UK Re-Refining Project - Agreement for Lease

23 July 2015

Hydrodec Group plc

("Hydrodec" or the "Company")

Update on UK Re-Refining Project - Agreement for Lease

Hydrodec Group plc (AIM: HYR), the clean-tech industrial oil re-refining group, is pleased to announce that Hydrodec Re-Refining (UK) Limited ("HRR"), a subsidiary of the Company, has entered into an agreement for lease with The Manchester Ship Canal Company Limited (a member of the Peel Ports Group) in relation to a proposed long term lease of an 9 acre site near Eastham Locks, Port Wirral, Merseyside, North West England (the "Lease"). The site would be used by the Company for the first phase of its development of a used oil re-refinery in the UK.

Completion of the Lease is dependent upon certain conditions precedent, including obtaining a satisfactory Development Consent Order under the Nationally Significant Infrastructure Projects planning regime, the necessary regulatory consents, licences and permits for the construction and operation of the development together with funding. Subject to practical completion of the first phase development within 3 years of the commencement of the Lease, HRR has the option to enter into a further long term lease for an adjacent 7 acre site on equivalent terms to the Lease.

Commenting on the announcement, Ian Smale, Chief Executive of Hydrodec said: 'We remain focused on developing the UK's first purpose built used lubricant oil re-refinery producing the highest quality Group II/II+ base oils and are currently fully engaged in the planning, permitting and financing process for the project. We considered various potential sites in the UK for the new re-refinery and selected the Eastham site for a number of reasons. In particular, the site is located in an established petrochemicals region and is zoned for employment use, provides good transport links by river and by road, whilst the availability of adjacent storage facilities means that the size of the new plant can be kept to a minimum. This agreement for lease is an important milestone in the project.'

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Notes to Editors:

Hydrodec's technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing 'as new' high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations. Hydrodec's plants are located at Canton, Ohio, US and Young, New South Wales, Australia. In 2013, Hydrodec acquired the business and assets of OSS Group, the UK's largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil, with a national network of oil storage and transfer stations. Used oil is converted into processed fuel oil at OSS's plant at Stourport and principally sold on to the UK quarry and power industry. In April 2015, Hydrodec further acquired the business and assets of Eco Oil, a leading UK waste oil collector and supplier of recycled industrial fuel oil into the power and road stone industries. It is also one of four significant providers of waste management services to the marine industry in the UK, specifically oily-water slops or marine pollutant (MARPOL). In line with our stated intention to develop a base oil re-refinery in the UK, we have an exclusive licence agreement with California-based Chemical Engineering Partners (CEP) to develop the CEP wiped-film evaporation and hydrogenation technology in the UK as well as the basic engineering for a 75 million litre per annum capacity base oil re-refinery.

Hydrodec's shares are listed on the AIM Market of the London Stock Exchange. For further information, please visit www.hydrodec.com.