RedWater Energy Corp.

RedWater Energy Corp.

February 01, 2011 09:15 ET

RedWater Energy Announces Sale of Red Earth and Loon Properties for Total Consideration of $2.3 Million

OKOTOKS, ALBERTA--(Marketwire - Feb. 1, 2011) - RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) announced today it has closed the sale of its Red Earth and Loon properties to an E&P company for a total consideration of $2.3 million. The transaction closed on January 31, 2011. At closing, RedWater received $2.1 million in cash and one section of mineral rights. Proceeds from the sale will be used to develop RedWater's extensive current inventory of light oil drilling and recompletion opportunities, and for acquisitions and other general corporate purposes.

RedWater acquired the winter-only access properties in two separate transactions in late 2009. These properties produced approximately 40 boepd in the first quarter of 2010 and averaged 20 boepd for the entire 2010 fiscal year. Redwater will continue to hold a 63% working interest in one producing and one shut-in gas well located in Acadia acquired in the 2009 transactions.

"The sale of these properties allows RedWater to focus its entire efforts on developing its sizable undeveloped land base. RedWater currently has in excess of 30,000 net acres of primarily 100% working interest mineral holdings located at Redwater, Westlock and Fairydell-Bon Accord," stated Gary Waters, Chairman, President and CEO of RedWater. "We are looking forward to developing our existing land base over the coming months. Initial drilling will begin in the Redwater area in early February."

Business of RedWater Energy Corp.

RedWater Energy Corp. is a junior 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, and Fairydell-Bon Accord 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.

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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