FOR IMMEDIATE RELEASE

Foradditionalinformation,contact:JimRedden

jredden@miswaco.comTel:8322952648Fax:8322952660

P.O.Box42842Houston,Texas772422842www.miswaco.com

M-I SWACO ANNOUNCES ACQUISITION OF EPCON OFFSHORE AS

HOUSTON, Texas (February 23, 2006)... M-I SWACO today announced the acquisition

of Epcon Offshore AS, providing access to industry-leading produced water treatment

technology. The acquired operations, based in Porsgrunn, Norway, generated annual sales of

approximately $26.5 million for the fiscal year ended December 31, 2005.

Epcon Offshores proprietary treatment technology is designed to optimize the removal

of hydrocarbons from produced water. Today, produced water is approaching three-times daily

oil production making it oil and gas operators largest waste stream. Epcons Compact Flotation

Unit (CFU) is currently being used by a number of major operators in the North Sea, Latin

America and the Middle East market to optimize the separation of produced water. Compared to

conventional separation units, the patented CFU has a smaller footprint and weight, making it

ideal for upgrading existing water treatment facilities facing challenges meeting increasing waste

volumes and more-stringent discharge regulations.

-MORE-

The acquisition of Epcon Offshore provides us an avenue into the produced

water treatment business, which we recognize as one of the industrys most promising

markets going forward. This is a natural extension of our Drilling Waste Management

business, and we are confident that the highly talented personnel and the innovative, cost-

effective technology Epcon Offshore delivers, will position us for significant growth

opportunities, said M-I SWACO Senior Vice President of Drilling Waste Management

Larry Barker.

On behalf of the previous owners of Epcon Offshore, former chairman, Torben

Moltke-Leth, said, "It has been of major importance for the owners to find a well-

regarded international buyer that is able to develop the potential of the company to the

benefit of the industry and the employees."

M-I SWACO, a leading supplier of drilling and completion fluids, production

chemicals and solids control and waste management services to the worldwide petroleum

industry, is owned 60 percent by Smith International, Inc. (NYSE: SII) and 40 percent by

Schlumberger Limited (NYSE: SLB).

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