2010-08-31-2010-08-19-2010-08-19

Acquired 3,100 acres in N TX Barnett oil/gas window, gaining 35 BO/d.

Exterra Energy Inc., Amarillo, Texas, (OTCBB: EENI) has acquired 3,100 acres of mineral leases in the north-west corner of the Barnett shale in the dual oil/gas window of North Texas from an undisclosed seller for an undisclosed price.

The assets include 52 wells on the property, of which 44 are producing an average of 35 barrels of oil per day. The eight non-producing wells are scheduled to be worked over and put back online. They are projected to produce five barrels per day each, bringing the total daily production to 72 barrels per day.

Exterra plans to develop 10 new oil wells at an estimated cost of $75,000 per well.

The acquisition was funded with $10-million line of credit with Happy State Bank. This 10-well program will be followed by another 80-well drilling program. After targeting the shallow region, Exterra plans to seek deeper zones which would include the dual completion Barnett shale.

Exterra chief executive Todd R. Royal says, "The acquisition of this new property located in the Barnett oil/gas window lends to our business plan of acquiring strong producing assets with solid upside potential that are located in proven, tested reservoirs and continue to increase shareholder value."