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Integra brochure
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September 26, 2005

Integra Group announces the acquisition of Uralmash

Integra Group, a corporation formed to pursue the consolidation of Russian oilfield service companies, announced it has completed the acquisition of Uralmash-Drilling Equipment and VNIIBT-Drilling Tools (“Uralmash”) from MNP Group.  This transaction will enable Integra to broaden its services and provide more fully integrated solutions to oil producers operating in Russia.
Uralmash is Russia’s leading manufacturer of heavy drilling rigs, and a significant producer of drilling tools.  Major customers include Gazprom, LUKoil, TNK-BP, Surgutneftegaz, Burgaz, Sibneft, Rosneft and Tatneft.  The Company’s main manufacturing facilities are located in the Volga-Urals, particularly in Ekaterinburg, Perm, Kotovo, Pavlovsk.
This transaction, which closed on September 23, 2005, will have a transformational impact on Integra and increase its projected pro forma 2005 revenues.
Felix Lyubashevsky, President and CEO of Integra and Co-Chairman of the Association of Oil and Gas Equipment Producers said, “The acquisition of Uralmash-Drilling Equipment and VNIIBT-Drilling Tools demonstrates Integra’s desire to strengthen its business profile. Building upon our long-established, engineering technology and operations expertise, this combination will create a stable, consolidated oilfield service company able to deliver a leading offer to customers and the greater marketplace.”
John Fitzgibbons, Chairman of Integra and President of Brookline Partners, a private investment firm that founded Integra, said, "We are attracted to the investment opportunities within the Russian oilfield service sector and look forward to making further investments in this space. All the pieces are in place for Integra to lead the inevitable change and consolidation that we foresee in the sector."
Mikhail Kosolapov, CEO of MNP Group, said,  "We are delighted to complete the sale of Uralmash-Drilling Equipment and VNIIBT-Drilling Tools to Integra.  Integra’s planned injection of additional capital, the introduction of advanced oilfield technologies, and extensive marketing, will help these assets realize their full market potential. This sale is consistent with MNP’s strategy of divesting its drilling equipment and other divisions unrelated to MNP’s primary focus of offshore shipbuilding."
The acquired business will be headed by Vitaly Tkachev who has many years of experience in oil and gas industry. His primary focus will be to develop business processes so that manufactured products and provided services will meet all customers’ requirements.
Integra also announces the completion on September 23, 2005 of the private placement of $90 million of senior secured notes.  JP Morgan acted as lead arranger and sole bookrunner.  On October 11, 2005, Integra completed the private placement of convertible preferred stock resulting in net proceeds of $40 million.
Skadden, Arps, Slate, Meagher & Flom acted as counsel to Integra with respect to the financing.  White and Case acted as counsel to Integra with respect to the Uralmash acquisition.
Notes to Editors
About Integra Group
Established in 2004, Integra Group is an oilfield service company active in Russia.  Integra provides drilling and other oilfield services to clients in the Timano Pechora and Western Siberian basins.  Integra is a fast-growing consolidator in the Russian oilfield service sector through its strategy to acquire existing Russian companies that benefit from its provision of capital, industry knowledge, marketing access, new technology and increasing economies of scale.  Integra is backed by Brookline Partners LLC, a New York based investment firm managed by John Fitzgibbons, Integra’s Executive Chairman.
About Uralmash
Uralmash-Drilling Equipment and VNIIBT-Drilling Tools are Russia’s leading manufacturer of heavy drilling rigs and a significant producer of oil and gas drilling tools and equipment.  Its main manufacturing assets are located in the Volga-Ural region with developed industrial and transportation infrastructure and access to a qualified labor force.
Contacts
Brunswick GroupNew YorkEllen Gonda+1.212.333.3810egonda@brunswickgroup.comLondonPatrick Handley+44-20-7404-5959phandley@brunswickgroup.com