RedWater Energy Corp.
TSX VENTURE : RED

RedWater Energy Corp.

October 05, 2011 11:31 ET

RedWater Energy Announces Final Closing of Non-Brokered Financing

OKOTOKS, ALBERTA--(Marketwire - Oct. 5, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) is pleased to announce that it has completed the final tranche of its previously announced $3.6 million financing by issuing 129,000 common share units ("Units") and 182,100 "flow-through" units ("FT Units") at a price of $0.40 per Unit and $0.46 per FT Unit for aggregate gross proceeds of $135,366.00.

Each Unit consists of one common share in the capital of RedWater (a "Common Share") and one-half of one common share purchase warrant (a "Warrant") of RedWater. Each FT Unit consists of one flow-through common share of RedWater (a "FT Share") and one-half of one Warrant. Each FT Share will qualify as a "flow-through share" for the purposes of the Income Tax Act (Canada). Each whole Warrant entitles the holder thereof to acquire one Common Share at an exercise price of $0.60 per Common Share until April 4, 2013, subject to acceleration. All securities issued pursuant to the financing are subject to a four-month hold period.

The total amount raised by RedWater pursuant to its financing is $2,617,452.40 through the issuance of 819,000 Units and 4,977,940 FT Units.

Management expects proceeds from this financing and our recently expanded bank credit facility will be sufficient to complete a capital program of 4-6 new wells. Drilling began September 30, 2011. The first well has been cased and is awaiting completion. A second well was spuded October 4, 2011 with drilling to reach target depth within three to four days. RedWater has identified over 20 initial light oil drilling locations in the Redwater area with additional follow-up locations upon drilling success.

Gary Waters reports "The Company looks forward to reporting on our progress over the coming months. We would like to thank all of our shareholders who have continued to support RedWater Energy since its inception."

Including the issuance of shares detailed in this news release, there are currently 30,398,732 Common Shares issued and outstanding.

In connection with the final closing of the financing, RedWater paid cash commissions of $5,121.96 and issued compensation warrants to purchase 11,166 Units at an exercise price of $0.40 per Unit until October 4, 2012. Receiving brokers included All Group Financial Services Inc. and Union Securities Ltd.

Business of RedWater Energy Corp.

RedWater Energy Corp. is an emerging oil and gas exploration and development company. RedWater is engaged in the acquisition, enhancement and exploration of conventional oil and gas projects in Western Canada with a focus on developing high working interest light oil opportunities. RedWater's core properties are located in Redwater, Westlock, Fairydell-Bon Accord and Long Coulee areas of Alberta. www.redwaterenergy.com.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although RedWater believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, RedWater disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S Person" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of RedWater. The securities of RedWater have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.

Neither 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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