Performance Claims of New Kelso Valve Confirmed

VANCOUVER, BRITISH COLUMBIA and LISLE, ILLINOIS--(Marketwire - Aug. 16, 2012) - Kelso (TSX VENTURE:KLS)(OTCQX:KEOSF) reports that its high-performance specifications for its new external pressure relief valve (EPRV), the JS75XH/27, has been successfully performance tested and confirmed by an independent engineering test lab in Denver, Colorado as required by the railroad industry.

The JS75XH/27 joins the JS75XL/5 as the second new EPRV that Kelso has created to establish new high-performance specifications that meet the new regulatory standards in development for a number of critical hazardous material applications. The JS75XL/5 meets the new regulatory criteria for insulated/jacketed rail tank cars while the JS75XH/27 meets the new regulatory goals for Package 1 and 2 rail tank cars designed for demanding applications in the transport of crude oil and ethanol.

Test Results

The JS75XH/27 was designed to address a new industry requirement being implemented by the Association of American Railroads (AAR), tank car owners and shippers of hazardous and non-hazardous materials. The design goals were to have an external pressure relief valve that flows at a much higher rate than current valves at a pressure relief setting of 75 PSI that is suitable for both retrofit and new tank car application and, most importantly, require no changes to current mounting configuration. Tests conducted by the independent lab on the JS75XH/27 verified that the performance of the JS75XH/27 will allow tank car owners and shippers to meet the new regulations under review by the Federal Railroad Administration. Management believes that this test clearly establishes the new external JS75XH/27 as the "best available technology" in the market today for its intended HAZMAT and non-HAZMAT applications.

New Regulations

The AAR is developing new guidelines and specifications for pressure relief valves that recognize the changing environments in which railroad tank cars operate. Kelso is an active member on the committees involved in finding innovative solutions to establish improved technology solutions for pressure relief management. The first significant regulation referenced above is due to be announced shortly. The Company will announce the details of this regulation change when it occurs.

Competition

Competitive products may be forthcoming in the future but could be conditional based on their designs and may have to undergo lengthy service trials and applications to gain regulatory approvals from the AAR. This process could take two to three years to achieve giving Kelso a significant competitive advantage.

Kelso also holds patent rights to the external constant-force spring valve design. Any infringements on our patents would be defended vigorously.

Outlook

Our new JS75XL/5 and JS75XH/27 products represent our two entries in a high performance products strategy that undeniably benefits all stakeholders and sets Kelso ahead of its competitors. The much anticipated and needed JS75XL/5 and JS75XH/27 have now both been verified independently as "gold" standard products.

We have gained the confidence and approval of OEM customers over the past two years. We have proven we can handle their large volume requirements to deliver high-quality EPRV products on time. Our current EPRV production facilities in Bonham, TX have been built and verified as modern and state-of-the-art with the ability to handle approximately $40,000,000 of EPRV business annually. We are now working on sales and delivery schedules for 2012 and 2013 with key tank car builders, owners and shippers who transport hazardous commodities such as crude oil, ethanol, petrochemicals and other hazardous and non-hazardous chemicals.

Kelso is bullish about the market outlook for all our products and look forward to the growth of our sales volume over the upcoming years. The successful development of the JS75XL/5 and JS75XH/27 is a key milestone in Kelso's transition into a successful operating company and is expected to account for over $10 million in annual revenue.

We anticipate consistent business growth due, in part, to our new JS75XL/5 and JS75XH/27 and the ability to produce the large quantities of our entire EPRV line as required by OEM customers. Change to Kelso products is being fueled by regulatory developments and the confidence gained through the independent verification that Kelso can deliver reliable "best available" technology solutions with proven economic, reliability and qualitative advantages over our competition.

Our ultimate goal is to have all our products become "gold" standard products on most HAZMAT applications and non-hazardous applications and capture a large share of the market for our products. We are confident that we have created a solid foundation on which to build a successful multi-million dollar business on behalf of the shareholders of Kelso Technologies.

For a more complete business and financial profile of the Company, please view the Company's website at www.kelsotech.com and public documents posted on www.sedar.com.

On behalf of the Board of Directors,

James R. Bond, CEO and President

Legal Notice Regarding Forward Looking Statements: This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements in this news release include that new regulatory changes will require upgraded specifications for relief valves; that the new external JS75XH/27 is the best available technology in the market today for its HAZMAT application; that our revenue opportunities will improve and we will experience sales growth; that we have time and qualitative advantages over our competition; that we can defend our patents; that we can produce large volumes of products as required by our customers; and that from the commercial sales of our EPRV and KKS products Kelso can build a successful multi-million dollar business. The Company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria, hence factors that could cause actual results to be materially different from our expectations include that we may be unsuccessful in raising any additional capital needs that may arise; we may not have sufficient capital to develop, produce and deliver new orders; product development may face unexpected delays; orders that are placed may be cancelled; product may not perform as well as expected; markets may not develop as quickly as anticipated or at all; regulations may not change as expected; and competitors may produce better or cheaper products sooner than we expect. Further, we are reliant on certain key employees who may leave the Company and we may be unable to protect or defend our intellectual property. Investors are cautioned against placing undue reliance on forward-looking statements. We assume no responsibility to update these forward looking statements except to the extent required by law.