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
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. 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.