Brookwater Ventures Inc.
TSX VENTURE : BW.H

May 26, 2011 18:11 ET

Brookwater Ventures Acquires Agua Grande and Completes Change of Business

CALGARY, ALBERTA--(Marketwire - May 26, 2011) - Brookwater Ventures Inc. (TSX VENTURE:BW.H) ("Brookwater" or the "Company") is pleased to announce that it has completed the acquisition (the "Acquisition") of Água Grande Exploração e Produção de Petróleo Ltda, a private limited Brazilian company ("Água Grande"). In consideration of the Acquisition, the Company issued a total of 13,250,000 common shares to the shareholders of Água Grande. The common shares issued have a hold period expiring on September 27, 2011.

The Acquisition constitutes a Change of Business under the policies of the TSX Venture Exchange (the "Exchange"), and Brookwater is now classified as an oil and gas issuer.

On closing of the transaction, the subscription receipts issued in the non-brokered private placement originally announced on December 21, 2010 have converted into 6,000,000 common shares of Brookwater and the gross proceeds of $1,500,000 have been released from escrow. In connection with the financing, the Company issued 72,500 finders' warrants. Each finder warrant is exercisable into one common share of the Company at a price of 25 cents per share until January 12, 2012. The Company also paid finders' fees of $5,000 and issued 52,500 common shares to finders at a deemed price of $0.25 per common share. The common shares issued have a hold period expiring on May 29, 2011.

The Company has also issued 20,140,000 common shares at a deemed price of 25 cents per share, upon conversion of the $5,035,000 Água Grande debenture financing that was also announced on December 21, 2010. 10,940,000 of the common shares issued are subject to a hold period expiring on May 29, 2011.

The proceeds of both financings will be used by the Company to finance the exploration program on the Company's Block REC-T-166 oil and gas concession, for general working capital purposes, and to expand its acquisition, exploration and development activities.

The board of directors of the Company now consists of Stan Bharti, Ahmed Said, Peter Boot and Wagner Freire. The new management team comprises Shannon Pohl as President and Chief Executive Officer, Dan Bruno as Vice President of Corporate Development, Darren Moulds as Chief Financial Officer, Scott Ackerman as Corporate Secretary, and Wagner Freire as President of Água Grande.

The Company has also granted a total of 5,500,000 stock options to directors, officers and employees of the Company. The options have an exercise price of 26 cents and expire in five years.

Pursuant to the terms of an escrow agreement dated April 19, 2011, among the Company, CIBC and certain escrowed securityholders, a total of 27,950,000 common shares have been placed in escrow, whereby ten per cent will be released on issuance of the Final Exchange Bulletin, and the balance of such shares will be released in equal tranches of fifteen per cent every six months thereafter.

At the opening of the market on May 30, 2011, the Company's common shares will transfer from the NEX Board to the TSX Venture Exchange as a Tier 2 Oil & Gas Issuer and will commence trading under the trading symbol "BW".

On behalf of the Board of Directors of BROOKWATER VENTURES INC.

Shannon Pohl, President & CEO

About Brookwater Ventures Inc.

Brookwater Ventures is an emerging Brazilian oil and gas company. Through its wholly-owned subsidiary, Água Grande Exploração e Produção de Petróleo Ltda., the Company is a party to a Farm-Out Agreement with Somoil Internacional de Petróleo Ltda. and Sonangol Starfish Oil & Gas S.A., pursuant to which Água Grande acquired an undivided 30% interest in an oil & gas exploration concession (Block REC-T-166) located in the Recôncavo Basin, onshore Brazil.

Please refer to the Company's NI 51-101 compliant technical report on the Block REC-T-166 Concession dated December 31, 2010 entitled "Evaluation of the Interests of Brookwater Ventures Inc. in the REC-T-166 Block in the Recôncavo Basin Brazil", available on the SEDAR profile of the Company at www.sedar.com.

This news release may contain forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in the management discussion and analysis section of our interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulations. We do not assume any obligation to update any forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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