RedWater Energy Corp.
TSX VENTURE : RED

RedWater Energy Corp.

December 31, 2010 14:06 ET

Redwater Energy Announces Second Closing and Oversubscription for $1.918 Million Total Financing

OKOTOKS, ALBERTA--(Marketwire - Dec. 31, 2010) -

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) announced today, that it has completed a second closing of its non-brokered private placement financing pursuant to which RedWater raised gross proceeds of $385,232.40 through the issuance of 917,220 "flow-through" units ("FT Units") at a price of $0.42 per FT Unit. Each FT Unit consists of one common share (a "Share") in the capital of RedWater, issued on a "flow-through" basis, and one-half of one common share purchase warrant, with each whole warrant entitling the holder thereof to acquire one Share at an exercise price of $0.60 per Share until December 31, 2011. All securities issued pursuant to the financing will be subject to a four-month hold period.

The total amount raised by RedWater pursuant to the non-brokered financing is now $1,918,032.06 through the issuance of 4,566,743 FT Units. RedWater had originally announced the intention to complete a non-brokered financing of up to $1,500,000.

Including the issuance of shares detailed in this News Release, there are currently 24,599,221 Shares issued and outstanding. The net proceeds will be used by RedWater for the further development of core properties located in Redwater, Red Earth, Westlock, and Fairydell-Bon Accord areas of Alberta.

In connection with the second closing, RedWater paid cash commissions of $9,482.59 and issued 22,577 compensation warrants exercisable for units at $0.42 per unit until June 30, 2012. Each unit consists of one Share and one-half of one common share purchase warrant, with each whole warrant entitling the holder thereof to acquire one Share at an exercise price of $0.60 per Share until December 31, 2011.

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, Red Earth, Westlock, and Fairydell-Bon Accord 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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