Arete Industries Fact Sheet (OTCQB:ARET)


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Arête is the operator of a gas gathering system and is in the process of buying oil and gas properties in the Rocky Mountain Region of the United States.

The Company is pursuing projects that have significant upside potential and can produce significant revenue. As the projects are developed, Arête, or entities created by Arête, will have ownership interests in the revenue streams, which can be securitized and collateralized either equity or private debt holders. Enabling the company to continue to grow, fulfill its ongoing financing requirements, and create value for its shareholders.

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Arete Industries Fact Sheet (OTCQB:ARET)

  1. 1. OTCQB / OTCBB : ARET 8/30/2011 OverviewArête Industries, Inc. (“Arête” or “the Company”) is in theprocess of buying oil and gas properties in the Rocky MountainRegion of the United States and is the operator of a gasgathering pipeline. The Company is pursuing projects thathave significant upside potential and can produce significantrevenue.Arête Industries, Inc. is a Colorado corporation and is listedon the OTCQB market under the ticker symbol ARET. TheCompany has been publicly traded since 1987, and hasover 8,000 shareholders. The Company is headquartered inWestminster, Colorado. Investment Highlights • Arête Industries, Inc. is an oil and gas play focused Strategy on properties located in Wyoming, Colorado, Kansas, and Montana with significant existing production and upside potential.Arête’s primary focus is on the Powder River Basin. Although • The Company’s primary focus is on the Powderthe Company is currently concentrating this rich basin, it is River Basin, one of the richest petroleum provincesnot limited to any single geographic area because it wants to in the Rocky Mountains. More than 2.7 billionremain flexible and intends to strategically pursue acquisition barrels of recoverable oil and over 2.3 TCF gasopportunities in other geographic regions as they present have been discovered in about 700 fields sincethemselves. The Company intends to focus its exploration the discovery of the giant Salt Creek field in 1908.activities in large new or developing plays that provide it withthe opportunity to acquire undeveloped acreage positions for • One of the Company’s other targeted geographicfuture drilling operations. Arête’s drilling program will attempt regions is the Denver-Julesburg (DJ) Basin, a richto take advantage of the 660,062 barrels proven oil reserves deposit of oil and natural gas located in northeastunder its control. Although its current drilling schedule does not Colorado and extending into Wyoming andtarget drilling for natural gas, the Company has 12,832,822 McF Nebraska.of proven natural gas reserves under its control, with another • Based on the Company’s current drilling schedule,3,600,974 McF of probable and 6,720,041 McF of possible we expect revenue growth of 98% on a 3-yearnatural gas reserves. As such, depending on access to capital CAGR from 2011 through 2014.and the price of natural gas, it has a vast amount of untapped • Arête Industries has a tight capital structure withnatural gas under its control without acquiring any additional only 7.7 million shares outstanding as of Augustacreage from which to increase production. 15, 2011.The Company intends to drill and complete approximately 12 • Arête management intends to move the Company to a listed exchange in the near future, which willadditional wells during 2011 with a cost of $1.9 million with increase liquidity and institutional buying interestannualized production of 95,040 BOE. in the stock.During 2012, the Company expects to drill ten School Creeks • The Company is lead by Donald Prosser, a financewells with a cost of $5.15 million with annualized production of professional with a successful track record of334,800 BOE. business development and Charles B. Davis, an industry veteran with over 25 years of experienceBeyond 2013, the drilling schedule is less clear. The future in the oil and gas industry.beyond 2012 depends on access to capital and the ability toidentify attractive drilling opportunities.
  2. 2. Recent Events Quick Facts & Key RatiosIn late August 2011, Arete paid $3.7 million in connection with 12-Month Trading Price High $6.15its previously announced acquisition of certain oil and gasgenerating assets. In addition, the Company sold a portion of 12-Month Trading Price Low $2.50its recently acquired assets in which it had a profits interest for Closing Price 8-30-2011 $3.40a profit of $2,655,221 or $0.35 per share. This enabled Areteto make a payment of approximately $1.2 million on the next Shares Outstanding 8-15-2011 7,701,848installment due September 15, 2011. Market Capitalization $26,186,283 Enterprise Value $26,520,045 Investment Summary Last Quarter Revenue $16,000 TTM Revenue $114,000In summary, the Company is participating in several exciting oil Current Assets (Most Recent 10Q or 10K) $481,279and gas plays with vast reserves lead by an industry veteran Current Liabilities (Most Recent 10Q or 10K) $1,171,574with over 25 years of experience. The Company’s wells arestrategically positioned to take advantage of the significant Current Ratio (Most Recent 10Q or 10K) .41xin-place oil and gas reserves. Among Arête Industries’ other Total Assets (Most Recent 10Q or 10K) $1,236,905investment positives are its tight capital structure with only 7.7million shares outstanding. In addition, Arête management Total Liabilities (Most Recent 10Q or 10K) $1,171,574intends to move the Company to a listed exchange in the near Shareholder Equity (Most Recent 10Q or 10K) $65,331future, which will increase liquidity and institutional buyinginterest in the stock. Arête Industries Acreage Map - 30,654 Acres Montana - 200 Acres Wyoming - 27,334 Acres   Toole County - 200 Acres Campbell County - 11,300 Acres Weston County - 1,303 Acres Converse County - 10,119  Acres  Colorado - 2,000 Acres Niobrara County - 1,897 Acres  Arapahoe County - 1,375 Acres Albany County - 963 Acres  Yuma County - 125 Acres  Sweetwater County - 1,752 Acres  Cheyenne County - 125 Acres  Baca County - 375 Kansas - 1,120 Acres  Norton County - 320 Acres  Stanton County - 800 Acres LEGEND Basins Shale Gas Plays Powder River Basin Additional Information Arête Industries, Inc. 7260 Osceola Street Spacing Westminster, Colorado 80030 State Basin County Field Acres Units Wyoming Powder River Converse 10,119 640 (303) 427-8688 Wyoming Powder River Weston 1,303 640 Wyoming Powder River Campbell Buff Field 2,000 320 Wyoming Powder River Niobrara 1,897 320 The WSR Group Wyoming Powder River Campbell 9,300 640 Wyoming Laramie Albany Rex Lake 963 320 3557 SW Corporate Parkway Wyoming Washakie Sweetwater Wamsutter 1,752 320 Palm City, FL 34990 Colorado D-J Arapahoe Dragon 1,375 320 Colorado D-J Cheyenne Arapahoe 125 320 (772) 219-7525 Colorado D-J Yuma Wildhorse 125 320 Gerald Kieft / Sean Marconi Colorado Hugoton Embayment Baca Greenwood/Walsh 375 320 Kansas Salina Basin Norton 320 320 Kansas Hugoton Embayment Stanton Big Bow West 800 320 Montanta Sweetgrass Arch Toole Police Coulee 200 320 TOTAL 30,654Important Note: This profile may contain forward-looking statements, particularly as related to pro forma financial statements, earnings estimates and business expectations, within the meaning of Section 27Aof the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Any statements that express or involve discussions withrespect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be “forward looking statements.” For-ward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events todiffer materially from those presently anticipated. These forward-looking statements are only made as of the date of their release and Arete Industries does not undertake any obligation to publicly update suchforward-looking statements to reflect subsequent events or circumstances.