RedWater Announces Financial and Operating Results for the Nine Months Ended September 30, 2012

RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) is pleased to report record
financial and operating results for the three and nine month periods ended
September 30, 2012. RedWater's interim condensed financial statements and
related management's discussion and analysis for the three and nine months ended
September 30, 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.


Highlights



--  Increased average production to 135 boepd, an increase of 51% over the
    second quarter 
--  Improved average oil production to 107 bbls/d, an increase 45% over the
    second quarter 
--  Achieved positive fund flows from operations in the quarter 
--  Netbacks increased to $23.37 per boe vs. $14.12 in the second quarter 
--  Currently testing recompleted well at Davey Lake 
    --  Recompleted Pekisko light oil well at Davey Lake mid November 
    --  Expect to announce results early December 

                            Three Months Ended        Nine Months Ended     
                               September 30,             September 30,      
                                 2012         2011         2012         2011
                        ----------------------------------------------------
Operations                                                                  
Production                                                                  
  Oil (bbls/d)                    107           66           82           53
  Natural Gas (Mcf/d)             168          342          163          230
                        ----------------------------------------------------
  BOEPD                           135          123          109           91
                                                                            
Average Selling Price                                                       
  Oil ($/bbls)                 $71.44       $68.20       $71.42       $72.99
  Natural Gas ($/Mcf)            2.26         3.53         2.14         3.60
                        ----------------------------------------------------
  BOE ($/BOE)                  $59.42       $46.45       $56.89       $51.27
                                                                            
Operating Netback                                                           
 ($/BOE)                       $23.37       $11.77       $16.50       $16.38





                           Three Months Ended         Nine Months Ended     
                              September 30,             September 30,       
                                2012         2011         2012         2011 
                        ----------------------------------------------------
Financial                                                                   
                                                                            
Petroleum and Natural                                                       
 Gas Revenues, net of                                                       
 royalties                   637,470      480,830    1,509,880    1,169,370 
                                                                            
Fund Flow from                                                              
 Operations                    9,839     (136,976)    (245,221)    (382,356)
  Per Share, Basic &                                                        
   Diluted                      0.00        (0.01)       (0.01)       (0.02)
                                                                            
Income (loss)               (164,163)    (413,952)    (629,234)     371,797 
  Per Share, Basic &                                                        
   Diluted                     (0.00)       (0.02)       (0.02)        0.01 
                                                                            
Capital Expenditures         641,705    1,398,146    1,804,060    1,936,801 
Total Assets              12,881,241   10,282,683   12,881,241   10,282,683 
Shareholders' Equity       7,859,102    7,933,113    7,859,102    7,933,113 
                                                                            
Common Shares                                                               
 Outstanding                                                                
Basic                     33,740,152   26,030,902   33,009,495   25,081,956 
Diluted                   33,740,152   26,030,902   33,009,495   25,081,956 
                                                                            
Share Trading                                                               
  High                          0.25         0.49         0.32         0.55 
  Low                           0.16         0.32         0.16         0.32 
  Close                         0.19         0.35         0.19         0.35 
Trading Volume               771,100      738,000    2,303,500    4,134,300 



Operational Review 

In the third quarter, RedWater focused on improving production and reducing
operating costs. The completion of the battery at Redwater allowed the Company
to put on production two light oil wells recompleted in the second quarter.
These wells produced throughout the third quarter. In addition, the increased
production in Redwater allowed the company to lower operating costs and led to
improved netbacks. Operating netbacks improved 66% over the second quarter. 


RedWater recompleted a well at Davey Lake targeting Pekisko light oil. This well
is currently being tested and we expect the well to be put on production in the
first quarter. In addition, RedWater has begun preparing drilling leases in
advance of its 4 well vertical drilling program targeting Manville (Bruderheim
and Ellerslie) light oil in Redwater. The Company expects to spud its first of
four wells prior to year end. We have also begun preparation for a second 4 well
drilling program targeting Manville, Leduc and Keg River oil. We expect the
second drilling program to commence in the second half of 2013. 


OUTLOOK 

RedWater is pleased with the growth and operational improvements we achieved in
the third quarter, but understand there is more work to be done. We continue to
evaluate and review our large asset base to find ways to improve overall
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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
RedWater Energy Corp.
Gary Waters
President & CEO
[phone]
[e-mail]
www.redwaterenergy.com