Varco Acquires Oilfield Services Business of ICO Inc.

Varco International Inc. has completed its acquisition of substantially all of the oilfield services business of ICO Inc. Subject to post-closing adjustments for changes in working capital, Varco paid $137 million in cash for the assets of the business, including the stock of ICO's oilfield services operating subsidiary in Canada.

ICO's oilfield services business provides inspection, coating and reconditioning of drillpipe, tubing, casing and sucker rods used in oil and gas operations. Additionally, it sells and rents equipment and supplies used in the inspection of tubular goods and sucker rods. The business operates in the United States, Canada, Mexico, Europe and Southeast Asia, with approximately 900 employees. The oilfield service business of ICO to be acquired in the transaction generated approximately $125 million in sales and $18 million in operating profit in ICO's fiscal year ended Sept. 30, 2001.

Tubular goods used in the oilfield are often inspected to identify defects which may lead to premature failure downhole, and are sometimes coated to prevent corrosion or improve flow characteristics. Sucker rods are used to connect downhole pumps with pump jacks at the surface, to lift oil out of the ground.

"ICO's strong oilfield services franchise further strengthens Varco's Tuboscope worldwide tubular services business, and will enable us to provide better, more comprehensive service to our customers," noted George Boyadjieff, chairman and chief executive officer of Varco. "It provides Tuboscope an entrance into the sucker rod market, and will enable us to achieve better efficiencies and reduce costs in the combined operations." The Company has stated that it expects to achieve annual cost savings of approximately $6 million as a result of combining operations.