2010-11-04-2010-10-25

To acquire an interest in production and workover opportunities on 3,500 E TX acres.

Exterra Energy Inc. Amarillo, Texas, (OTCBB: EENI) plans to acquire an interest in production and workover opportunities in East Texas from an undisclosed independent producer for an undisclosed price.

The asset consists 3,500 acres of production in the Woodbine formation in one of the oldest and largest producing fields in the U.S. The field represents solid producing reserves and a very large proven developed reserve portfolio. Low-risk upside includes currently producing wells with workover and deepening potential, and new drilling potential. Exterra estimates that within six to eight months, the field will produce an average of $500,000 in monthly net income. Currently, the field is producing approximately $200,000 in gross income per month.

Exterra chief executive Todd Royal says, "This acquisition is an anchor project which will help Exterra build upon its growth and increase its shareholder value. The company will use part of its $10 million line of credit to close this acquisition."

The deal is expected to close by Nov. 1.

Exterra is committed to a strong acquisition strategy to purchase producing oil properties that are undervalued due to current market conditions. The company currently has approximately 9.7 million shares outstanding.