Investor Relations Presentation

October 2010

TSX: PLK

Jay B. Simmons
Chairman & CEO

Investor Relations Presentation - October 2010

 Forward-Looking Statements Advisory
Certain statements in this Presentation constitute”forward-looking” statements that involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of Palko Environmental Ltd. (the "Corporation"), or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this document, such
statements may use such words as “may”, “will”, “intend”, “should”, “expect”, “believe”, “plan”, “anticipate”, “estimate”, “predict”, “potential”, “continue”, or
the negative of these terms or other similar terminology. These statements reflect current expectations regarding future events and operating
performance and speak only as of the date of this document. Such statements include those referring to; the Corporation's ability to implement leading
innovative technology and to provide superior value to customers; the ability of its technical advisory group to develop solutions that are environmentally
sound, technically feasible, and economically attractive; leveraging of the Corporation's relationship with Gibson Energy ULC ("Gibson"); the
Corporation's expansion opportunities; its intention to commercialize existing technology in water treatment, enter that area of operation and implement its
water strategy at existing facilities and at customers' sites; an increase in the Corporation's oil emulsion and custom treating volumes; the potential for
future pipeline connectivity and the potential for future acquisitions and/or development. These statements assume, among other things; continued
stability or growth in the oil and natural gas industry; an expanding market for the Corporation’s services; the continuation of the Corporation's strategic
relationship with Gibson; the Corporation's ability to analyze data and implement improved technology; increased regulation of the industry and increasing
water scarcity in the Western Canadian sedimentary basin.
Although the Corporation believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that
these expectations will prove to be correct. There are risks which could affect the Corporation’s future results and could cause the results to differ
materially from those expressed in these forward looking statements including; the impact of general economic conditions in Canada; industry conditions,
including fluctuations in the price of oil and natural gas; the inability of the Corporation to maintain its relationship with Gibson, maintain customer
relationships or capitalize on expansion opportunities; the impact of governmental regulation and the possibility that such regulation ceases to act as a
barrier to entry; including changes to existing environmental regulation; stock market volatility; the need to obtain required approvals from regulatory
authorities; the risk that the Corporation will not have the technical ability or expertise to develop or implement existing or improved technology and the
uncertainty inherent in attracting capital. Statements of past performance should not be construed as an indication of future performance. Forward-looking
statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be
accurate indications of whether or not such results will be achieved. A number of factors, including those discussed above, could cause actual results to
differ materially from the results discussed in the forward-looking statements. Any such forward-looking statements are expressly qualified in their entirety
by this cautionary statement. Moreover, the Corporation does not assume responsibility for the accuracy or completeness of such forward-looking
statements. The forward-looking statements included in this Presentation are made as of the date of this Presentation and the Corporation undertakes no
obligation to publicly update or revise forward-looking statements other than as required by applicable laws. You should not place undue reliance on
forward-looking statements.
Investor Relations Presentation - October 2010
 MISSION
To provide superior value to our
customers through the recovery of
valuable resources in oil field waste.

We will achieve this by collecting, measuring and

analyzing data, reviewing alternatives and
implementing leading innovative technology.

Investor Relations Presentation - October 2010

 COMPANY FORMATION
Plan of Arrangement - June 2010
1. Palko Environmental formed through the combination of Palko
Energy of Midale, Saskatchewan and Deepwell Energy Services

2. $3 million private placement by Gibson Energy ULC

4. New company: Palko Environmental Ltd.

5. New Trading Symbol: TSX: PLK

6. Market capitalization: $25 million

Investor Relations Presentation - October 2010

 RECENT HISTORY
Aug. 16, 2010: Q2 2010 FINANCIAL & OPERATING HIGHLIGHTS
 Revenues increased Q/Q by 64%, and Y/Y by 63%
 Operating margins in Q2 were 25%, and YTD were 33%
 EBITDA* $0.09/share vs. $0.04 for Q2 2009 (increase of 125%)

Sept. 15, 2010: COREY ZAHN STEPS IN AS NEW CFO

 11 yrs. in VP Finance and CFO roles with private and public oilfield
service companies; 9 years as Sr. Manager with KPMG

Oct. 6, 2010: ADDITION OF NEW FACILITY IN MIDALE, SK

 Excess custom treating capacity, pipeline access and water disposal
through an arrangement with a producer owner and operator

Oct. 12, 2010: FORMATION OF TECHNICAL ADVISORY GROUP

 Innovation forum in support of assessing and applying leading edge
treatment technologies and processes to oilfield wastes.
 Composed of four faculty members of the Schulich School of
Engineering at the University of Calgary
* Before one-time restructuring and reorganization costs of $322,900 associated with the Plan of Arrangement.
Investor Relations Presentation - October 2010
 PALKO FACILITIES

Investor Relations Presentation - October 2010

 WATER INTENSITY

Investor Relations Presentation - October 2010

 ENERGY STORY is a WATER STORY

2.6x 3.7x
0.9x 1.5x

Source: GeoScout : AB, BC and SK figures combined

Investor Relations Presentation - October 2010
 WATER MANAGEMENT
 About 75% of Alberta’s oil production (conventional, in-situ and
mining) is “water assisted”.
 In-situ oilsands projects recycle greater than 90% of the water used
in their production process.
 Hydraulic fracturing operations for shale and tight gas are water
intensive.
 Operators are looking for strategies to reduce water intensity
including the processing and recycling of recovered drilling and frac
fluids.
 Water optimization efforts include treating water for reuse.
Source: Responsible Water Management in Canada’s Oil and Gas Industry
Canadian Association of Petroleum Producers, June 2010
Investor Relations Presentation - October 2010
Investor Relations Presentation - October 2010
 REGULATORY COMPLEXITY

Investor Relations Presentation - October 2010

 ERCB REGULATORY PROCESS

Investor Relations Presentation - October 2010

 WHICH EXPANDS FURTHER

Investor Relations Presentation - October 2010

 REGULATIONS KEEP CHANGING
JUL 2010: Amendment to B.C. Water Act
APR 2010: Amendments to B.C. Environmental Mgmt. Act
MAR 2010: Amendment to B.C. Water Act
JAN 2010: Amendment to B.C. Water Act
DEC 2009: Amendment to B.C. Greenhouse Gas Reduction Act
MAR 2009: Amendment to B.C. Environmental Assessment Act
MAR 2009: Amendment to B.C. Oil & Gas Commission Act

In Progress at ERCB:
Directive 047: Waste Reporting Requirements for Oilfield Waste
Management Facilities
Directive 051: Injection and Disposal Wells
Investor Relations Presentation - October 2010
 ISSUES = OPPORTUNITY

Investor Relations Presentation - October 2010

 THE OPPORTUNITY
Water Intensity…
 Water treatment, recycling, reuse, increasing demand for water
 Demand for technology and innovation
 Producers establishing “water teams”

Regulatory Environment…
 Increasing complexity and amount of regulation - not core business for producers

Market Size…
 Producers hold 66% of $1.5 billion market - opportunity to take on more

Palko Position…
 In the middle of all the opportunity - geographically, active sale organization, organic growth,
application of innovative technology

Past solutions won’t work in the future as water issues and regulation intensifies

Investor Relations Presentation - October 2010

 Palko Environmental Ltd. operates six (6)
waste management and disposal facilities:
Mayerthorpe, Alberta
• full service waste management facility
Rycroft, Alberta
• waste water disposal facility
Grande Cache, Alberta
• full service waste management facility
Claresholm, Alberta
• full service waste management facility
Midale, Saskatchewan
• full service waste management facility
• a second custom oil treatment facility with
pipeline access and waste water disposal

Investor Relations Presentation - October 2010

 WASTE MANAGEMENT FACILITY

Investor Relations Presentation - October 2010

 INJECTION WELL

Investor Relations Presentation - October 2010

 GIBSON ENERGY ULC
• Gibson owns 39% of Palko Environmental
• Palko is Gibson’s “water” strategy
• Gibson is Palko’s “midstream” strategy
• Gibson touches 20% of all the oil produced in Canada
• Single shipper and marketer agreement
• Increase in oil emulsion and custom treating volumes
• Potential future pipeline connectivity

Investor Relations Presentation - October 2010

 GIBSON’S FOOTPRINT

Investor Relations Presentation - October 2010

 INDUSTRY WASTE STREAMS
“CHEMICAL SOUP”
(Composed of Oil, Water & Solids)

OIL EMULSIONS Frac Fluids

Produced Water WASTE WATER
MILSHAKE MUDS Drilling Fluids
Completions PIPELINE SLUDGE
FLOWBACK WATER
Chemical Spills Tank Sludge

Investor Relations Presentation - October 2010

 Elements include…

Investor Relations Presentation - October 2010

 ENVIRONMENTAL STRATEGY
• Commercialization of existing treatment technology
• Water treatment technology
• Oil treatment technology
• Pilot projects taken to date
• Implementation at existing Palko facilities
• Implementation at customer sites (on-site services)
• Establishment of “Palko Technical Advisory Group”

Investor Relations Presentation - October 2010

 TECHNICAL ADVISORY GROUP
 Innovation forum for leading edge waste, water and oil
treatment technologies and processes
 Development of solutions that are environmentally
sound, technically feasible and economically attractive
Members are:

Dr. Anil K. Mehrotra, Ph.D., P.Eng. is a Professor at, and the Interim Dean of, the
Schulich School of Engineering, as well as the Director of the Centre for
Environmental Engineering Research and Education (CEERE). Dr. Mehrotra’s
research expertise includes the transport and thermophysical properties of crude oils
and bitumens, the kinetics and mechanism of solids deposition and fouling, and the
remediation of contaminated soils and methane oxidation by biofiltration.

Investor Relations Presentation - October 2010

 TECHNICAL ADVISORY GROUP (cont’d)
Dr. Thomas G. Harding, Ph.D., P.Eng. is a Professor, and the Associate Head of
Undergraduate Studies, at the Schulich School of Engineering. Dr. Harding joined the
University of Calgary's Schulich School of Engineering in January 2004 after a 28-year
career in the petroleum industry and has varied engineering experience related to heavy
oil, conventional oil and gas production operations both domestic and international.

Dr. Maen Husein, Ph.D., P.Eng. is an Associate Professor, and currently the Associate
Head of Graduate Studies, in the Department of Chemical Engineering at the Schulich
School of Engineering. Dr. Husein’s research focus is on the energy and environment
and application of nanotechnology to optimize energy recovery from primary sources
while reducing the associated environmental impact.

Dr. Nader Mahinpey, Ph.D., P.Eng., MCIC is an Associate Professor at the Schulich
School of Engineering. His research activities focus on promoting research programs in
the areas of clean energy and green engineering.

Investor Relations Presentation - October 2010

 TOP CUSTOMER RELATIONSHIPS
• Encana Corporation • Crescent Point Energy

• ConocoPhilips Canada • Petrobakken Energy Ltd.

• Connacher Oil and Gas • Cenovus Energy Inc.

• Canadian Natural Resources • Talisman Energy

• ARC Resources • Birchcliff Energy

• Nexen Inc. • MEG Energy Corp.

Investor Relations Presentation - October 2010

 MARKET SHARE
• 2009 waste and water disposal market approximately $1.5
billion in size
• Estimate of water and waste volumes processed in 2009:
22%

CCS
Newalta
7% Secure
PALKO
3% Producers
2%
66%

Source: GeoScout at April 30, 2010 - Aggregate 2009 data (OGC, ERCB, SIR databases)

Investor Relations Presentation - October 2010

 Q2 2010 FINANCIAL HIGHLIGHTS
Figures in $000s except Three months ended June 30 Six months ended June 30
per share amounts 2010 2009 Change 2010 2009 Change

Revenue 3,521 2,150 64% 8,835 5,416 63%

Operating expenses 2,630 1,628 62% 5,913 3,882 52%
Operating margin 892 522 71% 2,923 1,535 90%
Operating margin (%) 25% 24% 33% 28%

General & Administrative 804 543 48% 1,595 1,263 26%

EBITDA (before restructuring costs) 87 (21) 1,327 272 388%

Per share, basic and diluted $0.01 $0.00 $0.09 $0.04 125%

Net income (loss) (1,008) (1,729) (919) (2,678)

Per share, basic and diluted ($0.07) ($0.24) ($0.06) ($0.37)

Weighted average units 15,420 7,200 15,379 7,200

outstanding (000s)

Investor Relations Presentation - October 2010

 OPERATING MARGIN
For the years ended December 31:
2006 2007 2008 2009
($000’s) ($000’s) ($000’s) ($000’s)
Revenues 9.65 14.12 18.65 11.55
Operating Margin 5.05 7.49 7.9 3.4

Operating Margin % 52% 53% 42% 29%

For the six months ended June 30 (unaudited):

2007 2008 2009 2010
($000’s) ($000’s) ($000’s) ($000’s)
Revenues 6.96 9.87 5.42 8.84
Operating Margin 3.85 4.29 1.53 2.92

Operating Margin % 55% 43% 28% 33%

Investor Relations Presentation - October 2010

 CAPITALIZATION
At October 8, 2010:

TSX symbol: PLK

Shares outstanding: 23 million
Closing share price: $1.07
Market capitalization at Aug. 27: $24.4 million

Insider ownership*: 66% (Gibson 39%)

Public float: 34% or 7.8 million shares
52 week price range: $0.75 - $1.70

* Includes Manvest Inc.

Investor Relations Presentation - October 2010
 SENIOR MANAGEMENT TEAM
Jay B. Simmons, CA, Chairman & Chief Executive Officer
President, Simmons Financial Holdings Corporation.

Steven Peterson, President

Co-founder of Palko Energy in Spring 2008, over 35 years in oilfield production, construction, maintenance,
consulting and management, including four years on the Board of Weyburn Inland Terminal.

Corey Zahn, CGA, CA, Vice President Finance & Chief Financial Officer
Joined in October 2010, has over 20 years of corporate financial experience including 11 yrs. in VP Finance
and CFO roles with private and public oilfield service companies and 9 years as Sr. Manager with KPMG LLP.

Niels Versfeld, B.Sc. (Hons), MBA, Vice President Corporate Development

Joined in 2009, environmental consulting background, 4 years at CCS in regulatory development.

Don Johnson, RET, Vice President Operations

Joined in 2006, over 23 years of oilfield experience with 14 years in waste management operations and
construction including six years at Anadime Processing and four years at Newalta.

Brian Johnson, Vice President Sales & Marketing

Joined in 2006 in business development role, has over 22 years of oilfield waste management experience
including leading sales and marketing for CCS, and six as facility owner and operator for private firm.

Investor Relations Presentation - October 2010

 BOARD OF DIRECTORS
Jay B. Simmons, Chairman
President, Simmons Financial Holdings Corporation

Steven Peterson
President, Palko Environmental Ltd.

A. Stewart Hanlon
President and Chief Executive Officer, Gibson Energy ULC

Rick M. Wise
Senior Vice President, Operations, Gibson Energy ULC

Sam Parrotta
Chief Financial Officer, Onni Group of Companies

William P. Robinson
President, Manvest Inc.

Investor Relations Presentation - October 2010

 INVESTMENT SUMMARY
1. Excellent market! Large and growing in complexity…

2. Well positioned
• Geographic locations

• Customer driven demand

• Active sales force

3. Meeting demand for technology & innovation

Investor Relations Presentation - October 2010

 THANK YOU

www.palko.com

Investor Relations Presentation - October 2010