FOR IMMEDIATE RELEASE:
September 26, 2006

Contact
Kevin Kuykendall, Principal, Energy Group (214) 220-4600
Todd Friant, Vice President, Energy Group (214) 220-4600
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Invests $34 Million in Add-On Acquisition for Portfolio Company BPWest

Bethesda, MD – September 25, 2006 – American Capital Strategies Ltd. (Nasdaq: ACAS) announced today it has invested an additional $34 million in its portfolio company, BPWest Inc., to support BPWest’s acquisition of Toby’s Vacuum Truck Services Inc. (“Toby’s”) and to refinance all of the senior debt of BPWest.  Toby’s provides water hauling services to support drilling and production activity in the Piceance Basin in Colorado.  American Capital’s investment takes the form of a senior term A loan.  American Capital is also providing a revolving credit facility.   

“Our additional commitment supporting the add-on acquisition for BPWest demonstrates again the long-term, sustained commitment we make to our portfolio companies,” said American Capital Regional Managing Director Darin Winn.  “This is an ideal investment made by our Energy Group, supporting a strategic acquisition, which promotes the continued growth of our portfolio company.”

American Capital has invested $5 billion in the last twelve months, $3.5 billion year to date and $1 billion quarter to date.  These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital.  For more information about American Capital’s portfolio, click here.

“Toby’s management has established an extraordinary reputation for high quality and predictable service.  Management’s close business ties with the oil and gas community provide the Company with unique advantages, including reliable access to water supplies, and substantial barriers to potential competitors,” said American Capital Vice President Todd Friant. “The acquisition of Toby’s enables BPWest to better serve its existing drilling fluid customers in the Piceance Basin and broadens BPWest’s product offerings so that it can provide both drilling and production support services.  We are optimistic that Toby’s will continue to grow rapidly to meet customer needs in the Piceance Basin, one of the nation’s largest and most rapidly developing reservoirs of unconventional natural gas.”

Founded in 1989, Toby’s Vacuum Truck Services provides water hauling services to over 1,500 producing wells in the Piceance Basin in northwestern Colorado.  The Company also provides fresh water to drilling operators, often in combination with other additives, which is used in a variety of drilling applications.  Toby’s headquarters are in Parachute, CO, in the heart of the Piceance Basin.

In 2005, American Capital first invested in BPWest when it was formed to acquire Anchor Drilling Fluids USA.  BPWest is now a leading provider of drilling fluid products and services for oil and gas drilling in the Rockies, the Mid-Continent, the Arkoma Basin and the Permian Basin.  Drilling fluids are used to control formation pressures, remove cutting, and cool and lubricate drillbits.  BPWest’s products include weight materials and clays, thinners, fluid loss control agents, oil mud products, lost circulation materials, chemicals and specialty and corrosion control products.  The Company also provides engineering, trucking and rental equipment services.  BPWest’s headquarters are in Tulsa, OK and it has operating facilities in Oklahoma, Arkansas, Wyoming, Colorado, Texas, Montana and Utah.

“With its additional investment in BPWest to support the acquisition of Toby’s, American Capital has again proved to be a first-class investment partner, following through over the long term on behalf of its portfolio companies,” said BPWest CEO Robert West.  “Its Energy Group was quick to appreciate and throw its support behind the strategic logic of this combination that will enable us to maximize the growth potential of both companies.”

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of $8.9 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital generally invests from $10 million to $400 million per company.

As of August 31, 2006, American Capital shareholders have enjoyed a total return of 476% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends.  American Capital has paid a total of $1.2 billion in dividends and paid or declared $21.56 dividends per share since its August 1997 IPO at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit www.AmericanCapital.com.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements. The statements regarding expected results of American Capital Strategies are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

Performance data quoted above represents past performance of American Capital.   Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate.   Consequently, an investor's shares, when sold, may be worth more or less than their original cost.   Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements.   The statements regarding expected results of American Capital Strategies are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.