Formation of Augean North Sea Services Limited

29 May 2012

Augean plc

("Augean" or "the Group")

Formation of Augean North Sea Services Limited

Augean plc, one of the UK's market leaders in the management of hazardous waste, is pleased to announce that it has signed a joint venture agreement with Scomi Oiltools (Europe) Limited ("Scomi") to take a controlling stake in a new company formed from the existing operational assets of Scomi in the UK.

Highlights

·; A new company, to be called Augean North Sea Services ("ANSS"), will provide waste management services to offshore operators in the North Sea

·; Augean will pay £2.05m for a 70% shareholding in ANSS and provide a loan of £1.0m to allow Scomi to repay existing debt

·; The total consideration of £3.05m to be drawn from Augean's existing £10.0m bank facility

·; The joint venture is in line with the Group's stated strategy to take advantage of opportunities in key growth areas, including offshore waste management

·; ANSS expected to deliver annual revenues of £6.0m

The joint venture will build upon the existing relationship between Augean and Scomi for the treatment of drill cuttings from offshore oil and gas exploration, using Augean's thermal treatment and disposal facilities at Port Clarence and Scomi's offshore waste management resources, based in Aberdeen. By combining these activities through ANSS, the new venture will have the capability to source, contain, treat, recycle and ultimately dispose of offshore wastes for its customers through an integrated waste management supply chain.

The joint venture will operate assets transferred from Scomi's existing UK operations, based at sites in Aberdeen and Lerwick in Shetland. These assets include offices and industrial premises, which will provide a base for managing and storing wastes, a large waste treatment and storage facility at Pocra Quay in Aberdeen and specialist equipment used in the management and transportation of waste materials from North Sea drilling platforms. In addition, 40 experienced employees based in Aberdeen will transfer from Scomi into ANSS to manage and operate the venture.

ANSS will provide services to existing Scomi customers and progressively develop its activities and services over the next 12 months. At the core of the operation will be drilling waste management on the offshore platforms, supported by onshore treatment of drill cuttings (provided through a service contract with the existing Augean facility at Port Clarence) and treatment and disposal of other wastes from service vessels utilising the specialist treatment and storage facility at Pocra Quay.

To create the joint venture Augean will purchase shares in ANSS from Scomi, paying £2.05m for a 70% shareholding. Augean will also provide a loan of £1.0m to ANSS, allowing Scomi to repay existing debt, with this loan secured against the property assets owned by the venture in Aberdeen. The total consideration of £3.05m will be drawn from Augean's existing £10.0m bank facility with HSBC bank plc. No financial goodwill is expected to be generated from the transaction. ANSS represents an excellent opportunity to combine the existing assets, knowledge and skills of Augean and Scomi in the UK to develop a business which is expected to deliver annual revenues of £6.0m and EBITDA of £0.75m.

In setting up the joint venture both parties expect to benefit from current and future opportunities to manage offshore waste whilst providing access to the emerging market for the decommissioning of redundant offshore structures and naturally occurring radioactive materials (NORM), which are expected to grow over the next 10 years.

Paul Blackler, CEO commented:

"The creation of Augean North Sea Services is an exciting step towards delivering Augean's strategy of providing integrated waste management services to offshore operators in the North Sea. I am confident that this will create value for our shareholders and enhance the future opportunities available to the Group.

We are delighted to be building upon our existing relationship with Scomi and look forward to combining their established expertise in providing services to the oil and gas industry with Augean's own core capabilities in the management of hazardous wastes.

I would like to welcome all of our new colleagues at ANSS to the Augean group and look forward to working with them to develop and grow the business."

The integration of the new business will take place during the second half of 2012, with positive contributions towards profit expected from 2013 onwards. The Board's expectations for 2012 remain unchanged.

-Ends-

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