Update on Canton re-refinery

20 August 2015

Hydrodec Group plc

("Hydrodec" or the "Company")

Update on Canton re-refinery

Further to the update on the Canton re-refinery on 10 July 2015, the Company reports that cumulative production through the start-up process has to date delivered more than 200,000 gallons (more than 750,000 litres) of SUPERFineTM baseoil with the first commercial sale occurring on 3 August 2015. Trains 1 and 2 continue to operate at close to design specification producing approximately 9,000 gallons per day. 

However, following testing and re-certification of the heat exchangers by the original equipment manufacturer under the direction of the principal contractor, it has been identified that further remedial work will be required to assure Hydrodec of the plant's capability to operate at full design capacity. This plan of work has been agreed and is being implemented.

As a result, management now expects that production at Canton will not achieve the 19 million litres of base oil in 2015 communicated at the Company's AGM on 9 June 2015. Nevertheless, the Canton business is still expected to be cash generative by the end of the current year.

A further update on expected production for the year will be provided with the publication of the 2015 interim results on the 23 September 2015.

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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.