##### Table of Contents



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 1934For fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file
    no. 1-13071
 Hanover Compressor
    Company
 (Exact name of registrant as
    specified in its charter)
  Delaware

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

(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 RegisteredCommon Stock, $.001 par value

New York Stock Exchange8.625% Senior Notes due 2010

New York Stock Exchange9.0% Senior Notes due 2014

New York Stock Exchange7.5% Senior Notes due 2013

New York Stock Exchange   Securities registered pursuant to 12(g) of the Act:
 Title of class: None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ




---



##### 



TABLE
    OF CONTENTS
  PART IIIItem 10.

Directors,
    Executive Officers and Corporate Governance


2Item 11.

Executive
    Compensation


5Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


23Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


27Item 14.

Principal
    Accounting Fees and Services


28PART IVItem 15.

Exhibits, Financial
    Statement Schedule


29Consent of PricewaterhouseCoopers LLPConsent of Ernst & Young LLPConsent of Ernst & Young LLPCertificate of Chief Executive Officer - Rule 13a-14(a)/15d-14(a)Certificate of Chief Financial Officer - Rule 13a-14(a)/15d-14(a)Certificate of Chief Executive Officer - Section 906Certificate of Chief Financial Officer - Section 906Financial Statements of WilPro Energy Services (PIGAP II)Financial Statements of WilPro Energy Services (El Furrial)   1




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##### Table of Contents



EXPLANATORY
    NOTE
  Form 10-K/A Rule 3-09 Regulation S-X Form 10-K
   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
  http://www.hanover-co.com. and/or
  Directors
    I. Jon Brumley,
  Ted Collins, Jr.,
  Margaret K. Dorman,
 2




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##### Table of Contents



Robert R. Furgason,
  Victor E. Grijalva,
  Gordon T. Hall,
  John E. Jackson,
  Peter H. Kamin,
  William C. Pate,
  Stephen M. Pazuk,
 3




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##### Table of Contents



L. Ali Sheikh,
  Audit
    Committee
  Purpose.
  Members.
          Section 16(a)
    Beneficial Ownership Reporting Compliance
   4




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##### Table of Contents



Item 11.
    Executive
    Compensation  Compensation
    Discussion and Analysis
  Compensation
    Philosophy and Objectives
      Elements
    of Compensation
      Role
    of Our Compensation Consultant
    Role
    of Our Executive Officers in Compensation
    Decisions
   5




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##### Table of Contents



Determining
    Executive Compensation
  th th
   6




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##### Table of Contents



Base
    Salaries
    Annual
    Performance-Based Incentive Compensation
    Annual
    Performance Objectives  2006
  Weight of


Performance

Performance

PayoutPerformance Measure

Measure


Level

Objectives

RangeCorporate Performance
    Objectives


50
%EBITDA  earnings before
    interest,





Below Threshold




0
%tax, depreciation and amortization





Threshold

$330 million


7.5
%Target

$365 million


15.0
%Maximum

$400 million


22.5
%ROCE  return on capital
    employed





Below Threshold




0
%Threshold

6.20%


7.5
%Target

7.80%


15.0
%Maximum

9.30%


22.5
%EPS  earnings per share





Below Threshold




0
%Threshold

$0.10


10.0
%Target

$0.23


20.0
%Maximum

$0.35


30.0
%Individual Performance
    Objectives


50
%Tailored to each individuals
    responsibilities 
    to reflect operational, strategic and financial objectives
    established as part of the annual planning process  7




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##### Table of Contents



deduction
  
    EBITDA  $384.5 million
    ROCE  8.63%
    EPS  $0.56    2006 AnnualPerformance-BasedIncentiveName

CompensationJohn E. Jackson

$
800,000Lee E. Beckelman

$
200,000Brian A. Matusek

$
215,000Norman A. Mckay

$
215,000Steven W. Muck

$
170,000Gary M. Wilson

$
215,000   Long-Term
    Incentive Compensation
    Form 10-K/A
 8




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##### Table of Contents




    Restricted Stock/Restricted Stock Units.  50%
    of the total LTI Award to executives and key employees in 2006
    was in the form of time-vested restricted stock (or restricted
    stock units, in the case of executives and certain key employees
    subject to
    non-U.S. tax
    regulations) that vest at the rate of one-third per year on each
    anniversary from the date of grant over a period of three years.
    Restricted stock aids in retention, which was identified in
    early 2006 as a key objective of Hanovers compensation
    program. In addition, these awards were granted in order to
    build direct ownership of Hanover shares and to align employee
    and stockholder interests since the value of restricted stock
    moves in tandem with Hanovers market value.
    Performance-Based Restricted Stock/Restricted Stock
    Units.  50% of the total 2006 LTI Award to
    executives and key employees was in the form of
    performance-based restricted stock (or performance-based
    restricted stock units, in the case of executives and certain
    key employees subject to
    non-U.S. tax
    regulations). The performance-based restricted stock and
    restricted stock unit awards cliff vest at the end of a
    three-year performance period subject to the achievement of
    pre-determined corporate performance objectives with payouts
    that could range between 0% to 200% of the target payout.      Long-Term
    Performance Objectives  Three Year Period Commencing
    July 2006
  Threshold


Target


MaximumROCE Performance Objective


6.0
%


7.5
%


9.5
%Payout (as a percentage of Target)


50
%


100
%


200
%       added
 9




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##### Table of Contents



pay-in-kind deducted
  Practices
    Relating to Long-Term Incentive Awards
        
    The delegation applies to grants of restricted stock and
    stock-settled restricted stock units only (no stock options may
    be granted);
    The number of shares that can be awarded to any one individual
    and the aggregate number of shares that may be awarded within a
    twelve-month period is restricted;
    No grants will be made to a Section 16 officer;
    No grants will be made retroactively (i.e., they are considered
    effective on the date of hire or promotion); and
    All grants are required to be regularly reported to the
    Compensation Committee.    Chief
    Executive Officer Compensation
    Base Salary.
 10




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##### Table of Contents



Annual Performance-Based Incentive
    Compensation.
  
    Performance on corporate objectives for EBITDA, ROCE and EPS
    comprised 50% of Mr. Jacksons total annual incentive
    award. Taken together, the corporate objectives for 2006 were
    achieved at 136.5% of target.
    Performance on personal objectives comprised the remaining 50%
    of Mr. Jacksons total annual incentive award. The
    Compensation Committee determined, with concurrence from the
    independent members of the board of directors, that
    Mr. Jackson achieved his personal objectives at 150% of
    target. Mr. Jackson achieved the following results in
    connection with his personal objectives for 2006:  
    Reduced selling, general and administrative expenses to 12.2% of
    revenue and other income in 2006 as compared to 13.3% in 2005;
    Improved average margins for new installations;
    Reduced Hanovers total recordable incident rate, or
    TRIR, and serious incident rate, or
    STIR, by 10%;
    Institutionalized Hanovers Trade Control Practices through
    new policies, procedures and management training;
    Completed site visits to all international Geographical Business
    Units and met with at least six international clients;
    Engaged in employee development activities and strengthened
    mid-level management through training and strategic hiring;
    Analyzed strategic options available to Hanover; and
    Developed Hanovers Eastern Hemisphere oil and gas
    fabrication capabilities.  Long-Term Incentive Award.
  
    A grant of 61,500 shares of restricted stock, which
    represents 50% of Mr. Jacksons total 2006 LTI Award.
    The restricted stock is subject to vesting at the rate of
    one-third per year on each anniversary from the date of grant
    over a period of three years.
    A performance-based restricted stock award consisting of
    61,500 shares if earned at target (or 123,000 shares
    if earned at maximum), which represents 50% of
    Mr. Jacksons 2006 LTI Award. The performance-based
    award cliff vests at the end of a three-year performance period
    pursuant to the achievement of a pre-determined corporate
    objective with a payout that could range between 0 and 200% of
    target. The performance measure recommended by the Compensation
    Committee and 11




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##### Table of Contents



approved by the Board of Directors is based upon Hanovers
    average ROCE over the performance period as described under
     Long-Term Incentive Compensation above.    Severance
    and Change of Control Arrangements
         12




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##### Table of Contents



Stock
    Ownership Guidelines
  Rule 10b5-1
    
    Chief Executive Officer and Chief Financial Officer 
    50% of the net shares acquired (after taking into account the
    sale of shares to cover the option exercise price
    and/or to
    pay taxes) must be held for a period of three years following an
    option exercise or vesting of restricted stock awards.
    Section 16 officers and direct reports to the Chief
    Executive Officer  33% of the net shares acquired
    (after taking into account the sale of shares to cover the
    option exercise price
    and/or to
    pay taxes) must be held for one year following an option
    exercise or vesting of restricted stock awards.    Limitation
    of Tax Deduction for Executive Compensation
    Compensation
    Committee Interlocks and Insider Participation
    Compensation
    Committee Report
  Regulation S-K Form 10-K.
  
      13




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##### Table of Contents



Information
    Regarding Executive Compensation
  Summary
    Compensation Table
  Form 10-K/A
  Change inPensionNon-Equity

Value andOption

Incentive

NonqualifiedStock

Awards

Plan

Deferred

All OtherName and Principal Position



Salary



Awards

($)(1)

Compensation

Compensation

Compensation(a)

Year(b)

($)(c)

Bonus($)(d)

($)(1)(e)

(f)

($)(2)(g)

Earnings($)(h)

($)(i)

Total($)(j)John E. Jackson(3)


2006



552,019



0



1,279,170



142,785



1,320,000



0



14,311



3,308,285President and Chief Executive
    OfficerLee E. Beckelman(4)


2006



274,039



0



231,790



39,758



320,000



0



8,368



873,955Senior Vice
    President  Chief Financial OfficerBrian A. Matusek(5)


2006



291,827



0



289,633



35,027



335,000



0



6,505



957,992Senior Vice
    President  Western HemisphereNorman A. Mckay(6)


2006



291,827



8,400



124,908



22,017



308,333



0



76,233



831,718Senior Vice
    President  Eastern HemisphereSteven W. Muck(7)


2006



237,019



0



254,422



51,816



263,333



0



8,368



814,958Vice President  Human
    Resources and HSEGary M. Wilson(8)


2006



302,212



0



257,970



36,465



308,333



0



99,506



1,004,486Senior Vice President, General
    Counsel &
    Secretary     (1)
    
    The value of restricted stock and option awards are based on the
    dollar amount expensed for financial statement reporting
    purposes for the fiscal year ended December 31, 2006, in
    accordance with FAS 123(R) (other than estimated
    forfeitures, which are not considered in the above table), and
    includes amounts attributable to vesting of awards granted each
    year from 2002 through 2006. Assumptions used in the calculation
    of these amounts are included in the footnotes to the financials
    statements included in Hanovers Annual Report on
    Form 10-K.
    The actual value of restricted stock ultimately realized by each
    executive will vary based on fluctuations in the market price of
    Hanovers common stock. If Hanover declares a dividend on
    shares of its common stock, holders of Hanovers restricted
    stock will be entitled to receive dividends in an amount per
    share equal to those received by holders of Hanovers
    common stock, without regard to whether the shares of restricted
    stock have vested.(2)
    
    This amount includes (i) a cash award paid in March 2007
    under Hanovers 2006 annual performance-based incentive
    program (the Hanover 2006 Incentive Program) and
    (ii) the amount accrued during 2006 pursuant to a cash
    performance-based award under the Hanover 2005 Long-Term
    Incentive Program (the Hanover 2005 LTI Program) as
    follows:  Cash Payment Under


Accrual UnderNamed Executive Officer

2006 Incentive Program


2005 LTI ProgramJohn E. Jackson

$
800,000


$
520,000Lee E. Beckelman


200,000



120,000Brian A. Matusek


215,000



120,000Norman A. Mckay


215,000



93,333Steven W. Muck


170,000



93,333Gary M. Wilson


215,000



93,333  14




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##### Table of Contents



(3)
    
    The amount set forth under All Other Compensation
    for 2006 includes (i) $13,443 company match in the
    Hanover 401(k) Plan (subject to vesting requirements applicable
    to all participants) and (ii) $868 in premiums paid by
    Hanover for group term life and accidental death and disability
    insurance.(4)
    
    The amount set forth under All Other Compensation
    for 2006 includes (i) $7,500 company match in the
    Hanover 401(k) Plan (subject to vesting requirements applicable
    to all participants) and (ii) $868 in premiums paid by
    Hanover for group term life and accidental death and disability
    insurance.(5)
    
    The amount set forth under All Other Compensation
    for 2006 includes (i) $5,637 company match in the
    Hanover 401(k) Plan (subject to vesting requirements applicable
    to all participants) and (ii) $868 in premiums paid by
    Hanover for group term life and accidental death and disability
    insurance.(6)
    
    The amount set forth under All Other Compensation
    for 2006 includes (i) $4,935 company match in the
    Hanover 401(k) Plan (subject to vesting requirements applicable
    to all participants), (ii) $3,018 in premiums paid by
    Hanover for group term life and accidental death and disability
    insurance, (iii) $4,511 auto allowance, (iv) $29,405
    housing allowance, (v) $3,948 utilities, (vi) $10,000
    relocation expense; (vii) $16,683 education allowance,
    (viii) $2,635 travel allowance and (ixi) $1,098 for
    club dues. Reimbursements for auto, housing, utilities education
    allowance, travel allowance and club dues reflect currency
    exchange rate adjustments from Arab Emirates dirham (AED) to
    U.S. dollars. The exchange rate is provided by Oanda.com
    and is based on the average exchange rate during 2006 of 3.67
    U.S. dollars for each AED.(7)
    
    The amount set forth under All Other Compensation
    for 2006 includes (i) $7,500 company match in the
    Hanover 401(k) Plan (subject to vesting requirements applicable
    to all participants) and (ii) $868 in premiums paid by
    Hanover for group term life and accidental death and disability
    insurance.(8)
    
    The amount set forth under All Other Compensation
    for 2006 includes (i) $7,500 company match in the
    Hanover 401(k) Plan (subject to vesting requirements applicable
    to all participants, (ii) premiums paid by Hanover for
    group term life and accidental death and disability insurance in
    the amount of $868, (ii) reimbursement of childrens
    overseas tuition expense in the amount of $67,293 which includes
    a gross up amount of $19,277 and (iii) personal travel
    reimbursement in the amount of $23,845 which includes a gross up
    amount of $6,307. Tuition and travel expenses are grossed up to
    a maximum tax rate of 33% and also reflect currency exchange
    rate adjustments from Great Britain pounds to U.S. dollars.
    The exchange rate is provided by a U.K. bank and is based upon
    the rate in effect on the date services were invoiced.   15




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##### Table of Contents



Grants
    Of Plan-Based Awards
    All

AllOther

Other



GrantStock

Option



DateAwards:

Awards:

Exercise

FairEstimated Future Payouts

Number of

Number of

or Base

ValueEstimated Future Payouts

Under Equity Incentive

Shares of

Securities

Price of

of StockUnder Non-Equity Incentive

Plan Awards(1)

Stock or

Underlying

Option

andPlan Awards

Threshold

Target

Maximum

Units

Options

Awards

OptionName

Grant Date

Threshold

Target

Maximum

(#)

(#)

(#)

(#)(2)

(#)

($/SH)

Awards(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(3)John E. Jackson


7/21/2006















30,750



61,500



123,000














$
999,3757/21/2006



























61,500











999,375$
1,998,750Lee E. Beckelman


7/21/2006















7,700



15,400



30,800














$
250,2507/21/2006



























15,400











250,250$
500,500Brian A. Matusek


7/21/2006















7,700



15,400



30,800














$
250,2507/21/2006



























15,400











250,250$
500,500Norman A. Mckay


7/21/2006















7,700



15,400



30,800














$
250,2507/21/2006



























15,400











250,250$
500,500Steven W. Muck


7/21/2006















6,150



12,300



24,600














$
199,8757/21/2006



























12,300











199,8757/28/2006



























15,000











284,400$
684,150Gary M. Wilson


7/21/2006















6,550



13,100



26,200














$
212,8757/21/2006



























13,100











212,875$
425,750     (1)
    
    During 2006, the Compensation Committee recommended and the
    independent members of the board of directors approved as the
    long-term incentive performance measure the average return on
    capital employed (ROCE) achieved over the three-year
    performance period commencing in July 2006. ROCE is calculated
    as (1) earnings before interest and taxes
    (EBIT), divided by (2) the sum of short-term
    debt, current maturities of long-term debt, long-term debt,
    minority interest, stockholders equity, less cash. The
    method used in calculating ROCE for the three-year performance
    period computes the average annualized EBIT over the entire
    period and divides it by the average capital employed. The chart
    on page 9 sets forth the performance measures for ROCE and
    the associated payout at threshold, target and maximum levels.
    The actual payout will range from 0% to 200% of the
    performance-based restricted stock that would have been earned
    at target performance. The performance-based restricted stock is
    subject to cliff-vesting at the end of a three-year performance
    period, which is June 30, 2009. In the event of a change of
    control, the vesting of performance-based restricted stock will
    be accelerated and such awards will be payable at maximum.(2)
    
    Restricted stock awards were granted on July 21, 2006 and
    vest on each anniversary date of grant at the rate of one-third
    per year over a three-year period. In the event of a change of
    control, the vesting of restricted stock awards will be
    accelerated. If Hanover declares a dividend on shares of the
    common stock, holders of restricted stock will be entitled to
    receive such dividends whether or not such shares of restricted
    stock have vested.(3)
    
    The value of restricted stock awards is based on FAS 123(R)
    with performance-based restricted stock valued at target payout.
    The July 28, 2006 award to Mr. Muck was valued at
    $18.96 per share, the New York 16




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##### Table of Contents



Stock Exchange closing price on the grant date; all other
    awards, granted on July 21, 2006, were valued at
    $16.25 per share on the date of grant.  Outstanding
    Equity Awards At Fiscal Year-End
    Option Awards

Stock AwardsEquityIncentiveEquity

PlanIncentive

Awards:Plan

Market orEquity









Awards:

PayoutIncentive









Number of

ValuePlan







Market

Unearned

of UnearnedAwards:





Number of

Value of

Shares,

Shares,Number of

Number of

Number of





Shares or

Shares or

Units

UnitsSecurities

Securities

Securities





Units of

Units of

or Other

or OtherUnderlying

Underlying

Underlying





Stock

Stock

Rights

RightsUnexercised

Unexercised

Unexercised

Option



That

That

That

ThatOptions

Options

Unearned

Exercise

Option

have not

have not

have not

have not(#)

(#)

Options

Price

Expiration

Vested

Vested

Vested

VestedName

Exercisable

Unexercisable

(#)

($)

Date

(#)

($)(1)

(#)

($)(1)(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)John E. Jackson


50,000










$
13.98



1/22/2012



157,614


$
2,977,328



26,125
(4)

$
493,50150,000










$
14.55



5/14/2012











123,000
(5)

$
2,323,47040,000










$
9.81



12/10/201228,432



9,478
(2)





$
11.43



7/16/201310,000



20,000
(3)





$
11.98



7/8/2015Lee E. Beckelman


5,000










$
11.53



12/2/2012



33,422


$
631,342



5,938
(4)

$
112,1692,651



884
(2)





$
11.43



7/16/2013











30,800
(5)

$
581,8125,667



11,333
(3)





$
11.98



7/8/2015Brian A. Matusek


4,216



1,406
(2)





$
10.00



10/22/2013



32,994


$
623,257



8,125
(4)

$
153,4815,667



11,333
(3)





$
11.98



7/8/2015











30,800
(5)

$
581,812Norman A. Mckay


4,334



8,666
(3)





$
11.98



7/8/2015



28,066


$
530,167



30,800
(5)

$
581,812Steven W. Muck


5,456










$
14.55



5/14/2012



38,010


$
718,009



10,000
(4)

$
188,90010,000










$
10.20



11/8/2012











24,600
(5)

$
464,6948,123



2,708
(2)





$
11.43



7/16/20134,334



8,666
(3)





$
11.98



7/8/2015Gary M. Wilson


5,622



5,622
(2)





$
10.38



5/20/2014



27,478


$
519,059



15,000
(4)

$
283,3504,334



8,666
(3)





$
11.98



7/8/2015











26,200
(5)

$
494,918     (1)
    
    Stock awards are valued as of the New York Stock Exchange
    closing price on December 29, 2006, which was $18.89.(2)
    
    Stock options vest on each anniversary date of grant at the rate
    of 25% per year over a four-year period and have a term of
    ten years following the date of grant. In the event of a change
    of control, the vesting of stock options will be accelerated.(3)
    
    Stock options vest on each anniversary date of grant at the rate
    of one-third per year over a three-year period and have a term
    of ten years following the date of grant. In the event of a
    change of control, the vesting of stock options will be
    accelerated.(4)
    
    The performance-based restricted stock awards are reflected at a
    maximum payout of 125% of the target award based on performance
    as of December 31, 2006, relative to the following
    performance measures: (a) cash flow from operations and
    (b) utilization. This three-year performance-based award
    was granted in July 2004 and will cliff vest in September 2007.
    In the event of a change of control, the vesting of
    performance-based restricted stock will be accelerated and such
    awards will be payable at maximum.(5)
    
    The performance-based restricted stock awards are reflected at a
    maximum payout of 200% of the target award based on performance
    as of December 31, 2006, relative to the following
    performance measure: 17




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##### Table of Contents



return on capital employed. This three-year performance-based
    award was granted in July 2006 and will cliff vest in July 2009.
    In the event of a change of control, the vesting of
    performance-based restricted stock will be accelerated and such
    awards will be payable at maximum.  Options
    Exercised and Stock Vested
    Option Awards


Stock AwardsNumber of





NumberShares


Value


of Shares


ValueAcquired on


Realized on


Acquired on


Realized onExercise


Exercise


Vesting


VestingName

(#)


($)


(#)


($)(1)(a)

(b)


(c)


(d)


(e)John E. Jackson










63,447


$
1,099,223.10Lee E. Beckelman










9,190


$
157,212.10Brian A. Matusek










13,761


$
234,801.21Norman A. Mckay










3,334


$
59,211.84Steven W. Muck










7,934


$
140,003.60Gary M. Wilson










9,189


$
158,476.64     (1)
    
    The value realized from the vesting of restricted stock awards
    was equal to the New York Stock Exchange closing price of
    Hanovers common stock on the date of vesting multiplied by
    the number of vesting shares.  Additional
    Arrangements with Management
    Gary M. Wilson.
  Norman A. Mckay.
  Potential
    Payments upon Termination or Change of Control
    
    Good reasonincludes but is not limited to,
    (a) a permanent change in the executives title;
    (b) a permanent change in the executives duties or
    responsibilities which are materially inconsistent with his or
    her title, but excluding any such change that is in conjunction
    with and consistent with a promotion; (c) a reduction in
    the executives base salary; (d) a reduction in the
    executives eligible annual target bonus percentage; or
    (e) a material reduction in the executives employee
    benefits if materially less than the benefits received by
    Hanovers other comparable employees. 18




---



##### Table of Contents




    Cause includes but is not limited to
    (a) the commission by the executive of an act of fraud,
    embezzlement or willful breach of a fiduciary duty to Hanover or
    an affiliate, (b) a conviction or a no contest plea in
    connection with a felony or a crime involving fraud, dishonesty
    or moral turpitude, (c) willful misconduct, or
    (d) failure of the executive to follow the written
    directions of the board of directors or to render services in
    accordance with an employment arrangement.
    Qualifying Termination means a termination of
    an executives employment either (a) by Hanover other
    than for cause or (b) by the executive for
    good reason within twelve months of a consummated
    change of control. The executives death or disability does
    not constitute a qualifying termination of
    employment.      
    the executives earned but unpaid base salary through the
    date of termination plus the executives target bonus for
    the current year (prorated to the date of termination);
    any earned but unpaid actual bonus for the prior year;
    that portion of the executives vacation pay accrued, but
    not used, for the current year to the date of termination;
    for John E. Jackson, the product of three times the sum of his
    base salary and target bonus, and for all other Named Executive
    Officers, the product of two times the sum of his respective
    base salary and target bonus; and
    amounts previously deferred by the executive, if any, or earned
    but not paid, if any, under any Hanover incentive and
    nonqualified deferred compensation plans or programs as of the
    date of termination.     19




---



##### Table of Contents



John E.
    Jackson
 Change of ControlQualifying


Death orExecutive Benefits and Payments Upon Termination

Retirement


Termination(1)


Disability


SeveranceCompensationEarned Bonus(2)





$
565,000







Base Salary and Target Bonus





$
3,390,000






$
1,130,000Long-term Incentives (unvested and
    accelerated)Stock Options(3)

$
208,906


$
208,906


$
208,906



Restricted Stock(4)Performance-Based





$
2,816,971


$
1,556,536



Time Vested





$
2,977,328


$
2,977,328



Cash Performance Award(5)





$
780,000


$
780,000



Benefits and PerquisitesHealth Care(6)





$
21,913






$
21,913Total

$
208,906


$
10,760,118


$
5,522,770


$
1,151,913   Lee E.
    Beckelman
 Change of ControlQualifying


Death orExecutive Benefits and Payments Upon Termination

Retirement


Termination(1)


DisabilityCompensationEarned Bonus(2)





$
150,000



Base Salary and Target Bonus





$
900,000



Long-term Incentives (unvested and
    accelerated)Stock Options(3)

$
84,906


$
84,906


$
84,906Restricted Stock(4)Performance-Based





$
693,981


$
380,634Time Vested





$
631,342


$
631,342Cash Performance Award(5)





$
180,000


$
180,000Benefits and PerquisitesHealth Care(6)





$
21,913



Total

$
84,906


$
2,662,142


$
1,276,882   Brian A.
    Matusek
 Change of ControlQualifying


Death orExecutive Benefits and Payments Upon Termination

Retirement


Termination(1)


DisabilityCompensationEarned Bonus(2)





$
155,000



Base Salary and Target Bonus





$
930,000



Long-term Incentives (unvested and
    accelerated)Stock Options(3)

$
90,810


$
90,810


$
90,810Restricted Stock(4)Performance-Based





$
735,293


$
413,691Time Vested





$
623,257


$
623,257Cash Performance Award(5)





$
180,000


$
180,000Benefits and PerquisitesHealth Care(6)





$
21,913



Total

$
90,810


$
2,736,273


$
1,307,758  20




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##### Table of Contents



Norman A.
    Mckay
 Change of ControlQualifying


Death orExecutive Benefits and Payments Upon Termination

Retirement


Termination(1)


DisabilityCompensationEarned Bonus(2)





$
155,000



Base Salary and Target Bonus





$
930,000



Long-term Incentives (unvested and
    accelerated)Stock Options(3)

$
59,882


$
59,882


$
59,882Restricted Stock (Time Vested)(4)





$
239,261


$
239,261Restricted Stock Units(4)Performance-Based





$
581,812


$
290,906Time Vested





$
290,906


$
290,906Cash Performance Award(5)





$
140,000


$
140,000Benefits and PerquisitesHealth Care(6)





$
22,770



Total

$
59,882


$
2,419,631


$
1,020,955   Steven W.
    Muck
 Change of ControlQualifying


Death orExecutive Benefits and Payments Upon Termination

Retirement


Termination(1)


DisabilityCompensationEarned Bonus(2)





$
125,000



Base Salary and Target Bonus





$
750,000



Long-term Incentives (unvested and
    accelerated)Stock Options(3)

$
80,084


$
80,084


$
80,084Restricted Stock(4)Performance-Based





$
653,594


$
383,467Time Vested





$
718,009


$
718,009Cash Performance Award(5)





$
140,000


$
140,000Benefits and PerquisitesHealth Care(6)





$
21,913



Total

$
80,084


$
2,488,600


$
1,321,560   Gary M.
    Wilson
 Change of ControlQualifying


Death orExecutive Benefits and Payments Upon Termination

Retirement


Termination(1)


DisabilityCompensationEarned Bonus(2)





$
155,000



Base Salary and Target Bonus





$
930,000



Long-term Incentives (unvested and
    accelerated)Stock Options(3)

$
107,725


$
107,725


$
107,725Restricted Stock(4)Performance-Based





$
778,268


$
474,139Time Vested





$
519,059


$
519,059Cash Performance Award(5)





$
140,000


$
140,000Benefits and PerquisitesHealth Care(6)





$
21,913



Total

$
107,725


$
2,651,965


$
1,240,923     (1)
    
    See the definition of Qualifying Termination on
    page 19.(2)
    
    The amounts provided under Earned Bonus represent a
    full year bonus with an assumed payout at target performance. 21




---



##### Table of Contents



(3)
    
    All stock options automatically become fully vested upon a
    change of control or an executives termination of service
    due to his or her death, disability or retirement. The number of
    options unvested and outstanding at year end for each Named
    Executive Officer is provided in column (c) of the table
    captioned Outstanding Equity Awards at Fiscal
    Year-End and the value of such awards has been calculated
    using the market closing price on December 29, 2006. Once
    vested, options are exercisable pursuant to the terms of the
    respective plans under which they were granted.(4)
    
    Upon a change of control or an executives termination of
    service due to his or her death or disability, time-vested and
    performance-based restricted stock and restricted stock units
    become fully vested and the restrictions deemed lapsed. For
    performance-based restricted stock and restricted stock units,
    the performance criteria is deemed to be met at maximum
    performance and payout if due to a change of control, and at
    target performance and payout if termination is due death or
    disability. The number of performance-based restricted
    stock/units and time-vested restricted stock/units that are
    unvested and outstanding at year end for each Named Executive
    Officer is provided in columns (i) and (g), respectively,
    of the table captioned Outstanding Equity Awards at Fiscal
    Year-End and the value of such awards has been calculated
    using the market closing price on December 29, 2006.(5)
    
    The cash performance award granted pursuant to the Hanover 2005
    LTI Program will automatically become fully vested upon a change
    of control or an executives termination of service due to
    his or her death or disability at target performance.(6)
    
    Health care benefits are the reimbursement of COBRA monthly
    premiums for an 18 month period as stated in the
    executives COC Agreement with the exception of Norman
    Mckay who is an international employee and covered under another
    program. The calculations are based on 2007 COBRA premiums.  Director
    Compensation
  Change inPensionValue andNonqualifiedFees Earned








Non-Equity


Deferredor Paid


Stock


Option


Incentive Plan


Compensation


All Other


TotalName

in Cash


Awards


Awards


Compensation


Earnings


Compensation


($)(a)

(b)(1)


(c)(2)


(d)(2)


(e)


(f)


(g)


(h)I. Jon Brumley(3)

$
55,000


$
65,047


$
31,027














$
151,074Ted Collins, Jr.(3)

$
44,000


$
65,047


$
31,027














$
140,074Margaret K. Dorman(5)

$
56,500


$
66,217


$
26,790














$
149,507Robert R. Furgason(3)

$
43,500


$
65,047


$
31,027














$
139,574Victor E. Grijalva(6)

$
49,000


$
87,867


$
90,813














$
227,680Gordon T. Hall(3)

$
150,000


$
65,047


$
31,027














$
246,074Peter H. Kamin(4)


























William C. Pate(4)


























Stephen M. Pazuk(5)

$
58,000


$
66,217


$
26,790














$
151,007L. Ali Sheikh(7)

$
32,500


$
14,670


















$
47,170Alvin V. Shoemaker(8)

$
18,125


$
80,665


$
46,693














$
145,483     (1)
    
    Chair retainer fees reflect the following change in service:
    Stephen Pazuk and Al Shoemaker served as co-chairs of the
    Finance Committee from January to May. Upon
    Mr. Shoemakers retirement in May, Stephen Pazuk
    assumed sole chair of the Finance Committee. Chair retainer fees
    also reflect the following changes that became effective in July
    2006: Audit and Compensation Committee chairs receive $15,000
    annually, paid quarterly; Finance and Governance Committee
    chairs receive $10,000 annually, paid quarterly. Meeting fees
    reflect the following change that became effective in July 2006:
    $1,500 paid for all in-person and telephonic board and committee
    meetings.(2)
    
    The value of restricted stock and option awards are based on the
    dollar amount expensed for financial statement reporting
    purposes for the fiscal year ended December 31, 2006, in
    accordance with FAS 123(R) (other than expected forfeitures
    are not considered in the above table), and includes amounts
    attributable 22




---



##### Table of Contents



to the vesting of awards granted each year from 2002 through
    2006. Assumptions used in the calculation of these amounts are
    included in the footnotes to financial statements included in
    Hanovers Annual Report on Form
    10-K. Except
    to the extent necessary to meet the tax obligation upon vesting,
    restricted stock must be retained by a director until service as
    a director concludes. The actual value of restricted stock
    ultimately realized by each director will vary based on
    fluctuations in the market price of Hanovers common stock.
    If Hanover declares a dividend on shares of the common stock,
    holders of restricted stock will be entitled to receive such
    dividends whether or not such shares of restricted stock have
    vested.(3)
    
    Messrs. Brumley, Collins, Furgason and Hall have 22,185
    stock options outstanding and 12,500 restricted stock awards
    outstanding.(4)
    
    Messrs. Kamin and Pate were elected January 1, 2007.(5)
    
    Mr. Pazuk and Ms. Dorman have 16,000 stock options
    outstanding and 12,500 restricted stock awards outstanding.(6)
    
    Mr. Grijalva has 147,000 stock options outstanding and
    14,500 restricted stock awards outstanding.(7)
    
    Mr. Sheikh was elected March 20, 2006 and has 6,500
    restricted stock awards outstanding.(8)
    
    Mr. Shoemaker retired in May 2006. All unvested stock
    options and restricted stock awards vested upon retirement.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Beneficial
    Ownership of Hanover Common Stock
  5%
    Stockholders
    Number of Shares

ApproximateName and Address of Beneficial Owner

Beneficially Owned

Percent of ClassDimensional Fund Advisors
    Inc.


6,419,310
(1)


6.0
%1299 Ocean Avenue, 11th FloorSanta Monica, California 90401EGI-HC, L.L.C.


9,375,000
(2)


8.8
%Two North Riverside Plaza,
    Suite 600Chicago, Illinois 60606T. Rowe Price Associates,
    Inc.


6,580,100
(3)


6.2
%100 East Pratt StreetBaltimore, Maryland 21202ValueAct Capital Master Fund,
    L.P.


11,604,600
(4)


10.9
%435 Pacific Avenue, Fourth FloorSan Francisco, California
    94133FMR Corp.


10,639,721
(5)


10.0
%82 Devonshire StreetBoston, Massachusetts 02109     (1)
    
    Dimensional Fund Advisors Inc. (Dimensional) is
    an investment advisor registered under Section 203 of the
    Investment Advisors Act of 1940 and as such provides investment
    advice to certain investment companies and serves as investment
    manager to certain commingled group trusts and separate accounts
    (the Funds). In its role as investment advisor or
    manager, Dimensional possesses investment
    and/or
    voting power over the securities of 23




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##### Table of Contents



Hanover that are owned by the Funds and may be deemed to be the
    beneficial owner. All securities reported in the table above are
    owned by the Funds, and Dimensional disclaims beneficial
    ownership of such securities.(2)
    
    EGI-Fund
    (05-07)
    Investors, L.L.C., a Delaware limited liability company
    (Fund 05-07)
    is the managing member of EGI-HC, L.L.C., a Delaware limited
    liability company (EGI-HC). SZ Investments, L.L.C.,
    a Delaware limited liability company (SZI) is the
    managing member of Fund
    05-07. SZI
    is indirectly owned by various trusts established for the
    benefit of Samuel Zell and his family (the Trusts).
    The trustee of each of the Trusts is Chai Trust Company, L.L.C.,
    an Illinois limited liability company (Chai Trust).
    Fund 05-07,
    SZI, EGI-HC and Chai Trust share voting power and dispositive
    power over the shares owned beneficially by them.(3)
    
    T. Rowe Price Associates, Inc. (TRP) reports sole
    voting power with respect to 825,500 shares and sole
    investment power with respect to all shares. TRP serves as an
    investment advisor to individual and institutional clients and
    does not serve as custodian of the assets of any of its clients.
    With respect to securities owned by any one of the registered
    investment companies sponsored by TRP, only State Street Bank
    and Trust Company, as custodian, has the right to receive any
    dividends or proceeds from the sale of such securities. No other
    person is known to have such right, except that the shareholders
    of these funds participate proportionately in any dividends and
    distributions so paid. Any and all discretionary authority that
    has been delegated to TRP may be revoked in whole or in part at
    any time. Not more than 5% of the class of such securities is
    owned by any one client subject to TRPs investment advice.(4)
    
    ValueAct Capital Master Fund III, L.P. directly owns
    1,725,500 shares of Hanover common stock, and these shares
    may also be deemed to be beneficially owned by (i) VA
    Partners III, LLC as General Partner of ValueAct Capital
    Master Fund III, L.P., (ii) ValueAct Capital
    Management, L.P. as the manager of ValueAct Capital Master
    Fund III, L.P. and (iii) ValueAct Capital Management,
    LLC as General Partner of ValueAct Capital Management, L.P.
    Jeffrey W. Ubben, Peter H. Kamin and George F. Hamel, Jr.
    are Managing Members of VA Partners III, LLC and ValueAct
    Capital Management, LLC. The reporting persons share voting and
    dispositive power and disclaim beneficial ownership of the
    reported stock except to the extent of their pecuniary interest
    therein.    (5)
    
    Fidelity Management & Research Company
    (Fidelity), a wholly-owned subsidiary of FMR Corp.,
    is the beneficial owner of 10,170,173 shares of Hanover
    common stock as a result of acting as investment adviser to
    various investment companies (the Funds). Edward C.
    Johnson III and FMR Corp. have sole dispositive power of such
    shares but not voting power. Fidelity carries out the voting of
    the shares under written guidelines established by the
    Funds Boards of Trustees.    Securities
    Owned by Directors and Officers
   24




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##### Table of Contents



Shares


Vested


Unvested











PercentageOwned


Restricted


Restricted


Stock


Indirect


Total


ofName of Beneficial Owner

Directly


Stock(1)


Stock(2)


Options(3)


Ownership


Ownership


OwnershipNon-Employee
    DirectorsI. Jon Brumley


31,000



8,000



12,500



15,185







66,685



*Ted Collins, Jr.


334,631



8,000



12,500



15,185



6,000
(4)


376,316



*Margaret K. Dorman






8,000



12,500



9,000







29,500



*Robert R. Furgason


13,600



8,000



12,500



15,185



400
(5)


49,685



*Victor E. Grijalva


60,000



13,000



14,500



138,333







225,833



*Gordon T. Hall


51,600



8,000



12,500



15,185







87,285



*Peter H. Kamin (elected
    1/1/2007)


















11,604,600
(6)


11,604,600



10.9
%William C. Pate (elected
    1/1/2007)



















(7)






*Stephen M. Pazuk






8,000



12,500



9,000







29,500



*L. Ali Sheikh










6,500











6,500



*OfficersJohn E. Jackson


1,649



104,987



306,739



178,432







591,807



*Lee E. Beckelman


1,000



10,977



67,660



13,318







92,955



*Brian A. Matusek


6,599



24,784



71,919



9,883







113,185



*Norman A. Mckay






9,668



55,532



4,334







69,534



*Steven W. Muck


121



15,362



72,610



27,913







116,006



*Gary M. Wilson






15,117



66,489



12,767







94,373



*All directors and executive
    officers as a group (19 persons)






















13,715,281



12.9
%     *
    
    Less than 1%(1)
    
    Pursuant to Hanovers stock ownership guidelines,
    non-employee directors must retain restricted stock (except for
    sales to provide for the payment of taxes due upon vesting)
    until their service as a director concludes.(2)
    
    Restricted stock awards vest on the anniversary date of grant,
    have no less than a three-year vesting period from the original
    date of grant and are subject to the following terms:  (a)
    Non-employee directors have voting power, but not dispositive
    power (except to the extent necessary to meet the tax obligation
    upon vesting) until their service as a director concludes.  (b)
    Officers have voting power and once vested, dispositive power
    (subject to Hanovers stock ownership guidelines as
    described beginning on page 13).  (3)
    
    Shares that can be acquired immediately or within 60 days
    of April 24, 2007 through the exercise of stock options
    (subject to Hanovers stock ownership guidelines as
    described beginning on page 13).(4)
    
    Shares held in trust for the benefit of Mr. Collins
    two children; Mr. Collins is the trustee of such trust but
    disclaims beneficial ownership.(5)
    
    Shares held by Dr. Furgasons wife. Dr. Furgason
    disclaims beneficial ownership of these shares.(6)
    
    These are shares owned by ValueAct Capital Master Fund, L.P. Due
    to Mr. Kamins position as a Managing Member of VA
    Partners, LLC and ValueAct Capital Management, L.P., he may be
    deemed to beneficially own these shares.(7)
    
    Mr. Pate is Chief Investment Officer of Equity Group
    Investments, L.L.C. (EGI), but disclaims beneficial
    ownership of the shares that are owned by EGI. 25




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##### Table of Contents



EQUITY
    COMPENSATION PLAN INFORMATION
    Weighted-


Number of SecuritiesAverage Exercise


Remaining Available forNumber of Securities to be


Price of


Future Issuance UnderIssued Upon Exercise of


Outstanding


Equity Compensation PlansOutstanding Options,


Options, Warrants


(Excluding SecuritiesWarrants and Rights


and Rights


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved
    by security holders(1)(2)


1,964,368


$
11.93



4,952,224Equity compensation plans not
    approved by Stockholders(3)


396,288


$
12.41



Total


2,360,656


$
12.01



4,952,224     (1)
    
    Composed of the 1997 Stock Option Plan, the 2001 Equity
    Incentive Plan, the 2003 Stock Incentive Plan and the 2006 Stock
    Incentive Plan. In addition to the outstanding options, as of
    December 31, 2006, there were 1,899,024 shares of
    unvested restricted stock
    and/or stock
    settled restricted stock units outstanding (including
    performance shares at maximum potential payout) which were
    granted under the 2003 and 2006 Stock Incentive Plans.(2)
    
    Under the terms of the 2006 Stock Incentive Plan, in addition to
    incentive and non-qualified options, Hanover may grant
    restricted stock, restricted stock units, stock appreciation
    rights and performance-based awards. The following Equity
    Compensation Plans, although terminated as to future grants,
    provided for the following awards in addition to options: the
    1997 Stock Option Plan (restricted stock); the 2001 Equity
    Incentive Plan (restricted stock, although no more than
    1.0 million of the 1.5 million shares authorized under
    such plan could be issued pursuant to restricted stock awards);
    and the 2003 Stock Incentive Plan (restricted stock and
    performance awards).(3)
    
    Composed of the 1998 Stock Option Plan, the December 9,
    1998 Stock Option Plan and the 1999 Stock Option Plan.     26




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##### Table of Contents



Number of SharesOriginal


Shares Previously


Reserved for Issuance


Weighted-


SharesNumber of


Issued Pursuant to


Upon the Exercise of


Average


AvailableShares


Stock Option


Outstanding Stock


Exercise


for FuturePlan or Agreement Name

Issuable(#)


Exercises(#)


Options(#)


Price($)


Grants(#)1998 Stock Option Plan


520,000



98,048



167,476


$
13.47



*December 9, 1998 Stock Option
    Plan


700,000



469,664



138,534


$
9.75



*1999 Stock Option Plan


600,000



50,428



90,278


$
14.50



*     *
    
    The Board of Directors terminated authority to make future
    grants under these plans on May 15, 2003.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence          
    The Nominating and Governance Committee reviewed the business
    transactions between Hanover and Encore Acquisition Company
    (Encore), a New York Stock Exchange traded company
    engaged in the development of onshore North American oil and
    natural gas reserves. Jon Brumley, a director of Hanover, is the
    Chairman of the Board of Encore. During the years ended
    December 31, 2006, 2005, and 2004, Hanover recorded revenue
    from sales to Encore of approximately $3.5 million,
    $0.0 million and $0.0 million. The Nominating and
    Governance Committee determined that Hanovers commercial
    business with Encore, which falls well below 2% of either
    companys revenues for fiscal year 2006, was immaterial to
    both companies.
    Ted Collins, Jr., a director of Hanover, owns 100% of
    Azalea Partners, which owns approximately 15% of Energy Transfer
    Group, LLC, which is referred to herein as ETG, a
    privately held company engaged in power generation and
    compression projects. In 2006, 2005 and 2004, Hanover recorded
    sales of approximately $46.9 million, $25.5 million
    and $7.7 million, respectively, related to equipment leases
    and sales to ETG. In addition, Hanover and ETG are co-owners of
    a power generation facility in Venezuela. Under the agreement of
    co-ownership, each party is responsible for its obligations as a
    co-owner. As manager of the facility, Hanover received revenues
    related to the facility and distributed to 27




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##### Table of Contents



ETG its net share of the operating cash flow of
    $0.7 million, $0.5 million, and $0.8 million
    during 2006, 2005 and 2004, respectively.  
    The board determined that no charitable organizations with which
    any member of the board or their immediate family members were
    affiliated during 2006 received support from Hanover.      Item 14.
    Principal
    Accounting Fees and Services  Fees Paid
    to the Independent Registered Public Accounting Firm
    Types of Fees

FY 2006


FY 2005(In thousands)Audit fees(a)

$
3,209


$
3,724Audit-related fees(b)


4



47Tax fees(c)


65



147All other fees(d)


2



2Total fees:

$
3,280


$
3,920    (a)
    
    Audit fees include fees incurred related to audits and reviews
    of financial statements that we are required to file with the
    SEC, audit of internal control over financial reporting,
    statutory audits of certain of our subsidiaries financial
    statements as required under local regulations and other
    services which PwC provides as our principal auditor, including
    issuance of comfort letters, and assistance with and review of
    documents filed with the SEC.(b)
    
    Audit-related fees include fees billed by PwC related to
    employee benefit plan consent issued for 2006 and audit
    performed for 2005.(c)
    
    Tax fees include fees billed by PwC primarily related to tax
    compliance and consulting services.(d)
    
    All other fees include fees billed by PwC related to software
    licensing agreements.   Pre-Approval
    Policies and Procedures
       28




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##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedule  The following documents are filed as part of this
    report or incorporated herein by reference:
  Form 10-K
      Exhibits
  ExhibitNumber

Description2
.1

Agreement and Plan of Merger,
    dated February 5, 2007, by and among Hanover Compressor
    Company, Universal Compression Holdings, Inc., Iliad Holdings,
    Inc., Hector Sub, Inc., and Ulysses Sub, Inc. incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K
    filed with the SEC on February 5, 2007.3
.1

Certificate of Incorporation of
    the Hanover Compressor Holding Co., incorporated by reference to
    Exhibit 3.1 to the Companys 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

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
.2

Form of Hanover Compressor Capital
    Trust 71/4% 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
.3

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
.4

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
.5

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
.6

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
.7

Indenture for the
    8.50% Senior Secured Notes due 2008, dated as of
    August 30, 2001, among the 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
.8

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
.9

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. 29




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##### Table of Contents



ExhibitNumber

Description4
.10

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
.11

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
.12

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
.13

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
.14

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
.15

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
.16

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
.17

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, 2004.4
.18

Fourth Supplemental Indenture to
    the Senior Indenture dated as of December 15, 2003,
    relating to the
    71/2% Senior
    Notes due 2013, dated as of March 31, 2006, among Hanover
    Compressor Company, Hanover Compression Limited Partnership and
    Wachovia Bank, National Association, as trustee, incorporated by
    reference to Exhibit 4.1 to the Companys Current
    Report on
    Form 8-K,
    as filed with the SEC on March 31, 2006.4
.19

Form of Note for the
    71/2% Senior
    Notes due 2013, incorporated by reference to Exhibit 4.2 to
    the Companys Current Report on
    Form 8-K,
    as filed with the SEC on March 31, 2006.10
.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, incorporated by
    reference to Exhibit 10.3 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005.10
.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, incorporated by reference to Exhibit 10.4
    to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005.10
.5

First Amendment and Consent, dated
    as of June 27, 2006 with respect to the Hanover Compressor
    Company and Hanover Compression Limited Partnership Credit
    Agreement dated November 21, 2005, incorporated by
    reference to Exhibit 10.1 to the Companys Quarterly
    Report on
    Form 10-Q
    for the quarter ended June 30, 2006.10
.6

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. 30




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##### Table of Contents



ExhibitNumber

Description10
.7

Guarantee, dated as of
    August 31, 2001, made by the Company, Hanover Compression
    Limited 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
.8

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
.9

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
.10

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
.11

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
.12

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
.13

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
.14

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
.15

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
.16

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
.17

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
.18

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
.19

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
.20

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
.21

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. 31




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##### Table of Contents



ExhibitNumber

Description10
.22

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, 2005.10
.23

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
.24

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
.25

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
.26

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
.27

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
.28

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
.29

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
.30

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.10
.31

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
.32

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
.33

Hanover Compressor Company 2006
    Stock Incentive Plan, incorporated by reference to the
    Companys Definitive Proxy Statement on Schedule 14A,
    as filed with the SEC on March 24, 2006.10
.34

First Amendment to be effective
    February 3, 2007 to the Hanover Compressor Company 2006
    Stock Incentive Plan incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    as filed with the SEC on February 5, 2007. 10
.35

Hanover Compressor Company 2006
    Long-Term Cash Incentive Plan, incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed with the SEC on July 27, 2006. 10
.36

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
.37

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
.38

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
.39

Gary M. Wilson letter dated
    July 29, 2005 relating to employment benefits. 
    *10
.40

Gary M. Wilson letter dated
    October 10, 2006 relating to employment benefits.
     *10
.41

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
.42

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. 32




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##### Table of Contents



ExhibitNumber

Description10
.43

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
.44

Employment Letter with Anita H.
    Colglazier dated April 4, 2002 with explanatory note,
    incorporated by reference to Exhibit 10.61 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004. 10
.45

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
.46

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
.47

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, 200521
.1

List of Subsidiaries.*23
.1

Consent of PricewaterhouseCoopers
    LLP.*23
.2

Consent of PricewaterhouseCoopers
    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

Financial Statements of WilPro
    Energy Services (PIGAP II) Limited.**99
.2

Financial Statements of WilPro
    Energy Services (El Furrial) Limited.**     *
    
    Filed on February 28, 2007 as an exhibit to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2006.**
    
    Filed herewith
    
    Management contract or compensatory plan or arrangement 33




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##### Table of Contents



SCHEDULE II
  HANOVER
    COMPRESSOR COMPANY
 VALUATION
    AND QUALIFYING ACCOUNTS
  AdditionsBalance at


Charged to





Balance atBeginning


Costs and





End ofDescription

of Period


Expenses


Deductions


Period(In thousands)Allowance for doubtful accounts
    deducted from accounts receivable in the balance sheet2006

$
4,751


$
2,465


$
2,278
(1)

$
4,9382005


7,573



1,955



4,777
(1)


4,7512004


5,460



2,658



545
(1)


7,573Allowance for obsolete and slow
    moving inventory deducted from inventories in the balance sheet2006

$
11,797


$
2,293


$
2,178
(2)

$
11,9122005


11,699



148



50
(2)


11,7972004


12,729



1,062



2,092
(2)


11,699Allowance for deferred tax assets
    not expected to be realized2006

$
75,420


$
13,061


$
41,485
(3)

$
46,9962005


65,441



13,015



3,036
(3)


75,4202004


55,015



23,429



13,003
(3)


65,441     (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. 34




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##### Table of Contents



SIGNATURES
    HANOVER COMPRESSOR COMPANY
  By:
    /s/  JOHN
    E. JACKSONJohn
    E. JacksonPresident and Chief Executive Officer
    (Principal Executive Officer)   35




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##### Table of Contents



Exhibit Index
  ExhibitNumber

Description23
.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
.1

Financial Statements of WilPro
    Energy Services (PIGAP II) Limited.99
.2

Financial Statements of WilPro
    Energy Services (El Furrial) Limited.  36