Arete To Scale Rockies Holdings With Additional Purchases

To acquire 91 operating wells on approximately 37,000 gross acres in CO, KS, WY & MT.

Arete Industries Inc., Westminster, Colo., (OTCBB: ARET) plans to acquire certain oil and gas operating properties in Colorado, Kansas, Wyoming and Montana from Englewood, Colo.-based companies Tucker Family Investments LLLP, DNR Oil & Gas Inc. and Tindall Operating Co. for $11 million.

The assets include 91 operating wells, approximately 37,000 gross acres that includes approximately 21,000 net acres under lease, and approximately 250 proved undeveloped locations.

If Arete increases proven producing net oil reserves or net gas reserves by drilling or recompletion on certain of the acquired properties in Colorado and Kansas, then the Company will pay $250,000 for every 20,000 barrels or 150 millioncubic feet increase respectively

Cumulative payments under the additional purchase price factor for the Colorado and Kansas properties are limited to $5 million. Arete will also make similar payments to sellers if Arete increases reserves in the Wyoming properties, plus additional payments under a formula by which sellers and the company will share proceeds of sales or production from untapped formations on the properties to be acquired in Wyoming.

Cumulative payments under the additional purchase price factor for the Wyoming properties are limited to $20 million The aggregate of all additional purchase price payments from all factors is capped at $25 million.

Causey Demgen & Moore Inc. is legal advisor to Arete.