BlackWatch Energy Services Corp. Announces Expansion of Operations Into Latin America With Two Transactions

BlackWatch Energy Services Corp. ("BlackWatch" or the "Company") (TSX: BWT.TO) is pleased to announce two transactions that mark a significant new initiative into the international marketplace that will provide a platform for additional future growth. These transactions are the acquisition of 6 drilling rigs currently operating in Mexico and the entering into of an agreement to acquire a private directional services company with operations focused in Latin America. BlackWatch is also pleased to announce the appointment of Paul Hudson to the Board of Directors.

Drilling Rigs Acquisition
BlackWatch has completed the acquisition of six drilling rigs currently operating in Mexico from a major international energy services company.

The acquired rigs are three diesel-electric triples and three "super single" style rigs, with maximum depth capacities ranging from 3,500 metres to 4,500 metres. The super single rigs are newly commissioned, state of the art, flexible and capable of operating in deeper applications. The triples have a mixture of self-moving, top drive and pipe handling systems. Included in the acquisition is a full complement of related operating assets including camps and high-end pressure control equipment. The purchase price for the acquisition was US$67.5 million which was settled with cash.

The drilling rigs will be subject to a long term drilling services contract with the vendor, pursuant to the vendor's integrated project management contract with Petroleos Mexicanos ("Pemex"), the national oil company of Mexico. The drilling services contract, to be finalized by BlackWatch and the vendor in the very near future, will provide that the rigs acquired by BlackWatch will be the last third party drilling rigs to be terminated for use by the vendor in the Chicontepec Basin of Mexico. The vendor has multiple long-term contracts with Pemex to drill wells in this region and BlackWatch understands that these Pemex contracts, together with the long-term drilling services contract to be entered into with BlackWatch, will provide drilling operations for BlackWatch in this Basin for several years into the future. The long-term drilling services contract will provide a fixed day rate for each rig, subject to cost escalation adjustments annually. Additionally, BlackWatch's relationship with the vendor has the potential to provide additional services revenue in the future, and allow for the relocation by BlackWatch of currently underutilized equipment from Canada.

The acquired rigs are currently operating in the Chicontepec Basin, which is a large oil basin located north-east of Mexico City covering an area of approximately 3,800 km2. The Chicontepec Basin is a strategic growth area for Pemex which has announced an intention to drill 17,500 wells in this area over the next fourteen years. John King, President and CEO of BlackWatch commented "We are pleased to be able to conclude an acquisition of this size in Mexico, a country which is committed to spending significant capital to offset declining offshore production levels. The ability to keep these rigs highly utilized and generating significant EBITDA for the foreseeable future is also a unique opportunity. I believe that this acquisition will provide a solid base of operations for BlackWatch in Mexico and the region from which we plan to add organic growth in the future."

Directional Services Acquisition

BlackWatch has also entered into a binding letter of intent to purchase a private directional services business for approximately US$16.5 million. The purchase price will consist of a cash payment in the amount of US$3 million, the issuance by BlackWatch of 11.4 million common shares and the assumption of approximately US$400,000 in net debt. The common shares to be issued will be subject to an escrow agreement to be entered into between BlackWatch and the former owners of the business, which will contain both time release and performance release conditions. The closing of this acquisition is expected to occur in late October 2009.

The business to be acquired currently has limited operations in the United States, with the majority of its focus being in Mexico. Demand for directional services is increasing with the shift in drilling operations to horizontal applications, particularly in Latin America. This business has established strong relationships and operating capabilities with key customers in Mexico and the United States, including with large operators in the Haynesville, Barnett and Fayetteville shale regions of the U.S. The business has also established a significant field operating infrastructure in the Chicontepec Basin. The key individuals involved in this business, who pursuant to the transaction are to continue with BlackWatch, have a significant established track record in Latin America. John King stated "Having previously worked with the principals involved in this business in Latin America, and admired what they have developed in a short period of time, I am confident they can continue to generate significant growth for BlackWatch in Mexico and elsewhere in the region. This acquisition, from a service line and geographical point of view, fits extremely well with our long-term vision for BlackWatch."

This acquisition is subject to a number of conditions including BlackWatch's satisfactory due diligence review, the negotiation and execution of a definitive acquisition agreement and the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.

The combination of the drilling rigs acquisition and the directional services business in Mexico will provide the Company with a unique well construction platform to capture organic growth opportunities internationally.

Change in Composition of the Board

Mr. Howard Crone has resigned as a member of the Board of Directors of the Company. The Board of BlackWatch thank Mr. Crone for his contribution to the Company since its inception and wish him well in his future endeavours.

The Board of Directors has appointed Paul Hudson to the Board. Management of BlackWatch believes that Mr. Hudson will provide invaluable guidance on its new international operations due to Mr. Hudson's extensive international energy services experience, especially in Mexico where he resides.

Outlook

BlackWatch anticipates that pro forma the closing of these two acquisitions, BlackWatch will have approximately 240 million common shares outstanding and little or no net debt. Hank Swartout, BlackWatch's Chairman, stated "I am pleased that we have been able to execute these unique acquisitions with the right service lines, the right people and in the right markets. This is a geographic marketplace where both John and I have significant experience and will be an area of meaningful growth for BlackWatch. We are also fortunate to be able to add someone of Paul's caliber to the Board who can be proactive in building our business in Latin America."

Conference Call

The Company will host an investor conference call today at 9:30 a.m. Mountain Daylight Time. Conference call dial-in details are as follows:

Toll-free dial in number: 1 866-792-1318

Conference ID: 5567764

This news release shall not constitute an offer to sell or the solicitation of any offer to buy the securities in any jurisdiction. The common shares to be issued pursuant to the acquisition of the directional services business will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements.

ABOUT BLACKWATCH ENERGY SERVICES CORP.

BlackWatch is a diversified international energy services company that provides a range of services to its customers including drilling and related services, wireline services, oilfield hauling, production services and oilfield equipment rentals. The common shares of BlackWatch trade on the Toronto Stock Exchange under the symbol "BWT".

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information, including the anticipated use of the acquired drilling rigs and the directional services business, the anticipated closing date for the directional services acquisition, the future arrangements to be entered into between BlackWatch and the sellers of the directional services business and BlackWatch's anticipated international business strategy.

These forward-looking statements and information are based on certain key expectations and assumptions made by BlackWatch regarding the sellers fulfilling the terms and conditions under the agreement governing the acquisition of the rigs, the ability to negotiate a definitive agreement with respect to the directional acquisition, receipt of all necessary approvals, and expectations with respect to the contracts, current operations and business prospects relating to the acquired rigs and the acquired business. Although BlackWatch believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because BlackWatch can give no assurance that they will prove to be correct.

Since forward-looking statements and information address future events, by their nature, such statements and information involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, including failure to successfully negotiate a definitive agreement with respect to the directional services acquisition, fluctuations in the market for oil and gas and related products and services; failure of counterGCaeparties to perform on contracts; failure to receive required regulatory approvals; and political and economic condition, including those in Mexico. Blackwatch has provided the forward-looking statements herein in reliance on certain assumptions that they believe are reasonable at this time. These forward-looking statements may change for a number of reasons. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release concerning these times.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of BlackWatch are included in reports on file with the applicable securities regulatory authorities and may be accessed through the SEDAR website ( www.sedar.com). The forward-looking statements and information contained in this news release are made as of the date hereof and BlackWatch undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless as required by applicable securities laws.

Contacts

John King
BlackWatch Energy Services Corp.
President and Chief Executive Officer
(403) 225-3879

Wiley Auch
BlackWatch Energy Services Corp.
Vice President, Finance & CFO
(403) 366-2066

300, 855 - 8 Avenue SW

BlackWatch Energy Services Corp.

Calgary, Alberta T2P 3P1

www.blackwatchenergy.ca