RedWater Energy Corp.

RedWater Energy Corp.

September 12, 2011 13:55 ET

RedWater Energy Announces Second Closing of Non-Brokered $3.6 Million Financing

OKOTOKS, ALBERTA--(Marketwire - Sept. 12, 2011) -


RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) is pleased to announce that it has completed the second tranche of its previously announced $3.6 million financing by issuing 3,726,540 "flow-through" units ("FT Units") at a price of $0.46 per FT Unit for aggregate gross proceeds of $1,714,208.

Each FT Unit consists of one flow-through common share of RedWater (a "FT Share") and one-half of one common share purchase warrant (a "Warrant") of RedWater. 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 in the capital of RedWater (a "Common Share") at an exercise price of $0.60 per Common Share until March 9, 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 the financing is now $2,517,000 through the issuance of 690,000 common share units ("Units") and 4,871,740 FT Units. Each Unit consists of one Common Share and one-half of one Warrant.

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.

Including the issuance of shares detailed in this news release, there are currently 30,163,532 Common Shares issued and outstanding.

In connection with the second closing of the financing, RedWater paid cash commissions of $102,852.50 and issued compensation warrants to purchase 223,592 Units at an exercise price of $0.40 per Unit until September 9, 2012. Receiving brokers included Acumen Capital Finance Partners Limited, Union Securities Ltd. and BMO Nesbitt Burns.

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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