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.
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.