RedWater Continues to Increase Production and Cash Flow in First Quarter of 2014

RedWater Energy Corp. ("RedWater") (TSX VENTURE:RED) is pleased to report record
financial and operating results for the three month period ended March 31, 2014.



Highlights



--  Generated cash flow from operations of $249,551 in the first quarter of
    2014 compared to a negative cash flow of ($41,010) in first quarter of
    2013; 
--  Achieved an operating netback of $22.61 per boe in the first quarter of
    2014, a 41.8% increase over the first quarter 2013 operating netback of
    $15.95 per boe; 
--  Averaged production of 301 boe/d in the first quarter of 2014, an
    increase of 29.2% from 233 boe/d of production in the first quarter of
    2013 
--  Gross revenue(net of royalties) increased to $1,449,176 in the first
    quarter of 2014, an increase of 87.6% from $798,715 in the first quarter
    of 2013 
--  Net well operating revenue increased to $612,804 in the first quarter of
    2014, an increase of 83%, compared to $344,388 in the first quarter of
    2013 

                                  Three Months Ended     Twelve Months Ended
                                           March 31,            December 31,
                                    2014        2013        2013        2012
                            ------------------------------------------------
Operations                                                                  
Production                                                                  
  Oil (bbls/d)                       176         133         129          88
  Natural Gas (Mcf/d)                751         598         635         188
                            ------------------------------------------------
  BOEPD                              301         233         235         119
                                                                            
Average Selling Price                                                       
  Oil ($/bbls)                    $90.48      $59.74      $78.98      $71.36
  Natural Gas ($/Mcf)               6.36        2.62        3.14        2.47
                            ------------------------------------------------
  BOE ($/BOE)                     $68.83      $40.93      $51.93      $56.49
                                                                            
Operating Netback ($/BOE)         $22.61      $15.68      $15.96      $16.25
                                                                            
                                                                            
                                                                            
                                 Three Months Ended     Twelve Months Ended 
                                          March 31,            December 31, 
                                   2014        2013        2013        2012 
                            ------------------------------------------------
Financial                                                                   
                                                                            
Petroleum and Natural Gas                                                   
Revenues, net of royalties    1,449,176     798,715   3,785,662   2,196,769 
                                                                            
Fund Flow from Operations       249,551     (41,010)    (89,774)   (332,493)
  Per Share, Basic & Diluted       0.01       (0.00)       0.00       (0.01)
                                                                            
Income (loss)                  (145,889)   (429,167) (1,528,667)   (921,650)
  Per Share, Basic & Diluted      (0.00)      (0.01)      (0.04)      (0.03)
                                                                            
Capital Expenditures            232,967   3,140,449   4,609,889   3,730,798 
Total Assets                 19,550,524  18,988,760  19,576,162  14,707,325 
Shareholders' Equity          6,571,421   7,266,692   6,717,310   7,566,686 
                                                                            
Common Shares Outstanding                                                   
Basic                        40,233,250  34,840,152  40,233,250  34,840,152 
Diluted                      40,233,250  34,840,152  40,233,250  34,840,152 
                                                                            
Share Trading                                                               
  High                             0.13        0.19        0.19        0.32 
  Low                              0.06        0.10        0.07        0.11 
  Close                            0.11        0.12        0.08        0.15 
Trading Volume                  552,588   2,861,457   5,596,730   2,945,537 



Operational Review

RedWater has continued to focus on increasing cash-flow in the core
RedWater-Westlock core area. RedWater exited the first quarter with record daily
average production of 301 boepd. Production was 58% oil weighted for the first
quarter. Management has continued to focus on optimizing daily production and
the development of its existing properties in 2014, targeting those properties
with the highest risk/return profiles. 


The Company has identified a full inventory of near term drilling, tie-in and
re-completion opportunities which will be the focus in 2014. In addition,
management has identified opportunities to improve netbacks through capital
improvement projects on certain wells in its core areas of Redwater and
Westlock. 


RedWater's interim condensed financial statements and related management's
discussion and analysis for the three months ended March 31, 2014 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.


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 within the Redwater to Westlock corridor in Central 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: 
Gary Waters
President & CEO
RedWater Energy Corp.
[phone]
[e-mail]