Graphene Nanochem Regulatory News (GRPH)

Graphene NanoChem plc

("Graphene NanoChem" or the "Group")

Trading Update and Collaboration with Scomi for PlatDrill

Graphene NanoChem (AIM: GRPH), the performance nanochemicals and advanced materials company, is pleased to announce that Platinum NanoChem Sdn Bhd, its wholly-owned subsidiary has entered into an exclusive product formulation and marketing agreement with Scomi Oiltools Sdn Bhd ("Scomi") to deliver a range of formulated PlatDrill™ series for the oilfield chemicals market.

Earlier this year, Graphene NanoChem in collaboration with Scomi, successfully completed the formulation of its first graphene-enhanced drilling fluids. The PlatDrill enhanced fluids deliver superior performance with lower environmental impact as well as better lubricity, load bearing capacity and higher viscosity properties. Scomi has presence in more than 25 countries worldwide and is one of the leading firms in the global supply of drilling fluid services.

The first of the PlatDrill series has been successfully tested and earmarked for deployment in Malaysia and Myanmar, pending the identification of suitable well sites by Scomi's customers. The PlatDrill formulation offers an attractive solution for high performance drilling fluids that satisfy demanding technical, as well as increasingly stringent environmental, requirements of modern day drilling.

Graphene NanoChem is now focusing on customising a range of formulated PlatDrill series tailored to meet the various performance drilling fluid requirements for different geographical locations where Scomi is currently servicing its customers. These geographies include Thailand, Indonesia, Australia, China, Vietnam and Turkmenistan. In expanding and optimising the PlatDrill series range, Graphene Nanochem will continuously work with the different types of nanomaterials within its portfolio to deliver better value.

The collaboration effectively combines the strength of Graphene NanoChem in delivering its graphene-enhanced renewable solution and Scomi's drilling fluids formulation expertise, as well as global reach in the drilling fluids market.

Graphene NanoChem is already supplying a PlatDrill derivative to Scomi, utilised in oil reservoir drill-in fluids, which has been successfully deployed downhole in Turkmenistan this year.

Trading Update

The Board of Graphene NanoChem is encouraged by the continued progress with Scomi in the formulation of the PlatDrill series. However as highlighted in the trading update on 31 October 2013, the timing of the deployment of PlatDrill downhole has a material impact on the Group's financial results for the year to 31 December 2013. Deployment is unlikely to occur before the year end and the loss for the year will therefore be higher than guided in the Group's announcement dated 3 June 2013*. The Group will also close the palm oil refinery in Lahad Datu, East Malaysia for a period of routine maintenance during December 2013.

Progress on the expansion of the Group's Senawang nanochemicals facility remains on track with commissioning expected to be completed by 1 February 2014. In addition, the Group's modular expansion of its Graphene production is also progressing well. The Group's projected balance sheet remains strong with substantial cash resources into 2015 and beyond.

Jespal Deol, Chief Executive Officer of Graphene NanoChem, commented: "The delay in the deployment of PlatDrill downhole obviously has an impact on our year end results but we are very encouraged to be joining forces with Scomi in advancing the application of nanomaterials in oilfield chemicals. Taking a new product to market is a challenge in itself particularly when dealing with stringent requirements and product acceptance process for the oil and gas sector. Being able to leverage on the Scomi platform certainly offers an advantage in market access. We believe demand will grow and the Group intends to work closely with Scomi in formulating differentiated "smartfluid" solutions for the various geographical regions in which it operates."

*Profit forecasts in the announcement dated 3 June 2013 are no longer current. Going forward, the Group will not make profit forecasts and will report performance against consensus market estimates.

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