Company Press Release

Lufkin Directors Approve Increase in Quarterly Dividend to $0.18 Per Share and Increase in the Stock Repurchase Program

LUFKIN, Texas--(BUSINESS WIRE)--Feb. 19, 1998--Lufkin Industries, Inc. (Nasdaq/NM:LUFK) today announced that its Board of Directors has approved an increase in the quarterly cash dividend on its common stock to $0.18 per share. The new quarterly amount is a 6% increase from the previous amount of $0.17 per share and is equivalent to $0.72 per share on an annualized basis. The dividend will be paid on March 10, 1998, to shareholders of record on March 1, 1998.

Lufkin also announced that the Board of Directors has authorized the use of up to $3.0 million for the repurchase of shares of Lufkin's common stock. Based on the current market value of the common stock, this will allow the Company to repurchase approximately 1.3% of the 6.6 million shares outstanding. The purchases are to be made from time to time in the open market at prevailing market prices. The shares repurchased will be available for use under the Company's 1990 and 1996 Stock Option Plans to minimize dilution to existing shareholders.

Douglas V. Smith, president and chief executive officer, said, "This is the fourth stock repurchase program approved by the Board. Under the prior repurchase programs, a total of 272,000 shares have been repurchased to date. The Board's decision to increase the quarterly cash dividend and to increase the share repurchase program affirms Lufkin's strong financial position and our belief that the common stock of Lufkin represent a sound investment. As of December 31, 1997, Lufkin had cash and short-term investments of $18.3 million and shareholders' equity of $155.3 million."

Lufkin Industries, Inc. sells power transmission products, oil field pumping units, foundry castings, and highway trailers throughout the world. The Company has vertically integrated all vital technologies required to design, manufacture, and market its products.

Contact:

     Lufkin Industries Inc., Lufkin
     C. James Haley Jr., 936/637-5555