Powerhouse Ener Regulatory News (PHE)

6 February 2015

PowerHouse Energy Group plc

("PowerHouse" or the "Company")

Closure of Munich Site and Relocation of Operations to Australia

PowerHouse (AIM: PHE) provides the following update in relation to its activities.

The board of directors of PowerHouse (the "Board") has made the strategic decision to focus all of its efforts on completion of the construction of the newly designed PHE G-3 UHT gasification system being constructed in Australia, and the contract opportunities that now stem from this new process.

As a result Powerhouse will immediately cease its plans for the reconstruction of the Eiting plant in Munich. The Board has decided that the relocation and rebuilding of the previous Pyromex facility in Eiting at the Wurzer Umwelt site to incorporate the new PHE (Gen 3) technology, will not provide a sufficient return on investment to the shareholders. Costs expended on the Eiting plant reconstruction project to date are estimated at €70,000. The Board does not anticipate any further material costs will be incurred as a result of this decision.

The management of the Company and all current operations are being relocated from Switzerland and Munich to Brisbane, Australia and future sales of the PHE G3 UHt system will focus on the growing demand in the Australian, Asian and US markets.

The Board has made this decision to close all operations in Switzerland and Germany, as the expense of supporting the former Pyromex technology is felt to be unnecessary with the advent of the new PHE G-3 UHt system. An office in the UK will continue to pursue opportunities in both the UK and Europe. We anticipate that the winding down of Pyromex should be largely completed in the next month and a further announcement will be made once this has been completed. Again, the Board does not anticipate any further material costs will be incurred as a result of this decision.

"This decision has been made in the best interests of the Company's shareholders. It represents a clear step forward for Powerhouse to focus its efforts in more exciting markets where demand for the new PHE G-3 UHt system is growing, whilst we keep our costs lower." Stated Keith Allaun, Executive Chairman of PowerHouse.

Hillgrove Investments Pty Limited ("Hillgrove") continues to provide financial support to the Company. The balance on the Hillgrove convertible loan note currently stands at US$2,935,899, an increase from US$2,185,899 as at 30 June 2014. Hillgrove has confirmed to the Board that it is its present intention to ensure the Company meets its obligations as they fall due and to ensure the Company operates as a going concern for a period of at least the next twelve months, pending any unforeseeable or material changes to the Company's current circumstances.

For additional information please contact:

PowerHouse Energy Group plc

Keith Allaun +44 (0) 20 7079 4407

Allenby Capital Limited (Nominated Adviser and Broker)

Nick Harriss/David Hart +44 (0) 20 3328 5656