Smith International Acquires United Engineering

Smith International, Inc. has acquired a majority interest in United Engineering Services LLC. UES, a company incorporated in Oman, also owns a majority interest in Cameron Services Middle East LLC, ("CSME"). Smith purchased the majority interest in UES which generated revenues of approximately $51 million for the twelve month period ended June 30, 2001, from a holding company owned by the Cupola Group.

UES is primarily engaged in the business of providing engineering and manufacturing services to the oil, gas, and water industries in Oman. UES also offers equipment sales and after-market support services, equipment refurbishing and repairs, rental of specialty oil well drilling and fishing tools. CSME, a joint venture with Cooper Cameron, provides refurbishment, sales, and some local manufacturing of blow-out preventers, manifolds, valves, wellhead systems and related equipment in Oman.

Smith International's Smith Services Red Baron Group has had a long relationship with UES via a technical services agreement to provide management of the Petroleum Development Oman ("PDO") Drilling Equipment Services Moveable Contract. In the last year, UES has also provided infrastructure to support the Smith Services Red Baron Group's PDO Fishing and Milling Contract and the Multi-Lateral Contract. This acquisition will be operated under the Smith Services business unit.

Richard Werner, President of Smith Services, commented, "This acquisition of the majority interest in UES will allow us to become more involved with the actual management of the various contracts currently held by UES and/or Smith Services Red Baron Group. In the past, non-oilfield companies have held a majority interest in UES and CSME. With management of UES now held by a major oilfield service company, we expect our Oman operations to be more aligned with the needs of our customers. In addition, UES provides a solid base for future growth of Smith Services in Oman."


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