Symbol			EENI

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Exterra Energy Updates Shareholders - New Management Describes Strategy and Plans for Growth of Emerging Oil and Natural Gas Exploration and Production Company

2009-11-18 09:38 ET - News Release

AMARILLO, Texas, Nov. 18 /PRNewswire-FirstCall/ -- In February 2009, Exterra Energy, Inc. appointed a new management team and undertook a new strategy of aggressive growth through the acquisition and development of undervalued oil and gas producing assets. In a change of control transaction that closed on March 13, 2009, Exterra initiated this new strategy that to date has resulted in the expansion of its reserves and exploration and production assets to over $26 million with nominal debt.

The new management team will apply its significant experience to initiate this expansion strategy and enthusiastically undertakes a new era of growth and transparency with this first Shareholder Update.

Robert Royal, CEO and Chairman, has served as CEO and Chairman of Royalco Oil and Gas and has over 30 years experience in the oil & gas industry, real estate and the financial markets. Mr. Royal is experienced at making companies successful in the public community and maximizing shareholder value. He was the CEO and President of IGE, an oil and gas company, and using his public knowledge and skills was able to reverse merge IGE into Life Partners Holdings. Today Life Partners is a very successful company trading on the Global NASDAQ Market with a current market cap in excess of $280 million.

Todd R. Royal, President and Director, has served as President and Director of Royalco Oil and Gas since 1995. Mr. Royal is a Texas Tech University graduate with over 20 years of executive marketing to high-end clients and contract negotiations. Mr. Royal is highly skilled in PR with many different levels of clients from field hands to accredited investors. Mr. Royal has also been involved in the public arena and was instrumental in helping Robert Royal formulate the overall strategic plan with IGE. Mr. Royal brings a highly attuned understanding of startup public companies and what they need to be successful.

"With the new line of credit facility we have been able to negotiate with a syndicate led by a local bank we have been doing business with for many years, Exterra is in a strong position to capitalize on the current economic environment to grow into a solid E&P company with quality assets," explains Robert Royal, Exterra's CEO and Chairman. "Expanding on the additions we have already made to our balance sheet and the revenues they are generating, we expect to be able to identify many significantly undervalued performing assets and we are certainly in a position to aggressively pursue them," continues Royal.

Exterra's accomplishments since the appointment of its new management team include:

    --  Newly acquired assets have resulted in the overall reserves and asset
        base growing to almost $27,000,000.

    --  The first newly acquired asset was a 25% profit interest in a soon to be
        equipped Commercial Salt Water Disposal Well in the heart of the Barnett
        Shale in Johnson County, Texas, which is heavily surrounded by both XTO
        and Devon.

    --  Third Party engineering gives this facility an average EBITDA of over
        $8,000,000 per year with a 10 year valuation of over $68,000,000

    --  The Company also recently acquired another strong reserve portfolio in
        two different leases in both Jack County and Parker County, Texas.

    --  Third party engineering by the reserve engineering firm Harper and
        Associates gave the discounted value of these PUDs at $20,000,000

Exterra has already commenced a work-over program on the field it owns in the Permian Basin in West Texas with developable mineral acres and producing oil and gas wells. As a result of this program, Exterra has wells being chemically treated and put online and has developed a new saltwater disposal facility that will allow it to increase production from this Pecos County property. Exterra has also negotiated a new gas contract with Panther Pipeline and Southern Union that should result in increasing revenues.

Exterra also holds an interest in approximately 5000 gross acres in the Newark East (Barnett Shale) area with a reserve estimate of total proved reserves of 230 MBO and 8.5 BCF of natural gas producing on the acreage. The Barnett Shale gas field is undoubtedly one of the largest producing gas fields in the continental U.S. today and Exterra is committed to developing and expanding its acreage and assets within the core area of the field and has established a field office in Parker County, Texas to direct this expansion.

Further Exterra assets include a 5% interest in a 65 mile long Panther Pipeline in Bosque County, Texas and an interest in a salt water disposal well located in Wise County, Texas currently being deepened to accept larger volumes for potential commercial application and a working interest and operations in 4 drilled and cased Barnett Shale wells which require frac.

"Exterra's strategic plan is to take advantage of the opportunities that exist in the oil and gas industry today by acquiring undervalued producing oil and natural gas wells since many in the industry are heavily leveraged," explains Exterra President Todd Royal. "We intend to capitalize on today's depressed market and the over leveraging of many small independents to greatly increase the footprint of Exterra and take the company to a senior exchange while greatly increasing the shareholder value."

In order to fully exploit this growing assemblage of oil and gas assets, Exterra has also retained the services of Mark McBryde to serve as Consulting Engineer and Nick Steinsberger as Consulting Completion Engineer. Mr. McBryde earned a BS in Petroleum Engineering from Texas Tech University graduating Magna Cum Laude in 1996. Prior to joining Exterra, Mr. McBryde served as President of SkyBridge Energy LLC, operating in north-central Texas since 2007. He has over 20 years experience in field operations and petroleum engineering having spent time in the field prior to advancing his education. Prior to SkyBridge Energy, Mark worked for Anadarko Petroleum and Southwestern Energy. He has domestic and overseas engineering experience having worked many different onshore assets as well as the world class fields of Algeria. He last held the position of Texas Gulf Coast Production Engineering Manager responsible for oversight of Anadarko's Austin Chalk and Gulf Coast properties.

Mr. Steinsberger ranks as one of the most knowledgeable professionals in the Barnett Shale play. Nick helped pioneer the Barnett Shale and developed the slick water frac that is used today. Also, while with Mitchell Energy/Devon, Nick developed and drilled the first horizontal wells in the Newark East Field. Nick oversees all field operations and well completion from start to finish.

"We have assembled a team of professionals prepared to execute our business plan and as we build Exterra, we are committed to transparent communication and to the responsibility we have to our shareholders to expand the value of their investment," continues President Todd Royal. "We have already demonstrated that commitment through the 100 share distribution we made to every existing shareholder."

For further information, visit: www.exterraenergyinc.com

Statements contained in this press release that are not based upon current or historical fact are forward-looking in nature. Such forward-looking statements reflect the current views of management with respect to future events and are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, or described pursuant to similar expressions.

    Contact:

    Exterra Energy, Inc.
    561 630 2980
    info@exterraenergyinc.com

Exterra Energy, Inc.

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