RedWater Energy Corp.

RedWater Energy Corp.

August 24, 2011 16:00 ET

RedWater Energy Announces Non-Brokered $3.6 Million Financing

OKOTOKS, ALBERTA--(Marketwire - Aug. 24, 2011) -


RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) announced today, that it intends to complete a non-brokered private placement financing pursuant to which it proposes to raise gross proceeds of up to $3,600,000 through the issuance of common share units ("Units") and "flow-through" units ("FT Units") at a price of $0.40 per Unit and $0.46 per FT Unit.

Each Unit is to consist 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 is to consist 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 shall entitle the holder thereof to acquire one Common Share at an exercise price of $0.60 per Common Share for a period of 18 months following the closing of the financing, subject to acceleration. All securities issued pursuant to the financing will be subject to a four-month hold period. Finders' fees may be payable to eligible persons with respect to the financing and will be subject to regulatory approval.

Net proceeds from this financing will be used to fund an initial six to eight well drilling program in Redwater. Drilling is expected to begin two weeks after the closing of this financing subject to equipment availability. RedWater intends to use its existing working capital line and cash flow from operations to expand its drilling program above the initial six to eight wells and/or for acquisitions.

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.

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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