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

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



                                     Three Months Ended Twelve Months Ended 
                                            December 31,        December 31,
                                          2012      2011      2012      2011
                                    ----------------------------------------
Operations                                                                  
Production                                                                  
  Oil (bbls/d)                             104        71        88        57
  Natural Gas (mcf/d)                      263       347       188       259
                                    ----------------------------------------
  BOEPD                                    148       129       119       100
                                                                            
Average Selling Price                                                       
  Oil ($/bbls)                       $   71.23 $   76.28 $   71.36 $   74.02
  Natural Gas ($/mcf)                     3.07      2.60      2.47      3.26
                                    ----------------------------------------
  BOE ($/BOE)                        $   55.61 $   48.99 $   56.49 $   50.53
                                                                            
Operating Netback ($/BOE)            $   15.68 $    5.03 $   16.25 $   12.71






                              Three Months Ended       Twelve Months Ended  
                                     December 31,              December 31, 
                                2012         2011         2012         2011 
                        ----------------------------------------------------
Financial                                                                   
                                                                            
Petroleum and Natural                                                       
 Gas Revenues, net of                                                       
 royalties                   686,889      540,890    2,196,769    1,710,260 
                                                                            
Fund Flow from                                                              
 Operations                  (87,273)    (204,643)    (332,494)    (586,999)
  Per Share, Basic &                                                        
   Diluted                     (0.00)       (0.01)       (0.01)       (0.02)
                                                                            
Income (loss)               (292,417)    (548,535)    (921,650)    (176,737)
  Per Share, Basic &                                                        
   Diluted                     (0.01)       (0.02)       (0.03)       (0.01)
                                                                            
Capital Expenditures       1,926,737    2,946,903    3,730,798    4,883,704 
Total Assets              14,707,325   12,334,721   14,707,325   12,334,721 
Shareholders' Equity       7,566,686    8,110,509    7,566,686    8,110,509 
                                                                            
Common Shares                                                               
 Outstanding                                                                
Basic                     34,840,152   32,640,152   34,840,152   32,640,152 
Diluted                   34,840,152   32,640,152   34,840,152   32,640,152 
                                                                            
Share Trading                                                               
  High                          0.20         0.41         0.32         0.55 
  Low                           0.11         0.26         0.11         0.26 
  Close                         0.15         0.34         0.15         0.34 
Trading Volume               643,115      683,400    2,945,537    4,817,700 



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 2nd
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.


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