RedWater Announces Financial and Operating Results for the Twelve Months Ended December 31, 2012

OKOTOKS, ALBERTA–(Marketwired – May 2, 2013) –RedWater Energy Corp. (“RedWater”) (TSX VENTURE:RED) is pleased to report financial and operating results for the three and twelve month periods ended December 31, 2012. RedWater’s interim condensed financial statements and related management’s discussion and analysis for the three and twelve months ended December 31, 2012 have been filed and are available on the SEDAR website at www.sedar.com and may also be obtained on RedWater’s website at www.redwaterenergy.com.

Q4 Highlights

• Increased average production to 148 boepd production
• Improved average oil production to 104 bbls/d
• Completed successful re-entry at Davey Lake
  • Management expects to initially produce the well at a restricted daily rate of 45 barrels of oil and 300 mcf of gas. Tie-in to occur in late Q2
• Drilled one well in Redwater targeting Mannville oil
  • Well to be completed after spring break-up

Strategic Acquisition

• Closed $2.5 million acquisition at January 31, 2013
• Assets are contiguous to our current asset base in Redwater and Westlock
• 45 barrels of oil per day and 180 mcf per day of natural gas (30 boepd) for a total of 75 boepd
• Company acquired 9.4 sections of undeveloped land in Redwater and Westlock
• The oil production has a reserve life index of 10.7 years

Financial Highlights

Operational Review

In the fourth quarter, RedWater focused on continued improvement on production and reducing operating costs. The completion of the previously announced battery at Redwater allowed the Company to put on production, two Bruderheim light oil wells. The wells are currently producing at a steady rate of 30 barrels of oil per day. A prospective oil well drilled at the battery is to be completed after spring break-up. Additional planned battery enhancements will further reduce operational costs and improve fluid handling capabilities for the area.

RedWater recompleted a well at Davey Lake targeting Pekisko light oil. This well is expected to be tied-in and producing late in the 2nd quarter. The Company has additional shut-in gas wells that will be re-activated as natural gas prices continue to improve. Total corporate production in February 2013, including a full production month of the acquisition, was 142 barrels of oil per day and 549 mcf of natural gas per day (91 boepd) for a total of 234 boepd.

OUTLOOK

RedWater is pleased with the growth and operational improvements we achieved during the year, but understand there is more work to be done. An initial horizontal drill location is planned offsetting a Leduc oil well producing 15 barrels of oil per day. The pool has an estimated 1,341,000 barrels of original oil in place and a net pay thickness of 42 feet which may facilitate additional drill locations. RedWater has secured an additional 480 acres of crown mineral rights surrounding the pool during 2012. Subsequent to year end 2 wells were drilled at Redwater. One well has been tested as a minor gas producer. The 2^nd well, directly offsetting a 70 bod light oil producer, is to be stimulated after expiry of road bans. At Legal, a Viking light oil pool has been targeted for future development on the Company’s lands. RedWater has an extensive land base with a significant inventory of drilling, stimulation, re-activation and completion projects. Management is committed to enhancing production through the optimization of current assets to improve shareholder value.

We are currently reviewing different capital sources to accelerate growth including working with industry partners.

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 Panny areas of Alberta. www.redwaterenergy.com.

Cautionary Statements

Forward-looking information and statements

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following; the timing for completion and equipping of wells; the volume and product mix of RedWater’s oil and gas production and its ability to develop RedWater’s oil resource properties, the use of the RedWater’s cash flow from operations and expanded credit facilities; the number of wells to be drilled and potential development drilling and number of potential oil development locations.

In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of RedWater which have been used to develop such statements and information but which may prove to be incorrect. Although RedWater believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because RedWater can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: results from drilling and development activities consistent with past operations; the continued and timely development of infrastructure in areas of new production; continued availability of debt and equity financing and cash flow to fund RedWater’s current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which RedWater operates; the timely receipt of any required regulatory approvals; the ability of RedWater to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which RedWater has an interest in to operate the field in a safe, efficient and effective manner; the ability of RedWater to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of RedWater to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which RedWater operates; the ability of RedWater to successfully market its oil and natural gas products that all necessary regulatory approvals will be obtained as and when required, that there will be no material adverse change in RedWater’s affairs or laws, rules or regulations relating to RedWater, its securities or business, there will be no regulatory proceedings involving RedWater or any of its directors or officers, or any cease trade or other order prohibiting or restricting trading in RedWater’s securities, no major national or international event will have occurred that has or would reasonably be expected to have a material adverse effect on financial markets or the business, operations or affairs of RedWater.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statement, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of RedWater’s products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of RedWater or by third party operators of RedWater’s properties, increased debt levels or debt service requirements; inaccurate estimation of RedWater’s oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in RedWater’s public disclosure documents, (including, without limitation, those risks identified in this news release and RedWater’s public company documents filed on SEDAR).

The forward-looking information and statements contained in this news release speak only as of the date of this news release, and RedWater does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Funds flow from operations are not measures that have any standardized meaning prescribed by IFRS or Canadian GAAP and accordingly are referred to as non – GAAP measures. Therefore, these measures may not be comparable to similar measures presented by other issuers. These measures have been described and presented here and in our MD&A in order to provide shareholders and potential investors with additional information regarding Redwater’s liquidity and its ability to generate funds to finance its operations. Management utilizes “Funds flow from operations” as a key measure to assess the ability of RedWater to finance operating activities and capital activities. All references to funds flow from operations throughout this report are calculated based on cash flows from operating activities before changes in non-cash working capital. Cash flows from operating activities are the closest comparable figure which is calculated in accordance with IFRS and Canadian GAAP.

BOE Equivalent

Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.