PDVSA Petroleo, S.A.		14,700,382			15,380,796
Other		154,290			883,571
Prepaid taxes		1,790,322			1,974,322
Prepaid expenses		2,479,277			1,158,204
Total current assets		61,174,767			68,143,423
Restricted cash and cash equivalents		20,144,541			18,766,602
Property, plant and equipment, net		249,696,527			264,815,191
Deferred financing costs		23,743,447			25,952,140
Derivative asset		808,870			1,244,132
Other assets		309,706			339,711
Total assets	$	355,877,858		$	379,261,199
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable:
Trade	$	2,296,920		$	1,420,924
Affiliates		372,438			365,281
Other		235,927			338,229
Value-added tax payable		938,299			1,927,279
Accrued liabilities		525,678			534,983
Notes payable due within one year		22,310,000			22,310,000
Accrued interest		3,149,564			2,981,642
Deferred revenue		521,519			521,519
Total current liabilities		30,350,345			30,399,857
Notes payable		163,070,000			185,380,000
Deferred revenue		8,213,924			8,735,443
Deferred foreign income tax		21,066,346			15,385,000
Shareholders’ equity:
Common stock, class A, $1 par value, 35,000 shares authorized, 70 shares issued and outstanding		70			70
Common stock, class B, $1 par value, 15,000 shares authorized, 30 shares issued and outstanding		30			30
Additional paid-in capital		101,914,330			101,914,330
Retained earnings		32,892,729			38,803,342
Accumulated other comprehensive loss – net loss on cash flow hedge instruments		(1,629,916	)		(1,356,873	)
Total shareholders’ equity		133,177,243			139,360,899
Total liabilities and shareholders’ equity	$	355,877,858		$	379,261,199

See accompanying notes.

2

WilPro Energy Services (PIGAP II) Limited

Statements of Income and Comprehensive Income

	Years ended December 31,
	2005			2004
Revenues	$	91,626,354		$	85,767,089
Operating expenses		16,499,721			12,824,040
Depreciation		15,966,865			15,995,101
General and administrative expenses		6,884,328			7,001,345
Total costs and expenses		39,350,914			35,820,486
Operating income		52,275,440			49,946,603
Other income (expense):
Interest expense		(12,894,488	)		(12,281,461	)
Foreign currency transaction loss		(915,059	)		(854,915	)
Other income, net		945,494			465,493
		(12,864,053	)		(12,670,883	)
Income before foreign income tax		39,411,387			37,275,720
Provision for deferred foreign income tax		5,822,000			6,523,000
Net income		33,589,387			30,752,720
Other comprehensive loss – unrealized loss on cash flow hedging (net of income tax benefit of $141,000 in 2005 and $510,000 in 2004)		(273,043	)		(990,644	)
Comprehensive income	$	33,316,344		$	29,762,076

See accompanying notes.

3

WilPro Energy Services (PIGAP II) Limited

Statements of Shareholders’ Equity

										Accumulated
					Additional					Other
	Common Stock				Paid-In		Retained			Comprehensive
	Class A		Class B		Capital		Earnings			Loss			Total
Balance, December 31, 2003	$	70	$	30	$	101,914,330	$	8,050,622		$	(366,229	)	$	109,598,823
Net income		—		—		—		30,752,720			—			30,752,720
Other comprehensive loss		—		—		—		—			(990,644	)		(990,644	)
Balance, December 31, 2004		70		30		101,914,330		38,803,342			(1,356,873	)		139,360,899
Net income		—		—		—		33,589,387			—			33,589,387
Other comprehensive loss		—		—		—		—			(273,043	)		(273,043	)
Dividends paid		—		—		—		(39,500,000	)		—			(39,500,000	)
Balance, December 31, 2005	$	70	$	30	$	101,914,330	$	32,892,729		$	(1,629,916	)	$	133,177,243

See accompanying notes.

4

WilPro Energy Services (PIGAP II) Limited

Statements of Cash Flows

	Years ended December 31,
	2005			2004
Operating activities
Net income	$	33,589,387		$	30,752,720
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		15,966,865			15,995,101
Amortization of deferred costs		2,208,693			2,212,347
Deferred foreign income tax expense		5,822,003			6,523,332
Changes in operating assets and liabilities:
Accounts receivable		1,409,695			(7,098,318	)
Value-added tax payable		(988,980	)		1,158,655
Foreign taxes payable		—			(529,805	)
Prepaid expenses		(1,321,073	)		(158,806	)
Prepaid taxes		184,000			395,537
Other non-current assets		30,005			(339,711	)
Accrued liabilities		(9,305	)		(554,736	)
Accounts payable		773,694			(2,754,574	)
Receivable/payable with affiliates		7,157			(4,556,271	)
Deferred revenue		(521,519	)		(521,519	)
Interest payable		167,922			815,254
Other		21,562			—
Net cash provided by operating activities		57,340,106			41,339,206
Investing activities
Purchases of property, plant and equipment		(848,201	)		(173,287	)
Net cash used in investing activities		(848,201	)		(173,287	)
Financing activities
Payments of notes payable		(22,310,000	)		(22,310,000	)
Dividends paid		(39,500,000	)		—
Additions to deferred financing costs		—			(190,041	)
Changes in restricted cash and cash equivalents		5,367,085			(18,698,887	)
Net cash used in financing activities		(56,442,915	)		(41,198,928	)
Net increase (decrease) in cash and cash equivalents		48,990			(33,009	)
Cash and cash equivalents, beginning of year		94,557			127,566
Cash and cash equivalents, end of year	$	143,547		$	94,557
Supplemental Disclosures of Cash Flow Information
Foreign income taxes paid	$	1,916,418		$	1,532,899
Interest paid	$	10,496,312		$	9,253,859

See accompanying notes.

5

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements

December 31, 2005 and 2004

1. Organization and Description of Business

WilPro Energy Services (PIGAP II) Limited (the Company) was incorporated in the Cayman Islands in July 1998. The Company provides installation, engineering, procurement and construction services, as well as operation and maintenance services for natural gas compression facilities at the Santa Bárbara/Pirital oil field property of PDVSA Petróleo, S.A. (PDVSA) in Venezuela. Williams International PIGAP Limited, a subsidiary of Williams International Company, owns all 70 outstanding Class A common shares, and Hanover Cayman Limited (a wholly owned subsidiary of Hanover Compression Limited Partnership), owns all 30 Class B common shares of the Company.

The Company has entered into a services contract with PDVSA. Under the terms of this contract, the Company designed and built a high-pressure plant, which was completed in August 2001, and renders natural gas compression services on behalf of PDVSA at the Company’s own expense and risk. The contract has an initial term of 20 years. After this term, PDVSA is under no obligation to receive these services. The services rendered by the Company generate a service fee from PDVSA, which is the primary source of revenue for the Company. The Company does not require collateral for credit extended to PDVSA. At the end of the contract, PDVSA has the option to 1) renew the current service agreement, allowing the Company to retain ownership of the assets, 2) purchase the PIGAP II assets at book value, which is expected to be an insignificant amount, and either retain the Company under an operations and management agreement or terminate its relationship with the Company, or 3) require the Company to dismantle the assets and restore the land to its original condition.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in those financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

6

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents include demand and time deposits, certificates of deposit and other marketable securities with maturities of three months or less when acquired.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents within current assets consists primarily of bank accounts restricted under the Company’s loan agreement with Overseas Private Investment Corporation (OPIC), ABN AMRO Bank N.V., and Istituto per i Servizi Assicurativi del Commercio Estero (SACE) (see Note 6) for receipt of revenue, payment of operating and maintenance expenses, distributions to shareholders and funding for the next semi-annual debt principal and interest payment. Restricted cash and cash equivalents within noncurrent assets consists primarily of bank accounts restricted under the loan agreement with OPIC and SACE for six months of principal and interest payments and an uninsured loss reserve. The Company does not expect these cash and cash equivalents to be released within the next twelve months.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. No allowance for doubtful accounts is recognized at the time the revenue, which generates the accounts receivable, is recognized. An allowance for doubtful accounts is not common for the Company as it only has one customer. However, management assesses the collectibility of accounts receivable based on existing economic conditions and contractual terms with its client. Receivables are considered past due if payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted.

Derivative instruments

During 2003, the Company entered into an interest rate cap agreement to hedge the interest rate risk associated with its loan agreement. This derivative instrument protects against increases in the LIBOR interest rates above 5.85 percent. This derivative is reflected on the balance sheet at fair value and has been designated in a cash flow hedging relationship. The effective portion of the change in fair value is reported in other comprehensive income and reclassified into earnings in the period in which the hedged

7

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

item affects earnings. To match the underlying transaction being hedged, derivative gains or losses reclassified into earnings are recognized in interest expense. The hedging relationship is regularly evaluated to determine whether it is expected to be, and has been a highly effective hedge. Forecasted transactions designated as the hedged item are regularly evaluated to assess whether they continue to be probable of occurring. During 2005, there are no amounts excluded from the effectiveness calculation and no hedge ineffectiveness. As of December 31, 2005, the Company has hedged future cash flows associated with interest payments for 10 years, and, based on recorded values at December 31, 2005, no significant gains or losses are expected to be reclassified into earnings within the next year.

Property, Plant and Equipment

Property, plant and equipment is recorded at historical cost. The carrying value of these assets is based on estimates, assumptions and judgments relative to capitalized costs, useful lives and salvage values. Improvements increasing functionality or useful lives are added to the cost of the corresponding assets, while the cost of repairs and maintenance are charged to expense as incurred. All spare parts inventory items in excess of $2,500 are capitalized and recorded at historical cost and expensed upon usage. Depreciation is recorded using the straight-line method over estimated useful lives. An estimated useful life of 20 years is used for natural gas compression plant facilities and an estimated useful life of 5 years is used for all other property, plant and equipment.

Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Company has not recorded an asset retirement obligation based on a 100% probability assessment that PDVSA, under the contract terms, will obtain the Pigap II facility and assume all retirement obligations at the end of the contract term.

8

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Revenue Recognition Policy

The Company recognizes revenue for services in the period they are performed. On December 27, 2002, the Company received $10.3 million from PDVSA for achieving specified production levels within a certain number of days after the facility became operational. The payment is a part of the 20-year services agreement with PDVSA. The Company has recorded the payment as deferred revenue and is recognizing the revenue on a straight-line basis over the life of the contract.

Impairment of Long-lived Assets

The evaluation for impairment of assets is done on an individual asset or asset group basis when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When such a determination has been made, management’s estimate of undiscounted future cash flows attributable to the assets is compared to the carrying value of the assets to determine whether impairment has occurred. If an impairment of the carrying value has occurred, the amount of the impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.

Provision for Severance Benefits

The Company is liable for employee severance benefits, which are a vested right of workers under the Venezuelan Labor Law. These benefits are accrued as service is rendered and transferred monthly to a trust fund on behalf of each worker.

Foreign Currency

The functional currency of the Company is the U.S. dollar. Transactions denominated in currencies other than the U.S. dollar are recorded based on exchange rates at the time such transactions take place. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the statements of income.

9

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Income Taxes

Deferred foreign income tax is computed using the liability method and is provided on all temporary differences between the financial basis and tax basis of the Company’s assets and liabilities. Management’s judgment and income tax assumptions are used to determine the levels, if any, of valuation allowances associated with deferred foreign tax assets.

3. Risks and Uncertainties

The Company relies on the Venezuelan oil and natural gas industry and is exposed to the operating, geographical and financial risks relevant to this industry. Geographical risks are generated by the political, legal, social and economic conditions of the country. Throughout 2005 and 2004, Venezuela endured abnormal levels of instability in the economic, political, and social environment. On February 4, 2003, the Venezuelan government established a currency exchange control. As a result, there was a 20 percent devaluation of the Venezuelan Bolivar with respect to the U.S. Dollar during 2004 and a 12 percent devaluation in 2005. The exchange rate at December 31, 2005 and 2004 was 2150 and 1920 Venezuelan Bolivars to 1 U.S. dollar, respectively.

Since December 31, 2005, there has been no further devaluation of the Venezuelan Bolivar. The impact of the devaluation on the Company’s financial statements is minimized by the fact that the Company holds most of its cash in U.S. Dollars.

The Venezuelan economy has been considered hyper-inflationary in the past, but has not been considered hyper-inflationary since 2001. The inflation rate for Venezuela was 14 percent in 2005, compared to 19 percent in 2004, and 27 percent in 2003. The impact of inflation on the Company’s financial results is minimized by contractual terms that allow for tariff increases commensurate with inflation.

There is no certainty of the future political and economic conditions or the impact changes in such conditions may have on laws affecting taxes, exchange rates, currency convertibility, environmental and labor regulations, repatriation of profits and capital return. If the current conditions persist, the Company’s economic, financial and operational capacity could be somehow affected, as well as its organizational structure. However, the conditions in the Company’s contract with PDVSA provide for adjustments for inflation, tariffs paid to the Company in U.S. dollars, and significant fixed tariffs not affected by low volumes from PDVSA. As a result, management believes the impact should not be significant.

10

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

3. Risks and Uncertainties (continued)

Our cash equivalents consist of high-quality securities placed with various major financial institutions with credit ratings at or above BBB by Standard & Poor’s or Baa1 by Moody’s Investors Service.

4. Related Party Transactions

The Company reimburses shareholders and affiliated companies (including WilPro Energy Services (El Furrial) Limited, Williams International Venezuela Limited, and Williams International Services Company, which are all subsidiaries of Williams International Company) for expenses incurred on behalf of the Company. These reimbursements totaled $1.4 million and $1.2 million in 2005 and 2004, respectively.

Receivables and payables with shareholders and other affiliated companies at December 31 are as follows:

	2005		2004
Accounts payable:
Williams International Services Company	$	293,232	$	197,099
WilPro Energy Services (El Furrial) Limited		79,206		168,182
	$	372,438	$	365,281

11

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

5. Property, Plant and Equipment

At December 31, property, plant and equipment are as follows:

	2005			2004
Natural gas compression plant facilities	$	316,593,960		$	315,879,994
Spare parts		715,467			684,443
Vehicles		643,721			578,670
Computer software and equipment		325,199			309,520
Other		135,128			147,312
		318,413,475			317,599,939
Accumulated depreciation		(68,716,948	)		(52,784,748	)
	$	249,696,527		$	264,815,191

6. Notes Payable and Credit Facilities

At December 31, long-term notes payable are represented as follows:

	2005		2004
Overseas Private Investment Corporation:
6.62% note payable, due in semi-annual payments plus interest through September 15, 2016	$	100,750,000	$	112,875,000
ABN AMRO Bank N.V.:
Variable rate note payable, due in semi-annual payments plus interest through September 15, 2016		84,630,000		94,815,000
		185,380,000		207,690,000
Current portion		22,310,000		22,310,000
	$	163,070,000	$	185,380,000

In October 2003, the Company received funding under loan agreements with OPIC and ABN AMRO Bank N.V. Interest on the note payable to ABN AMRO Bank N.V. is based on the six-month LIBOR rate plus 0.8 percent (4.81 percent at December 31, 2005). These notes are secured by the physical assets and common stock of the Company. Under the terms of the agreement, the Company maintains various restricted bank accounts. The use of each account

12

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

6. Notes Payable and Credit Facilities (continued)

is restricted for a specific use including receipt of revenue, payment of operating and maintenance expenses, debt service, uninsured loss reserve, and distributions to shareholders. The loan agreement contains various other restrictive covenants and commitments, including limitations on additional indebtedness, payment of dividends, asset sales and leasing activities.

Aggregate minimum maturities of long-term debt each of the next five years is as follows:

2006	$	22,310,000
2007		22,310,000
2008		23,000,000
2009		26,220,000
2010		26,680,000

During 2002 through 2004, deferred financing costs of $10.7 million were incurred in connection with the debt issuance. SACE provides a guarantee on behalf of ABN AMRO Bank N.V. for which the Company paid an $18 million fee. These costs are being amortized on a straight-line basis over the term of the notes. Accumulated amortization of the deferred financing costs is $4.6 million and $2.4 million as of December 31, 2005 and 2004, respectively.

At December 31, 2005 and 2004, the Company had three irrevocable standby letters of credit for $28 million, $12 million, and $5 million issued in favor of PDVSA. The letters of credit renew automatically each year and were issued in connection with the service agreement between the Company and PDVSA. The letters of credit cannot be drawn upon unless the Company defaults on their agreement with PDVSA as outlined in the service agreement.

7. Income Taxes

The Company is subject to Venezuelan corporate income taxes at a 34 percent tax rate on taxable income. Taxable income differs from financial income principally due to adjustments for the difference in reporting currency for book and tax purposes, differences in depreciable lives, and certain permanent differences. Tax losses may be carried forward three years. Venezuelan tax law requires a company that had been operational for more than three years to pay the higher of income tax or business asset tax. Business asset tax was assessed at 1 percent of the average value of the Company’s assets revalued for tax purposes and was repealed as of September 1, 2004.

13

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

7. Income Taxes (continued)

Significant components of deferred taxes at December 31 are as follows:

	2005		2004
Deferred tax liabilities:
Property, plant and equipment	$	21,327,000	$	16,733,000
Debt financing costs		2,851,000		3,023,000
Total deferred tax liabilities		24,178,000		19,756,000
Deferred tax assets:
Investment tax credit carryforward (ITC)		—		779,285
Mark to market on interest rate cap		141,000		699,000
Net operating loss carryforward (NOL)		—		13,105,468
Business asset tax carryforward (BAT)		—		526,102
Deferred revenue		2,971,000		3,672,000
		3,112,000		18,781,855
Valuation allowance		—		(14,410,855	)
Total deferred tax assets		3,112,000		4,371,000
Net deferred tax liability	$	21,066,000	$	15,385,000

In 2005, the provision for foreign income tax consists of a deferred provision of $5,822,000. In 2004, the Company’s provision for foreign income tax consisted of a deferred provision of $6,523,000. In 2005, the Company’s effective tax rate is lower than the expected statutory rate primarily due to inflation adjustments offset by the utilization of ITC carryforwards and BAT credit carryforwards in the amounts of $796,000 and $537,000, respectively, plus the utilization of $28,945,000 in NOL carryforwards. All available ITC and BAT credit carryforwards were utilized in 2005 while the remaining NOL balance of $5,500,000 expired at year end 2005. Therefore there were no balances of any type carried forward to the year 2006.

8. Financial Instruments

The Company used the following methods and assumptions in estimating its fair-value disclosures for financial instruments:

Cash and cash equivalents and restricted cash and cash equivalents: The carrying amounts reported in the balance sheet approximate fair value due to the short-term maturity of the underlying instruments.

14

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

8. Financial Instruments (continued)

Derivative asset: Fair value is determined by discounting estimated future cash flows using forward-interest rates derived from the year-end yield curve. Fair value was calculated by the financial institution that is the counterparty to the interest rate cap derivative.

Notes payable: The fair value of the fixed rate long-term note was determined based on prices of similar securities with similar terms and credit ratings. The Company used the expertise of an outside investment banking firm to estimate the fair value of this note. The carrying amount of the variable rate long-term notes reported in the balance sheet approximates fair value as this note has an interest rate approximating market.

	2005						2004
	Carrying						Carrying
Asset (liability)	amount			Fair value			amount			Fair value
Cash and cash equivalents	$	143,547		$	143,547		$	94,557		$	94,557
Restricted cash and cash equivalents		62,051,490			62,051,490			67,418,575			67,418,575
Derivative asset		808,870			808,870			1,244,132			1,244,132
Notes payable		(185,380,000	)		(172,045,697	)		(207,690,000	)		(225,943,010	)

15

EX-99.5

Exhibit 99.5

Financial Statements
WilPro Energy Services (El Furrial) Limited
Years ended December 31, 2005 and 2004

WilPro Energy Services (El Furrial) Limited

Financial Statements

Years ended December 31, 2005 and 2004

Contents

Report of Independent Auditors	1
Audited Financial Statements
Balance Sheets	2
Statements of Income	3
Statements of Shareholders’ Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

Report of Independent Auditors

To the Shareholders and Board of Directors
WilPro Energy Services (El Furrial) Limited

We have audited the accompanying balance sheets of WilPro Energy Services (El Furrial) Limited as of December 31, 2005 and 2004, and the related statements of income, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WilPro Energy Services (El Furrial) Limited at December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Tulsa, Oklahoma
April 24, 2006

1

WilPro Energy Services (El Furrial) Limited

Balance Sheets

	December 31
	2005		2004
Assets
Current assets:
Cash and cash equivalents	$	457,933	$	394,973
Restricted cash and cash equivalents		19,440,078		16,817,751
Accounts receivable:
Trade – PDVSA Petroleo, S.A.		26,585,922		28,453,193
Affiliates		79,206		168,182
Other		109,962		102,015
Prepaid expenses		6,001,915		3,720,736
Total current assets		52,675,016		49,656,850
Restricted cash and cash equivalents		10,922,884		11,363,261
Property, plant and equipment, net		139,175,067		150,233,124
Deferred financing costs, net		3,896,015		4,389,425
Other assets		78,270		67,271
Total assets	$	206,747,252	$	215,709,931
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable:
Trade	$	956,880	$	619,050
Affiliates		459,973		418,241
Accrued liabilities		6,534,053		7,362,154
Value-added tax payable		3,040,060		2,991,210
Foreign taxes payable		6,859,804		884,000
Interest payable		1,115,244		1,251,786
Current portion of notes payable		11,868,132		11,868,132
Total current liabilities		30,834,146		25,394,573
Notes payable		83,076,923		94,945,055
Deferred foreign income tax		22,472,000		19,626,000
Shareholders’ equity:
Common stock, class A, $1 par value, 25,000 shares authorized, issued and outstanding		25,000		25,000
Common stock, class B, $1 par value, 12,500 shares authorized, issued and outstanding		12,500		12,500
Additional paid-in capital		60,516,037		60,516,037
Retained earnings		9,810,646		15,190,766
Total shareholders’ equity		70,364,183		75,744,303
Total liabilities and shareholders’ equity	$	206,747,252	$	215,709,931

See accompanying notes.

2

WilPro Energy Services (El Furrial) Limited

Statements of Income

	Year ended December 31
	2005			2004
Revenues	$	61,814,039		$	63,231,208
Operating expenses		12,590,226			14,150,862
Depreciation		12,129,857			12,212,632
General and administrative expenses		2,481,862			2,492,277
Total costs and expenses		27,201,945			28,855,771
Operating income		34,612,094			34,375,437
Other (income) expense:
Interest expense		9,504,171			11,118,652
Foreign currency transaction loss		565,288			738,236
Other income, net		(254,245	)		(278,634	)
		9,815,214			11,578,254
Income before foreign income tax		24,796,880			22,797,183
Provision for foreign income tax		9,677,000			4,089,000
Net income	$	15,119,880		$	18,708,183

See accompanying notes.

3

WilPro Energy Services (El Furrial) Limited

Statements of Shareholders’ Equity

					Additional
	Common Stock				Paid-In		Retained
	Class A		Class B		Capital		Earnings			Total
Balance, December 31, 2003	$	25,000	$	12,500	$	60,516,037	$	12,482,583		$	73,036,120
Net income		—		—		—		18,708,183			18,708,183
Dividends paid		—		—		—		(16,000,000	)		(16,000,000	)
Balance, December 31, 2004		25,000		12,500		60,516,037		15,190,766			75,744,303
Net income		—		—		—		15,119,880			15,119,880
Dividends paid		—		—		—		(20,500,000	)		(20,500,000	)
Balance, December 31, 2005	$	25,000	$	12,500	$	60,516,037	$	9,810,646		$	70,364,183

See accompanying notes.

4

WilPro Energy Services (El Furrial) Limited

Statements of Cash Flows

	Year ended December 31
	2005			2004
Operating Activities
Net income	$	15,119,880		$	18,708,183
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		12,129,857			12,212,632
Amortization of deferred costs		493,410			493,410
Deferred foreign income taxes		2,846,000			3,205,000
Changes in operating assets and liabilities:
Accounts receivable – trade and other		1,859,324			(7,122,428	)
Value-added tax payable		48,850			1,608,348
Foreign taxes payable		5,975,804			(430,134	)
Prepaid expenses		(2,281,179	)		(419,543	)
Other assets		(10,999	)		1,088
Trade accounts payable		337,830			339,213
Receivables/payables with affiliates		130,708			4,491,508
Accrued liabilities		(828,101	)		(1,646,294	)
Interest payable		(136,542	)		(141,641	)
Net cash provided by operating activities		35,684,842			31,299,342
Investing Activities
Purchases of property, plant and equipment		(1,071,800	)		(199,974	)
Net cash used by investing activities		(1,071,800	)		(199,974	)
Financing Activities
Payments of notes payable		(11,868,132	)		(11,868,132	)
Dividends paid		(20,500,000	)		(16,000,000	)
Changes in restricted cash		(2,181,950	)		(3,268,488	)
Net cash used by financing activities		(34,550,082	)		(31,136,620	)
Net increase (decrease) in cash and cash equivalents		62,960			(37,252	)
Cash and cash equivalents, beginning of year		394,973			432,225
Cash and cash equivalents, end of year	$	457,933		$	394,973
Supplemental Disclosures of Cash Flow Information
Foreign income taxes paid	$	3,171,761		$	1,137,527
Interest paid	$	9,640,713		$	10,766,882

See accompanying notes.

5

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements

December 31, 2005 and 2004

1. Organization and Description of Business

WilPro Energy Services (El Furrial) Limited, (the Company) was incorporated in the Cayman Islands in February 1997. The Company provides installation, engineering, procurement and construction services, as well as operation and maintenance services for natural gas compression facilities at El Furrial oil field, property of PDVSA Petróleo, S.A. (PDVSA) in Venezuela. Williams International El Furrial Limited, a subsidiary of Williams International Company, owns all 25,000 outstanding Class A common shares, and Production Operators Cayman, Incorporated, a subsidiary of Hanover Compression Limited Partnership, owns all 12,500 Class B common shares of the Company.

Under the terms of a services contract with PDVSA, the Company designed and built a high pressure and medium pressure natural gas compression plant and renders natural gas compression services on behalf of PDVSA at the Company’s own expense and risk. The contract has a 15-year term for the medium pressure plant and 20-year term for the high pressure plant. The services rendered by the Company generate a service fee from PDVSA, which is the Company’s primary source of revenue. The Company does not require collateral for credit extended to PDVSA. At the end of the contract, PDVSA has the option to 1) renew the current service agreement, allowing the Company to retain ownership of the assets, 2) purchase the El Furrial assets at book value, which is expected to be an insignificant amount, and either retain the Company under an operations and management agreement or terminate its relationship with the Company, or 3) require the Company to dismantle the assets and restore the land to its original condition.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in those financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

6

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents include demand and time deposits, certificates of deposit and other marketable securities with maturities of three months or less when acquired.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents within current assets consists primarily of bank accounts restricted under the Company’s loan agreement with Overseas Private Investment Corporation (OPIC) (see Note 6) for receipt of revenue, payment of operating and maintenance expenses, distributions to shareholders and funding for the next quarterly debt principal and interest payment. Restricted cash and cash equivalents within noncurrent assets consists primarily of bank accounts restricted under the loan agreement with OPIC for six months of principal and interest payments and an uninsured loss reserve. The Company does not expect these cash and cash equivalents to be released within the next twelve months.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. No allowance for doubtful accounts is recognized at the time the revenue, which generates the accounts receivable, is recognized. An allowance for doubtful accounts is not common for the Company as it only has one customer. However, management assesses the collectibility of accounts receivable based on existing economic conditions, and contractual terms with its client. Receivables are considered past due if payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted.

7

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Property, Plant and Equipment

Property, plant and equipment is carried at cost. The carrying value of these assets is also based on estimates, assumptions and judgments relative to capitalized costs, useful lives and salvage values. Improvements increasing functionality or useful lives are added to the cost of the corresponding assets, while the cost of repairs and maintenance are charged to expense as incurred. All spare parts inventory items in excess of $2,500 are capitalized and recorded at historical cost and expensed upon usage. Depreciation is recorded using the straight-line method over estimated useful lives. An estimated useful life of 15 to 20 years is used for natural gas compression plant facilities and an estimated useful life of 5 years is used for all other property, plant and equipment.

Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Company has not recorded an asset retirement obligation based on a 100% probability assessment that PDVSA, under the contract terms, will obtain the El Furrial facility and assume all retirement obligations at the end of the contract term.

Revenue Recognition Policy

The Company recognizes revenue for services in the period they are performed based on contractual terms and associated volumes.

Impairment of Long-lived Assets

The evaluation for impairment of assets is done on an individual asset or asset group basis when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When such a determination has been made, management’s estimate of undiscounted future cash flows attributable to the assets is

8

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

compared to the carrying value of the assets to determine whether impairment has occurred. If an impairment of the carrying value has occurred, the amount of the impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.

Provision for Severance Benefits

The Company is liable for employee severance benefits, which are a vested right of workers under the Venezuelan Labor Law. These benefits are accrued as service is rendered and transferred monthly to a trust fund on behalf of each worker.

Foreign Currency

The functional currency of the Company is the U.S. dollar. Transactions denominated in currencies other than the U.S. dollar are recorded based on exchange rates at the time such transactions take place. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the statements of income.

Income Taxes

Deferred foreign income tax is computed using the liability method and is provided on all temporary differences between the financial basis and tax basis of the Company’s assets and liabilities. Management’s judgment and income tax assumptions are used to determine the levels, if any, of valuation allowances associated with deferred foreign tax assets.

3. Risks and Uncertainties

The Company relies on the Venezuelan oil and natural gas industry and is exposed to the operating, geographical and financial risks relevant to this industry. Geographical risks are generated by the political, legal, social and economic conditions of the country. Throughout 2005 and 2004, Venezuela endured abnormal levels of instability in the economic, political, and social environment. On February 4, 2003, the Venezuelan government established a currency exchange control. As a result, there was a 20 percent devaluation of the Venezuelan Bolivar with respect to the U.S. Dollar during 2004 and a 12 percent devaluation in 2005. The exchange rate at December 31, 2005 and 2004 was 2150 and 1920 Venezuelan Bolivars to 1 U.S. dollar, respectively.

9

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

3. Risks and Uncertainties (continued)

Since December 31, 2005, there has been no further devaluation of the Venezuelan Bolivar. The impact of the devaluation on the Company’s financial statements is minimized by the fact that the Company holds most of its cash in U.S. Dollars.

The Venezuelan economy has been considered hyper-inflationary in the past, but has not been considered hyper-inflationary since 2001. The inflation rate for Venezuela was 14 percent in 2005, compared to 19 percent in 2004, and 27 percent in 2003. The impact of inflation on the Company’s financial results is minimized by contractual terms that allow for tariff increases commensurate with inflation.

There is no certainty of the future political and economic conditions or the impact changes in such conditions may have on laws affecting taxes, exchange rates, currency convertibility, environmental and labor regulations, repatriation of profits and capital return. If the current conditions persist, the Company’s economic, financial and operational capacity could be somehow affected, as well as its organizational structure. However, the conditions in the Company’s contract with PDVSA provide for adjustments for inflation, tariffs paid to the Company in U.S. dollars, and minimum tariffs when PDVSA’s volumes are low. As a result, management believes the impact should not be significant.

During 2003 the Company received payment of U.S. $8.1 million in Venezuelan Bolivars related to May and June U.S. Dollar invoices. Under the contract terms with PDVSA, these were required to be paid in U.S. Dollars because of the exchange controls currently in place preventing the exchange of Bolivars into U.S. Dollars. The Company is negotiating the return of the Bolivars to PDVSA in exchange for U.S. Dollars. At December 31, 2005, the Company has an $8.1 million receivable for the U.S. Dollars and a $6.0 million payable for the Bolivars on the balance sheet. The payable has decreased due to devaluation of the Venezuelan Bolivar.

10

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

3. Risks and Uncertainties (continued)

The Company has $9.7 million in accounts receivable at December 31, 2005 due to labor escalation related to April 2004 and November 2004 through December 2005 services. Such amount is based on contractual terms; however, PDVSA is disputing the index used in the calculation of this escalation. The index used has remained the same since the start of the contract. In March 2006, the Company collected 50% of the pending receivables as of November 2005. The Company is negotiating with PDVSA to amend the contract provision regarding the calculation of this escalation factor and to extend the contract. The Company has reduced the receivable balance for amounts offered to PDVSA to complete this contract amendment. The Company believes the remaining receivable will be collected in full.

Our cash equivalents consist of high-quality securities placed with various major financial institutions with credit ratings at or above BBB by Standard & Poor’s or Baa1 by Moody’s Investors Service.

4. Related Party Transactions

The Company reimburses shareholders and affiliated companies (including the following subsidiaries of Williams International Company: WilPro Energy Services (PIGAP II) Limited, Williams International Venezuela Limited, and Williams International Services Company) for expenses incurred on behalf of the Company. These reimbursements totaled $1.7 million and $1.5 million for 2005 and 2004, respectively.

11

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

4. Related Party Transactions (continued)

Receivables and payables with shareholders and other affiliated companies at December 31 are as follows:

	2005		2004
Accounts receivable:
WilPro Energy Services (PIGAP II) Limited	$	79,206	$	168,182
	$	79,206	$	168,182
Accounts payable:
Williams International Services Company	$	108,803	$	298,187
Williams International Venezuela Limited		351,170		120,054
	$	459,973	$	418,241

5. Property, Plant and Equipment

At December 31, property, plant and equipment are as follows:

	2005			2004
Natural gas compression plant facilities	$	221,634,078		$	221,364,248
Spare parts		681,380			443,300
Vehicles		629,112			539,416
Leasehold improvements		842,838			510,411
Computer software and equipment		531,824			505,586
Other		666,740			660,230
		224,985,972			224,023,191
Accumulated depreciation		(85,810,905	)		(73,790,067	)
	$	139,175,067		$	150,233,124

12

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

6. Notes Payable

At December 31, long-term notes payable are represented as follows:

	2005		2004
Overseas Private Investment Corporation:
9.45% note payable, due in equal quarterly principal payments of $2,678,571 plus interest, maturing November 15, 2013	$	85,714,286	$	96,428,572
9.17% note payable, due in equal quarterly principal payments of $288,462 plus interest, maturing November 15, 2013		9,230,769		10,384,615
		94,945,055		106,813,187
Current portion		11,868,132		11,868,132
	$	83,076,923	$	94,945,055

These notes are secured by the physical assets and common stock of the Company. Under the terms of the agreement, the Company maintains various restricted bank accounts. The use of each account is restricted for a specific use including receipt of revenue, payment of operating and maintenance expenses, debt service, uninsured loss reserve, and distributions to shareholders. The loan agreement with OPIC contains various other restrictive covenants and commitments, including limitations on additional indebtedness, payment of dividends and asset sales.

Aggregate minimum maturities of long-term debt total $11,868,132 for each of the next five years.

During 1999, deferred financing costs of $6.6 million were incurred in connection with the debt issuance. The costs are being amortized on a straight-line basis over the term of the notes. Accumulated amortization of the deferred financing costs is $2.7 million and $2.2 million as of December 31, 2005 and 2004, respectively.

13

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

7. Income Taxes

The Company is subject to Venezuelan corporate income taxes at a 34 percent tax rate on taxable income. Taxable income differs from financial income principally due to adjustments for the difference in reporting currency for book and tax purposes, differences in depreciable lives, and certain permanent differences. Tax losses may be carried forward three years. Venezuelan tax law required a company that had been operational for more than three years to pay the higher of income tax or business asset tax. Business asset tax was assessed at one percent of the average value of the Company’s assets revalued for tax purposes and was repealed as of September 1, 2004.

Significant components of deferred taxes at December 31 are as follows:

	2005		2004
Deferred tax liabilities:
Property, plant and equipment	$	21,146,000	$	17,965,000
Debt financing costs		1,326,000		1,661,000
Total deferred tax liability	$	22,472,000	$	19,626,000

In 2005, the foreign income tax of $9,677,000 consists of foreign income tax of $6,831,000 and deferred provision of $2,846,000. In 2004, the Company’s foreign income tax of $4,089,000 consisted of foreign income tax of $884,000 and deferred provision of $3,205,000. In 2005, the Company’s effective tax rate is more than the expected statutory rate primarily due to inflation adjustments.

14

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

8. Financial Instruments

The Company used the following methods and assumptions in estimating its fair-value disclosures for financial instruments:

Cash and cash equivalents and restricted cash and cash equivalents: The carrying amounts reported in the balance sheet approximate fair value due to the short-term maturity of the underlying instruments.

Notes payable: The fair value of the long-term notes was determined based on prices of similar securities with similar terms and credit ratings. The Company used the expertise of an outside investment banking firm to estimate the fair value of the notes.

	2005						2004
	Carrying						Carrying
Asset (liability)	amount			Fair value			amount			Fair value
Cash and cash equivalents	$	457,933		$	457,933		$	394,973		$	394,973
Restricted cash and cash equivalents		30,362,962			30,362,962			28,181,012			28,181,012
Notes payable		(94,945,055	)		(102,370,424	)		(106,813,187	)		(134,285,092	)

15

EX-99.6

EXHIBIT 99.6

Financial Statements
WilPro Energy Services (PIGAP II) Limited

Years ended December 31, 2004 and 2003

WilPro Energy Services (PIGAP II) Limited

Financial Statements

Years ended December 31, 2004 and 2003

Contents

Report of Independent Auditors	1
Audited Financial Statements
Balance Sheets	2
Statements of Income and Comprehensive Income	3
Statements of Shareholders’ Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

Report of Independent Auditors

To the Shareholders and Board of Directors
WilPro Energy Services (PIGAP II) Limited

We have audited the accompanying balance sheets of WilPro Energy Services (PIGAP II) Limited as of December 31, 2004 and 2003, and the related statements of income and comprehensive income, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WilPro Energy Services (PIGAP II) Limited at December 31, 2004 and 2003, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

April 22, 2005

1

WilPro Energy Services (PIGAP II) Limited
Balance Sheets

	December 31
	2004			2003
Assets
Current assets:
Cash and cash equivalents	$	94,557		$	127,566
Restricted cash and cash equivalents		48,651,973			30,199,503
Accounts receivable:
Trade — PDVSA Petroleo, S.A.		15,380,796			6,978,895
Other		883,571			2,187,154
Prepaid taxes		1,974,322			2,369,859
Prepaid expenses		1,158,204			999,398
Total current assets		68,143,423			42,862,375
Restricted cash and cash equivalents		18,766,602			18,520,185
Property, plant and equipment, net		264,815,191			280,637,005
Deferred financing costs		25,952,140			27,974,446
Derivative asset		1,244,132			2,745,108
Other assets		339,711			—
Total assets	$	379,261,199		$	372,739,119
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable:
Trade	$	1,420,924		$	4,300,756
Affiliates		365,281			4,921,552
Other		338,229			212,971
Value-added tax payable		1,927,279			768,624
Foreign taxes payable		—			529,805
Accrued liabilities		534,983			1,089,719
Notes payable due within one year		22,310,000			22,310,000
Accrued interest		2,981,642			2,166,388
Deferred revenue		521,519			521,519
Total current liabilities		30,399,857			36,821,334
Notes payable		185,380,000			207,690,000
Deferred revenue		8,735,443			9,256,962
Deferred foreign income tax		15,385,000			9,372,000
Shareholders’ equity:
Common stock, class A, $1 par value, 35,000 shares authorized, 70 shares issued and outstanding		70			70
Common stock, class B, $1 par value, 15,000 shares authorized, 30 shares issued and outstanding		30			30
Additional paid-in capital		101,914,330			101,914,330
Retained earnings		38,803,342			8,050,622
Accumulated other comprehensive loss — net loss on cash flow hedge instruments		(1,356,873	)		(366,229	)
Total shareholders’ equity		139,360,899			109,598,823
Total liabilities and shareholders’ equity	$	379,261,199		$	372,739,119

See accompanying notes.

2

WilPro Energy Services (PIGAP II) Limited

Statements of Income and Comprehensive Income

	Years ended December 31,
	2004			2003
Revenues	$	85,767,089		$	85,276,221
Operating expenses		12,824,040			11,357,396
Depreciation		15,995,101			15,987,685
General and administrative expenses		7,001,345			6,955,201
Total costs and expenses		35,820,486			34,300,282
Operating income		49,946,603			50,975,939
Other income (expense):
Interest expense		(12,281,461	)		(2,368,287	)
Foreign currency transaction gain/(loss), net		(854,915	)		348,803
Other income, net		465,493			383,533
		(12,670,883	)		(1,635,951	)
Income before foreign income tax		37,275,720			49,339,988
Provision for foreign income tax		6,523,000			6,464,000
Net income		30,752,720			42,875,988
Other comprehensive loss — unrealized loss on cash flow hedging (net of income tax benefit of $510,000 in 2004 and $189,000 in 2003)		(990,644	)		(366,229	)
Comprehensive income	$	29,762,076		$	42,509,759

See accompanying notes.

3

WilPro Energy Services (PIGAP II) Limited

Statements of Shareholders’ Equity

										Accumulated
					Additional					Other
	Common Stock				Paid-In		Retained			Comprehensive
	Class A		Class B		Capital		Earnings			Loss			Total
Balance, December 31, 2002	$	70	$	30	$	101,914,330	$	21,890,248		$	—		$	123,804,678
Net income		—		—		—		42,875,988			—			42,875,988
Other comprehensive loss		—		—		—		—			(366,229	)		(366,229	)
Dividends		—		—		—		(56,715,614	)		—			(56,715,614	)
Balance, December 31, 2003		70		30		101,914,330		8,050,622			(366,229	)		109,598,823
Net income		—		—		—		30,752,720			—			30,752,720
Other comprehensive loss		—		—		—		—			(990,664	)		(990,644	)
Balance, December 31, 2004	$	70	$	30	$	101,914,330	$	38,803,342		$	(1,356,873	)	$	139,360,899

     See accompanying notes.

4

WilPro Energy Services (PIGAP II) Limited

Statements of Cash Flows

	Years ended December 31,
	2004			2003
Operating activities
Net income	$	30,752,720		$	42,875,988
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		15,995,101			15,987,685
Amortization of deferred costs		2,212,347			—
Deferred foreign income tax expense		6,523,332			5,933,663
Changes in operating assets and liabilities:
Accounts receivable		(7,098,318	)		4,145,319
Value-added tax payable		1,158,655			(1,976,926	)
Foreign taxes payable		(529,805	)		529,805
Prepaid expenses		(158,806	)		(673,533	)
Prepaid taxes		395,537			(505,058	)
Other non-current assets		(339,711	)		—
Accrued liabilities		(554,736	)		(434,871	)
Accounts payable		(2,754,574	)		279,802
Receivable/payable with affiliates		(4,556,271	)		3,494,962
Deferred revenue		(521,519	)		(521,519	)
Interest payable		815,254			2,166,388
Net cash provided by operating activities		41,339,206			71,301,705
Investing activities
Purchases of property, plant and equipment		(173,287	)		(281,225	)
Net cash used in investing activities		(173,287	)		(281,225	)
Financing activities
Payments of notes payable		(22,310,000	)		—
Payments of shareholder loans		—			(205,000,000	)
Dividends paid		—			(56,715,614	)
Acquisition of interest rate cap		—			(3,300,000	)
Loan proceeds received		—			230,000,000
Additions to deferred financing costs		(190,041	)		(22,671,485	)
Changes in restricted cash and cash equivalents		(18,698,887	)		(48,719,688	)
Net cash used in financing activities		(41,198,928	)		(106,406,787	)
Net decrease in cash and cash equivalents		(33,009	)		(35,386,307	)
Cash and cash equivalents, beginning of year		127,566			35,513,873
Cash and cash equivalents, end of year	$	94,557		$	127,566
Supplemental Disclosures of Cash Flow Information
Foreign income taxes paid	$	1,532,899		$	1,790,735
Interest paid	$	9,253,859		$	—

See accompanying notes.

5

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements

December 31, 2004 and 2003

1. Organization and Description of Business

WilPro Energy Services (PIGAP II) Limited (the Company) was incorporated in the Cayman Islands in July 1998. The Company provides installation, engineering, procurement and construction services, as well as operation and maintenance services for natural gas compression facilities at the Santa Bárbara/Pirital oil field property of PDVSA Petróleo, S.A. (PDVSA), formerly PDVSA Petróleo y Gas, S.A., in Venezuela. Williams International PIGAP Limited, a subsidiary of Williams International Company, owns all 70 outstanding Class A common shares, and Hanover Cayman Limited (a wholly owned subsidiary of Hanover Compression Limited Partnership), owns all 30 Class B common shares of the Company.

The Company has entered into a services contract with PDVSA. Under the terms of this contract, the Company designed and built a high-pressure plant, which was completed in August 2001, and renders natural gas compression services on behalf of PDVSA at the Company’s own expense and risk. The contract has an initial term of 20 years. After this term, PDVSA is under no obligation to receive these services. The services rendered by the Company generate a service fee from PDVSA, which is the primary source of revenue for the Company. The Company does not require collateral for credit extended to PDVSA. At the end of the contract, PDVSA has the option to 1) renew the current service agreement, allowing the Company to retain ownership of the assets, 2) purchase the PIGAP II assets at book value, which is expected to be an insignificant amount, and either retain the Company under an operations and management agreement or terminate its relationship with the Company, or 3) require the Company to dismantle the assets and restore the land to its original condition.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in those financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

6

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents include demand and time deposits, certificates of deposit and other marketable securities with maturities of three months or less when acquired.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents within current assets consists primarily of bank accounts restricted under the Company’s loan agreement with Overseas Private Investment Corporation (OPIC), ABN AMRO Bank N.V., and Istituto per i Servizi Assicurativi del Commercio Estero (SACE) (see Note 6) for receipt of revenue, payment of operating and maintenance expenses, distributions to shareholders and funding for the next semi-annual debt principal and interest payment. Restricted cash and cash equivalents within noncurrent assets consists primarily of bank accounts restricted under the loan agreement with OPIC and SACE for six months of principal and interest payments and an uninsured loss reserve. The Company does not expect these cash and cash equivalents to be released within the next twelve months.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. No allowance for doubtful accounts is recognized at the time the revenue, which generates the accounts receivable, is recognized. An allowance for doubtful accounts is not common for the Company as it only has one customer. However, management assesses the collectibility of accounts receivable based on existing economic conditions and contractual terms with its client. Receivables are considered past due if payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted.

Derivative instruments

During 2003, the Company entered into an interest rate cap agreement to hedge the interest rate risk associated with its loan agreement. This derivative instrument protects against increases in the LIBOR interest rates above 5.85 percent. This derivative is reflected on the balance sheet at fair value and has been designated in a cash flow hedging relationship. The effective portion of the change in fair value is reported in other comprehensive income and reclassified into earnings in the period in which the hedged

7

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

item affects earnings. To match the underlying transaction being hedged, derivative gains or losses reclassified into earnings are recognized in interest expense. The hedging relationship is regularly evaluated to determine whether it is expected to be, and has been a highly effective hedge. Forecasted transactions designated as the hedged item are regularly evaluated to assess whether they continue to be probable of occurring. During 2004, there are no amounts excluded from the effectiveness calculation and no hedge ineffectiveness. As of December 31, 2004, the Company has hedged future cash flows associated with interest payments for 12 years, and, based on recorded values at December 31, 2004, no significant gains or losses are expected to be reclassified into earnings within the next year.

Property, Plant and Equipment

Property, plant and equipment is recorded at historical cost. The carrying value of these assets is based on estimates, assumptions and judgments relative to capitalized costs, useful lives and salvage values. Improvements increasing useful lives are added to the cost of the corresponding assets, while the cost of repairs and maintenance are charged to expense as incurred. All spare parts inventory items in excess of $2,500 are capitalized and recorded at historical cost and expensed upon usage. Depreciation is recorded using the straight-line method over estimated useful lives. An estimated useful life of 20 years is used for natural gas compression plant facilities and an estimated useful life of 5 years is used for all other property, plant and equipment.

Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Company has not recorded an asset retirement obligation based on a 100% probability assessment that PDVSA, under the contract terms, will obtain the Pigap II facility and assume all retirement obligations at the end of the contract term.

In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143, to clarify certain terms and requirements of SFAS No. 143. The Company does not anticipate any material impact to its financial position or results of operations in 2005.

8

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Revenue Recognition Policy

The Company recognizes revenue for services in the period they are performed. On December 27, 2002, the Company received $10.3 million from PDVSA for achieving specified production levels within a certain number of days after the facility became operational. The payment is a part of the 20-year services agreement with PDVSA. The Company has recorded the payment as deferred revenue and is recognizing the revenue on a straight-line basis over the life of the contract.

Impairment of Long-lived Assets

The evaluation for impairment of assets is done on an individual asset or asset group basis when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When such a determination has been made, management’s estimate of undiscounted future cash flows attributable to the assets is compared to the carrying value of the assets to determine whether impairment has occurred. If an impairment of the carrying value has occurred, the amount of the impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.

Provision for Severance Benefits

The Company is liable for employee severance benefits, which are a vested right of workers under the Venezuelan Labor Law. These benefits are accrued as service is rendered and transferred monthly to a trust fund on behalf of each worker.

Foreign Currency

The functional currency of the Company is the U.S. dollar. Transactions denominated in currencies other than the U.S. dollar are recorded based on exchange rates at the time such transactions take place. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the statements of income.

9

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Income Taxes

Deferred foreign income tax is computed using the liability method and is provided on all temporary differences between the financial basis and tax basis of the Company’s assets and liabilities. Management’s judgment and income tax assumptions are used to determine the levels, if any, of valuation allowances associated with deferred foreign tax assets.

Change in Presentation

Certain prior year amounts have been reclassified to conform with the current year presentation.

3. Risks and Uncertainties

The Company relies on the Venezuelan oil and natural gas industry and is exposed to the operating, geographical and financial risks relevant to this industry. Geographical risks are generated by the political, legal, social and economic conditions of the country. Throughout 2004 and 2003, Venezuela endured abnormal levels of instability in the economic, political, and social environment. On February 4, 2003, the Venezuelan government established a currency exchange control. As a result, there was a 14 percent devaluation of the Venezuelan Bolivar with respect to the U.S. Dollar during 2003 and a 20 percent devaluation in 2004. The exchange rate at December 31, 2004 and 2003 was 1920 and 1600 Venezuelan Bolivars to 1 U.S. dollar, respectively.

Since December 31, 2004, the Venezuelan Bolivar has declined an additional 12 percent to 2150 in March 2005. The impact of the devaluation on the Company’s financial statements is minimized by the fact that the Company holds most of its cash in U.S. Dollars.

In December 2002, a national strike was initiated that included the majority of the economic and productive sectors, including the oil industry, which contributes a substantial amount of foreign currency income to the country. The national strike continued until the beginning of February 2003. This situation caused a strong economic tapering in the business environment resulting in shortages of consumer products and fuel. In addition, PDVSA experienced considerable changes in management and

10

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

3. Risks and Uncertainties (continued)

organizational structure. However, the Company’s operations were proven to be critical and strategic to the oil production of PDVSA during and in the period since the national strike ended.

The Venezuelan economy has been considered hyper-inflationary in the past, but it was no longer considered hyper-inflationary as of January 1, 2002. The inflation rate for Venezuela was 19 percent in 2004, compared to 27 percent in 2003, and 31 percent in 2002. The impact of inflation on the Company’s financial results is minimized by contractual terms that allow for tariff increases commensurate with inflation.

There is no certainty of the future political and economic conditions or the impact changes in such conditions may have on laws affecting taxes, exchange rates, currency convertibility, environmental and labor regulations, repatriation of profits and capital return. If the current conditions persist, the Company’s economic, financial and operational capacity could be somehow affected, as well as its organizational structure. However, the conditions in the Company’s contract with PDVSA provide for adjustments for inflation, tariffs paid to the Company in U.S. dollars, and significant fixed tariffs not affected by low volumes from PDVSA. As a result, management believes the impact should not be significant.

4. Related Party Transactions

The Company is a member of a group of related companies and has transactions with other related companies based on specified terms. The Company receives or has received technical and personnel assistance from Hanover Cayman Limited Partnership and Williams International Company, a subsidiary of The Williams Companies, Inc. During 2004 and 2003, Hanover Cayman Limited Partnership and Williams International Company did not charge the Company for the technical assistance they provided.

The Company reimburses shareholders and affiliated companies (including WilPro Energy Services (El Furrial) Limited, Williams International Venezuela Limited, and Williams International Services Company, which are all subsidiaries of Williams International Company) for amounts remitted and expenses incurred on behalf of the Company. In addition, the Company receives reimbursements from shareholders and affiliated companies for amounts the Company has remitted on their behalf.

11

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

4. Related Party Transactions (continued)

Payables with shareholders and other affiliated companies at December 31 are as follows:

	2004		2003
Williams International Services Company		197,099		757,548
WilPro Energy Services (El Furrial) Limited		168,182		4,164,004
	$	365,281	$	4,921,552

5. Property, Plant and Equipment

At December 31, property, plant and equipment are as follows:

	2004			2003
Natural gas compression plant facilities	$	309,317,074		$	309,268,563
Rotables and other spare parts		7,247,363			7,100,835
Vehicles		578,670			626,270
Computer software and equipment		309,520			298,961
Other		147,312			167,749
		317,599,939			317,462,378
Accumulated depreciation		(52,784,748	)		(36,825,373	)
	$	264,815,191		$	280,637,005

12

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

6. Notes Payable

At December 31, long-term notes payable are represented as follows:

	2004		2003
Overseas Private Investment Corporation:
6.62% note payable, due in semi-annual payments plus interest through September 15, 2016	$	112,875,000	$	125,000,000
ABN AMRO Bank N.V.:
Variable rate note payable, due in semi-annual payments plus interest through September 15, 2016		94,815,000		105,000,000
		207,690,000		230,000,000
Current portion		22,310,000		22,310,000
	$	185,380,000	$	207,690,000

In October 2003, the Company received funding under loan agreements with OPIC and ABN AMRO Bank N.V. SACE provides a guarantee on behalf of ABN AMRO Bank N.V. for which the Company paid an $18 million fee which is being amortized over the life of the loan. Interest on the note payable to ABN AMRO Bank N.V. is based on the six-month LIBOR rate plus 0.8 percent (2.86 percent at December 31, 2004). These notes are secured by the physical assets and common stock of the Company. Under the terms of the agreement, the Company maintains various restricted bank accounts. The use of each account is restricted for a specific use including receipt of revenue, payment of operating and maintenance expenses, debt service, uninsured loss reserve, and distributions to shareholders. The loan agreement contains various other restrictive covenants and commitments, including limitations on additional indebtedness, payment of dividends, asset sales and leasing activities.

13

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

6. Notes Payable (continued)

Aggregate minimum maturities of long-term debt each of the next five years is as follows:

2005	$	22,310,000
2006		22,310,000
2007		22,310,000
2008		23,000,000
2009		26,220,000

On July 20, 2004 the Company received a notice of default from PDVSA relating to certain operational issues alleging non-compliance under the Company’s services agreement. The Company does not believe there is a basis for such notice. The notice of default from PDVSA could have resulted in an event of default with respect to project loans totaling $207,690,000. On January 10, 2005, the Company obtained a waiver from the lenders concerning the notice of default from PDVSA. The waiver will immediately terminate if PDVSA takes any action evidencing their intention to pursue any right or remedy for the alleged event of default. To date, PDVSA has not taken any action, nor given any indication they will take any action, to pursue any such right or remedy relating to this matter. Moreover, in February of 2005, PDVSA provided the Company with a letter confirming there is no current event of default under the services agreement. Since there is no current event of default, the Company will continue to classify this debt as non-current on its balance sheet.

7. Income Taxes

The Company is subject to Venezuelan corporate income taxes at a 34 percent tax rate on taxable income. Taxable income differs from financial income principally due to adjustments for the difference in reporting currency for book and tax purposes, differences in depreciable lives, and certain permanent differences. Tax losses may be carried forward three years. Venezuelan tax law requires a company that had been operational for more than three years to pay the higher of income tax or business asset tax. Business asset tax was assessed at 1 percent of the average value of the Company’s assets revalued for tax purposes and was repealed as of September 1, 2004.

14

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

7. Income Taxes (continued)

Significant components of deferred taxes at December 31 are as follows:

	2004			2003
Deferred tax liabilities:
Property, plant and equipment	$	16,733,000		$	11,364,000
Debt financing costs		3,023,000			1,869,000
Total deferred tax liabilities		19,756,000			13,233,000
Deferred tax assets:
Investment tax credit carryforward (ITC)		779,285			16,935,000
Mark to market on interest rate cap		699,000			189,000
Net operating loss carryforward (NOL)		13,105,468			14,804,000
Business asset tax carryforward (BAT)		526,102			530,000
Deferred revenue		3,672,000			3,672,000
		18,781,855			36,130,000
Valuation allowance		(14,410,855	)		(32,269,000	)
Total deferred tax assets		4,371,000			3,861,000
Net deferred tax liability	$	15,385,000		$	9,372,000

For the year 2004 the Company applied a valuation allowance against its investment tax credit carryforwards, business asset tax carryforward and net operating loss carryforward, and in 2003 against its investment tax credit carryforwards and net operating loss carryforward. The valuation allowance was established because management is unable to conclude that it is more likely than not that they will be realized during the carryforward period due to the Company’s current tax paying position and the uncertainty associated with the impact of inflation accounting and currency devaluation.

In 2003, the Company’s provision for foreign income tax of $6,464,000 consisted of a business asset tax of $530,000 and a deferred provision of $5,934,000. In 2004, the provision for foreign income tax consists of a deferred provision of $6,523,000. In 2004, the Company’s effective tax rate is lower than the expected statutory rate primarily due to inflation adjustments offset by the utilization of ITC carryforwards in the amount of $9,451,000. At December 31, 2004, the Company adjusted the NOL, ITC and BAT credit carryforwards for inflation, which resulted in an increase in the carryforward balances available for use in future years in the amount of $7,932,000.

15

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

7. Income Taxes (continued)

At December 31, 2004, the Company had ITC carryforwards that expired in the amount of $6,590,000 and adjusted ITC carryforwards of $779,000, of which $767,000 expire in 2005, $11,000 expire in 2006 and $1,000 expire in 2007. The Company has an adjusted net operating loss carryforward of $38,545,000, which expires in 2005. The Company had adjusted business asset tax carryforwards of $526,000, which expire in 2006.

8. Financial Instruments

The Company used the following methods and assumptions in estimating its fair-value disclosures for financial instruments:

Cash and cash equivalents and restricted cash and cash equivalents: The carrying amounts reported in the balance sheet approximate fair value due to the short-term maturity of the underlying instruments.

Derivative asset: Fair value is determined by discounting estimated future cash flows using forward-interest rates derived from the year-end yield curve. Fair value was calculated by the financial institution that is the counterparty to the interest rate cap derivative.

Notes payable: The fair value of the fixed rate long-term note was determined based on prices of similar securities with similar terms and credit ratings. The Company used the expertise of an outside investment banking firm to estimate the fair value of this note. The carrying amount of the variable rate long-term notes reported in the balance sheet approximates fair value as this note has an interest rate approximating market.

	2004						2003
	Carrying						Carrying
Asset (liability)	amount			Fair value			amount			Fair value
Cash and cash equivalents	$	94,557		$	94,557		$	127,566		$	127,566
Restricted cash and cash equivalents		67,418,575			67,418,575			48,719,688			48,719,688
Derivative asset		1,244,132			1,244,132			2,745,108			2,745,108
Notes payable		(207,690,000	)		(225,943,010	)		(230,000,000	)		(254,513,750	)

16

WilPro Energy Services (PIGAP II) Limited

Notes to Financial Statements (continued)

9. Commitments

At December 31, 2004 and 2003, the Company had three unused irrevocable standby letters of credit for $28 million, $12 million and $5 million issued in favor of PDVSA. The letters of credit renew automatically each year and were issued in connection with the service agreement between the Company and PDVSA. The letters of credit cannot be drawn upon unless the Company defaults on their agreement with PDVSA as outlined in the service agreement.

17

EX-99.7

Exhibit 99.7

Financial Statements
WilPro Energy Services (El Furrial) Limited

Years ended December 31, 2004 and 2003

WilPro Energy Services (El Furrial) Limited

Financial Statements

Years ended December 31, 2004 and 2003

Contents

Report of Independent Auditors	1
Audited Financial Statements
Balance Sheets	2
Statements of Income	3
Statements of Shareholders’ Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

Report of Independent Auditors

To the Shareholders and Board of Directors
WilPro Energy Services (El Furrial) Limited

We have audited the accompanying balance sheets of WilPro Energy Services (El Furrial) Limited as of December 31, 2004 and 2003, and the related statements of income, shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WilPro Energy Services (El Furrial) Limited at December 31, 2004 and 2003, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

April 22, 2005

1

WilPro Energy Services (El Furrial) Limited

Balance Sheets

	December 31
	2004		2003
Assets
Current assets:
Cash and cash equivalents	$	394,973	$	432,225
Restricted cash and cash equivalents		16,817,751		12,949,707
Accounts receivable:
Trade – PDVSA Petroleo, S.A.		28,453,193		21,432,596
Affiliates		168,182		4,909,706
Other		102,015		184
Prepaid expenses		3,720,736		3,301,193
Total current assets	$	49,656,850	$	43,025,611
Restricted cash and cash equivalents		11,363,261		11,962,817
Property, plant and equipment, net		150,233,124		162,245,782
Deferred costs, net		4,389,425		4,882,835
Other assets		67,271		68,359
Total assets	$	215,709,931	$	222,185,404
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable:
Trade	$	619,050	$	279,837
Affiliates		418,241		668,257
Accrued liabilities		7,362,154		9,008,448
Value-added tax payable		2,991,210		1,382,862
Foreign taxes payable		884,000		1,314,134
Interest payable		1,251,786		1,393,427
Current portion of notes payable		11,868,132		11,868,132
Total current liabilities	$	25,394,573	$	25,915,097
Notes payable		94,945,055		106,813,187
Deferred foreign income tax		19,626,000		16,421,000
Shareholders’ equity:
Common stock, class A, $1 par value, 25,000 shares authorized, issued and outstanding		25,000		25,000
Common stock, class B, $1 par value, 12,500 shares authorized, issued and outstanding		12,500		12,500
Additional paid-in capital		60,516,037		60,516,037
Retained earnings		15,190,766		12,482,583
Total shareholders’ equity		75,744,303		73,036,120
Total liabilities and shareholders’ equity	$	215,709,931	$	222,185,404

See accompanying notes.

2

WilPro Energy Services (El Furrial) Limited

Statements of Income

	Year ended December 31
	2004			2003
Revenues	$	63,231,208		$	51,347,732
Operating expenses		14,150,862			11,657,229
Depreciation		12,212,632			12,316,591
General and administrative expenses		2,492,277			2,333,847
Total costs and expenses		28,855,771			26,307,667
Operating income		34,375,437			25,040,065
Other (income) expense:
Interest expense		11,118,652			12,234,247
Foreign currency transaction losses, net		738,236			111,470
Other income, net		(278,634	)		(155,443	)
		11,578,254			12,190,274
Income before foreign income tax		22,797,183			12,849,791
Provision for foreign income tax		4,089,000			4,451,000
Net income	$	18,708,183		$	8,398,791

See accompanying notes.

3

WilPro Energy Services (El Furrial) Limited

Statements of Shareholders’ Equity

					Additional
	Common Stock				Paid-In		Retained
	Class A		Class B		Capital		Earnings			Total
Balance, December 31, 2002	$	25,000	$	12,500	$	60,516,037	$	8,083,792		$	68,637,329
Net income		—		—		—		8,398,791			8,398,791
Dividends		—		—		—		(4,000,000	)		(4,000,000	)
Balance, December 31, 2003		25,000		12,500		60,516,037		12,482,583			73,036,120
Net income		—		—		—		18,708,183			18,708,183
Dividends		—		—		—		(16,000,000	)		(16,000,000	)
Balance, December 31, 2004	$	25,000	$	12,500	$	60,516,037	$	15,190,766		$	75,744,303

See accompanying notes.

4

WilPro Energy Services (El Furrial) Limited

Statements of Cash Flows

	Year ended December 31
	2004			2003
Operating Activities
Net income	$	18,708,183		$	8,398,791
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		12,212,632			12,316,591
Amortization of deferred costs		493,410			706,474
Gain (loss) on sale of property, plant and equipment		—			1,161
Deferred foreign income taxes		3,205,000			3,131,000
Changes in operating assets and liabilities:
Accounts receivable – trade and other		(7,122,428	)		(10,295,950	)
Value-added tax payable		1,608,348			(19,740	)
Foreign taxes payable		(430,134	)		74,134
Prepaid expenses		(419,543	)		354,687
Other assets		1,088			3,502
Trade accounts payable		339,213			(416,338	)
Receivables/payables with affiliates		4,491,508			(4,494,447	)
Accrued liabilities		(1,646,294	)		6,690,563
Interest payable		(141,641	)		(140,033	)
Net cash provided by operating activities		31,299,342			16,310,395
Investing Activities
Purchases of property, plant and equipment		(199,974	)		(181,306	)
Net cash used by investing activities		(199,974	)		(181,306	)
Financing Activities
Payments of notes payable		(11,868,132	)		(11,868,132	)
Dividends paid		(16,000,000	)		(4,000,000	)
Changes in restricted cash		(3,268,488	)		(3,244,334	)
Net cash used by financing activities		(31,136,620	)		(19,112,466	)
Net decrease in cash and cash equivalents		(37,252	)		(2,983,377	)
Cash and cash equivalents, beginning of year		432,225			3,415,602
Cash and cash equivalents, end of year	$	394,973		$	432,225
Supplemental Disclosures of Cash Flow Information
Foreign income taxes paid	$	1,137,527		$	1,035,890
Interest paid	$	10,766,882		$	11,888,218

See accompanying notes.

5

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements

December 31, 2004 and 2003

1. Organization and Description of Business

WilPro Energy Services (El Furrial) Limited, (the Company) was incorporated in the Cayman Islands in February 1997. The Company provides installation, engineering, procurement and construction services, as well as operation and maintenance services for natural gas compression facilities at El Furrial oil field, property of PDVSA Petróleo, S.A. (PDVSA), formerly PDVSA Petróleo y Gas, S.A., in Venezuela. Williams International El Furrial Limited, a subsidiary of Williams International Company, owns all 25,000 outstanding Class A common shares, and Production Operators Cayman, Incorporated, a subsidiary of Hanover Compression Limited Partnership, owns all 12,500 Class B common shares of the Company.

Williams International Company and Production Operators Cayman, Incorporated entered into a services contract with PDVSA. The Company subsequently assumed the rights and obligations held by Williams International Company and Production Operators Cayman, Incorporated under the services contract. Under the terms of the contract, the Company designed and built a high pressure and medium pressure natural gas compression plant and renders natural gas compression services on behalf of PDVSA at the Company’s own expense and risk. The contract has a 15-year term for the medium pressure plant and 20-year term for the high pressure plant. The services rendered by the Company generate a service fee from PDVSA, which is the Company’s primary source of revenue. The Company does not require collateral for credit extended to PDVSA. At the end of the contract, PDVSA has the option to 1) renew the current service agreement, allowing the Company to retain ownership of the assets, 2) purchase the El Furrial assets at book value, which is expected to be an insignificant amount, and either retain the Company under an operations and management agreement or terminate its relationship with the Company, or 3) require the Company to dismantle the assets and restore the land to its original condition.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in those financial statements and accompanying notes. Actual results could differ from those estimates and assumptions.

6

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents include demand and time deposits, certificates of deposit and other marketable securities with maturities of three months or less when acquired.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents within current assets consists primarily of bank accounts restricted under the Company’s loan agreement with Overseas Private Investment Corporation (OPIC) (see Note 6) for receipt of revenue, payment of operating and maintenance expenses, distributions to shareholders and funding for the next quarterly debt principal and interest payment. Restricted cash and cash equivalents within noncurrent assets consists primarily of bank accounts restricted under the loan agreement with OPIC for six months of principal and interest payments and an uninsured loss reserve. The Company does not expect these cash and cash equivalents to be released within the next twelve months.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. No allowance for doubtful accounts is recognized at the time the revenue, which generates the accounts receivable, is recognized. An allowance for doubtful accounts is not common for the Company as it only has one customer. However, management assesses the collectibility of accounts receivable based on existing economic conditions, and contractual terms with its client. Receivables are considered past due if payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted.

7

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Property, Plant and Equipment

Property, plant and equipment is carried at cost. The carrying value of these assets is also based on estimates, assumptions and judgments relative to capitalized costs, useful lives and salvage values. Improvements increasing useful lives are added to the cost of the corresponding assets, while the cost of repairs and maintenance are charged to expense as incurred. All spare parts inventory items in excess of $2,500 are capitalized and recorded at historical cost and expensed upon usage. Depreciation is recorded using the straight-line method over estimated useful lives. An estimated useful life of 15 to 20 years is used for natural gas compression plant facilities and an estimated useful life of 5 years is used for all other property, plant and equipment.

Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Company has not recorded an asset retirement obligation based on a 100% probability assessment that PDVSA, under the contract terms, will obtain the El Furrial facility and assume all retirement obligations at the end of the contract term.

In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143, to clarify certain terms and requirements of SFAS No. 143. The Company does not anticipate any material impact to its financial position or results of operations in 2005.

Revenue Recognition Policy

The Company recognizes revenue for services in the period they are performed based on contractual terms and associated volumes.

Impairment of Long-lived Assets

The evaluation for impairment of assets is done on an individual asset or asset group basis when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When such a determination has been made, management’s estimate of undiscounted future cash flows attributable to the assets is

8

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

compared to the carrying value of the assets to determine whether impairment has occurred. If an impairment of the carrying value has occurred, the amount of the impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.

Provision for Severance Benefits

The Company is liable for employee severance benefits, which are a vested right of workers under the Venezuelan Labor Law. These benefits are accrued as service is rendered and transferred monthly to a trust fund on behalf of each worker.

Foreign Currency

The functional currency of the Company is the U.S. dollar. Transactions denominated in currencies other than the U.S. dollar are recorded based on exchange rates at the time such transactions take place. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the statements of income.

Income Taxes

Deferred foreign income tax is computed using the liability method and is provided on all temporary differences between the financial basis and tax basis of the Company’s assets and liabilities. Management’s judgment and income tax assumptions are used to determine the levels, if any, of valuation allowances associated with deferred foreign tax assets.

3. Risks and Uncertainties

The Company relies on the Venezuelan oil and natural gas industry and is exposed to the operating, geographical and financial risks relevant to this industry. Geographical risks are generated by the political, legal, social and economic conditions of the country. Throughout 2004 and 2003, Venezuela endured abnormal levels of instability in the economic, political, and social environment. On February 4, 2003, the Venezuelan government established a currency exchange control. As a result, there was a 14 percent devaluation of the Venezuelan Bolivar with respect to the U.S. Dollar during 2003 and a 20 percent devaluation in 2004. The exchange rate at December 31, 2004 and 2003 was 1920 and 1600 Venezuelan Bolivars to 1 U.S. dollar, respectively.

9

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

3. Risks and Uncertainties (continued)

Since December 31, 2004, the Venezuelan Bolivar has declined an additional 12 percent to 2150 in March 2005. The impact of the devaluation on the Company’s financial statements is minimized by the fact that the Company holds most of its cash in U.S. Dollars.

In December 2002, a national strike was initiated that included the majority of the economic and productive sectors, including the oil industry, which contributes a substantial amount of foreign currency income to the country. The national strike continued until the beginning of February 2003. This situation has caused a strong economic tapering in the business environment resulting in shortages of consumer products and fuel. In addition, PDVSA experienced considerable changes in management and organizational structure. However, the Company’s operations were proven to be critical and strategic to the oil production of PDVSA during and in the period since the national strike ended.

The Venezuelan economy has been considered hyper-inflationary in the past, but it was no longer considered hyper-inflationary as of January 1, 2002. The inflation rate for Venezuela was 19 percent in 2004, compared to 27 percent in 2003, and 31 percent in 2002. The impact of inflation on the Company’s financial results is minimized by contractual terms that allow for tariff increases commensurate with inflation.

There is no certainty of the future political and economic conditions or the impact changes in such conditions may have on laws affecting taxes, exchange rates, currency convertibility, environmental and labor regulations, repatriation of profits and capital return. If the current conditions persist, the Company’s economic, financial and operational capacity could be somehow affected, as well as its organizational structure. However, the conditions in the Company’s contract with PDVSA provide for adjustments for inflation, tariffs paid to the Company in U.S. dollars, and minimum tariffs when PDVSA’s volumes are low. As a result, management believes the impact should not be significant.

During 2003 the Company received payment of U.S. $8.1 million in Venezuelan Bolivars related to May and June U.S. Dollar invoices. Under the contract terms with PDVSA, these were required to be paid in U.S. Dollars because of the exchange controls currently in place preventing the exchange of Bolivars into U.S. Dollars. The Company is negotiating the return of the Bolivars to PDVSA in exchange for U.S. Dollars. At December 31, 2004, the Company has an $8.1 million receivable for the U.S. Dollars and a $6.8 million payable for the Bolivars on the balance sheet. The payable has decreased due to devaluation of the Venezuelan Bolivar.

10

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

3. Risks and Uncertainties (continued)

The Company has $11.8 million in accounts receivable at December 31, 2004 due to labor escalation related to May 2003 through December 2004 services. Such amount is based on contractual terms; however, PDVSA is disputing the index used in the calculation of this escalation. The index used has remained the same since the start of the contract. In February 2005, the Company collected 54% of this receivable for May 2003 through March 2004 for the High Pressure Plant and through May 2004 for the Medium Pressure Plant. The Company believes this receivable will be collected in full.

4. Related Party Transactions

The Company receives technical assistance from Hanover Compression Limited Partnership and Williams International Company, a subsidiary of The Williams Companies, Inc. During 2004 and 2003, Hanover Compression Limited Partnership and Williams International Company did not charge the Company for the technical assistance they provided.

The Company reimburses shareholders and affiliated companies (including the following subsidiaries of Williams International Company: WilPro Energy Services (PIGAP II) Limited, and Williams International Services Company) for amounts remitted and expenses incurred on behalf of the Company. In addition, the Company receives reimbursements from shareholders and affiliated companies for amounts the Company has remitted on their behalf.

Receivables and payables with shareholders and other affiliated companies at December 31 are as follows:

	2004		2003
Accounts receivable:
WilPro Energy Services (PIGAP II) Limited	$	168,182	$	4,164,004
Williams International Services Company		—		745,702
	$	168,182	$	4,909,706
Accounts payable:
Williams International Services Company	$	298,187	$	—
Williams International Venezuela Limited		120,054		668,257
	$	418,241	$	668,257

11

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

5. Property, Plant and Equipment

At December 31, property, plant and equipment are as follows:

	2004			2003
Natural gas compression plant facilities	$	221,364,248		$	221,364,222
Spare parts		443,300			415,352
Vehicles		539,416			479,035
Leasehold improvements		510,411			438,022
Computer software and equipment		505,586			472,798
Other		660,230			653,788
		224,023,191			223,823,217
Accumulated depreciation		(73,790,067	)		(61,577,435	)
	$	150,233,124		$	162,245,782

6. Notes Payable

At December 31, long-term notes payable are represented as follows:

	2004		2003
Overseas Private Investment Corporation:
9.45% note payable, due in equal quarterly principal payments of $2,678,571 plus interest, maturing November 15, 2013	$	96,428,572	$	107,142,857
9.17% note payable, due in equal quarterly principal payments of $288,462 plus interest, maturing November 15, 2013		10,384,615		11,538,462
		106,813,187		118,681,319
Current portion		11,868,132		11,868,132
	$	94,945,055	$	106,813,187

12

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

6. Notes Payable (continued)

These notes are secured by the physical assets and common stock of the Company. Under the terms of the agreement, the Company maintains various restricted bank accounts. The use of each account is restricted for a specific use including receipt of revenue, payment of operating and maintenance expenses, debt service, uninsured loss reserve, and distributions to shareholders. The loan agreement with OPIC contains various other restrictive covenants and commitments, including limitations on additional indebtedness, payment of dividends and asset sales.

Aggregate minimum maturities of long-term debt total $11,868,132 for each of the next five years.

7. Income Taxes

The Company is subject to Venezuelan corporate income taxes at a 34 percent tax rate on taxable income. Taxable income differs from financial income principally due to adjustments for the difference in reporting currency for book and tax purposes, differences in depreciable lives, and certain permanent differences. Tax losses may be carried forward three years. Venezuelan tax law required a company that had been operational for more than three years to pay the higher of income tax or business asset tax. Business asset tax was assessed at one percent of the average value of the Company’s assets revalued for tax purposes and was repealed as of September 1, 2004.

13

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

7. Income Taxes (continued)

Significant components of deferred taxes at December 31 are as follows:

	2004		2003
Deferred tax liabilities:
Property, plant and equipment	$	17,965,000	$	14,760,000
Debt financing costs		1,661,000		1,661,000
Total deferred tax liabilities		19,626,000		16,421,000
Deferred tax assets:
Investment tax credit carryforward (ITC)		—		1,062,000
Business asset tax carryforward (BAT)		—		2,709,000
Net operating loss carryforward (NOL)		—		1,673,000
		—		5,444,000
Valuation allowance		—		(5,444,000	)
Total deferred tax assets		—		—
Net deferred tax liability	$	19,626,000	$	16,421,000

For the year 2003 the Company applied a valuation allowance against its investment tax credit carryforwards, business asset tax carryforwards, and net operating loss carryforward. The valuation allowance was established because management was unable to conclude that it is more likely than not that they will be realized during the carryforward period due to the Company’s current tax paying position and the uncertainty associated with the impact of inflation accounting and currency devaluation.

In 2003, the Company’s foreign income tax of $4,451,000 consisted of business asset tax of $1,320,000 and deferred provision of $3,131,000. In 2004, the foreign income tax of $4,089,000 consists of foreign income tax of $884,000 and deferred provision of $3,205,000. In 2004, the Company’s effective tax rate is less than the expected statutory rate primarily due to inflation adjustments offset by NOL carryforwards of $4,886,000 and, ITC and BAT credits utilized of $3,757,000. At December 31, 2004 the Company adjusted the ITC, BAT and NOL carryforwards for inflation, which resulted in an increase in the carryforward balances in the amount of $1,389,000.

As a result of the full utilization of the NOL, ITC and BAT credit carryovers and current year ITC there are no carryforwards to the year 2005.

14

WilPro Energy Services (El Furrial) Limited

Notes to Financial Statements (continued)

8. Financial Instruments

The Company used the following methods and assumptions in estimating its fair-value disclosures for financial instruments:

Cash and cash equivalents and restricted cash and cash equivalents: The carrying amounts reported in the balance sheet approximate fair value due to the short-term maturity of the underlying instruments.

Notes payable: The fair value of the long-term notes was determined based on prices of similar securities with similar terms and credit ratings. The Company used the expertise of an outside investment banking firm to estimate the fair value of the notes.

	2004						2003
	Carrying						Carrying
Asset (liability)	amount			Fair value			amount			Fair value
Cash and cash equivalents	$	394,973		$	394,973		$	432,225		$	432,225
Restricted cash and cash equivalents		28,181,012			28,181,012			24,912,524			24,912,524
Notes payable		(106,813,187	)		(134,285,092	)		(118,681,319	)		(157,715,783	)

15