SCOTTSDALE, AZ, Aug. 15, 2012 -- Alanco Technologies Inc. (OTCBB: ALAN) subsidiary Alanco Energy Services Inc. ("AES") has commenced commercial operation of its new "Deer Creek" treatment and disposal facility for oil and gas produced water, located near Grand Junction, Colorado.

AES's recently completed Phase I investment program totaled approximately $3,000,000, which included, at the Deer Creek facility, construction of two evaporation ponds for water disposal, totaling over eight surface acres; a state-of-the-art produced water treatment facility to remove hydrocarbons and entrained solids; and a 1952 foot injection well awaiting final permitting approval. Also included in the AES Phase I investment was the purchase and environmental permitting of a nearby 160 acre property, designated "Indian Mesa," for future expansion.

Bob Kauffman, Alanco CEO, commented, "We are looking forward to developing a major new Alanco business opportunity in the western Colorado produced water market by providing local oil and gas producers with significant cost savings, and outstanding customer service. Our current plan includes additional pond construction at the Deer Creek site, and at our nearby 160 acre Indian Mesa site, as well as final approval of the Deer Creek injection well. We are also actively pursuing advanced technology solutions to further treat and refine produced water for agricultural applications and recycle for oil field fracking use.

"I would also like to acknowledge the outstanding performance of AES's operating management partner, TCO Operating LLC, in this very successful completion of our Phase I 'open for business' status. TCO's Tom Pool and Craig Creel have utilized all of their combined 60 or 70 years of oil and gas experience to position AES on its present highly promising course."

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