Elkwater Resources Ltd. Announces Details of Rights Offering - Seite 2

Subscribers in the previously announced non-brokered private placement as provided for in the reorganization agreement dated June 25, 2014 among the Corporation and Doug Bailey, Frank Muller, Darrin Drall, Glenn Cartier and Ryan Heath and which closed on July 9, 2014 (the "Private Placement") have agreed not to participate in the Rights Offering and will not be entitled to exercise, sell or convey any Rights issued in respect of Common Shares acquired in the Private Placement or Common Shares issued on the exercise of warrants acquired in the Private Placement. Accordingly, a maximum of approximately 4.78 million Common Shares will be issued pursuant to the Rights Offering for maximum gross aggregate proceeds of approximately $478,000. Elkwater will use the proceeds of the Rights Offering for capital expenditures and general corporate purposes.

Pursuant to the requirements under applicable securities legislation, a rights offering circular of the Corporation dated July 30, 2014 (the "Rights Offering Circular") has been filed with the securities regulatory authorities in the Qualifying Jurisdictions. The Rights Offering Circular and related materials will be delivered to all shareholders of the Corporation as of the Record Date. Rights certificates will be issued and forwarded by Elkwater only to holders of Common Share who are resident in one of the Qualifying Jurisdictions.

Registered shareholders wishing to exercise their rights must forward the completed rights certificates along with the applicable funds to the subscription agent for the Rights Offering, Alliance Trust Company (the "Subscription Agent"), by the Expiry Date. Shareholders who own their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

Rights certificates will not be issued and forwarded by Elkwater to holders of Common Shares not resident in the Qualifying Jurisdictions. Instead, Rights otherwise issuable to such holders will be issued to and held, as agent, by the Subscription Agent, which will use its reasonable commercial efforts to sell the Rights on behalf of all such holders prior to the Expiry Date and then forward the net proceeds pro rata to such holders.

Completion of the Rights Offering is subject to receiving all necessary regulatory approvals, including, but not limited to, the TSXV.

About Elkwater

Elkwater is a Calgary, Alberta based company engaged in the oil and gas exploration and development industry. The Corporation's Common Shares are listed on the TSXV under the trading symbol "ELW".