ARET Arete Industries Inc (CE)

Arete Industries, Inc. (OTCQB:ARET) today issued the following letter to shareholders.

Dear Valued Shareholders,

2011 was an exciting and productive year for Arete Industries and this letter highlights what the Company accomplished in 2011 and what is expected for 2012.

During 2011 Arete Industries completed the following:

• Brought the Company current with the SEC by collectively filing 20 annual and quarterly reports;  
• Met all requirements and began trading on the OTC Markets QB exchange;  
• Held the Company's first annual meeting in six years;  
• Reversed the common stock, raised capital to pay liabilities and purchased oil and gas properties;  
• As of June 30, 2011 the Company reported shareholder equity of $65,331, which was the first time the Company reported positive shareholder equity in over ten years. It was an increase of $1,524,418 over the period ended June 30, 2010;   
• More importantly, as of September 30, 2011, the Company reported $7,339,645 in shareholder equity up $9,031,920 from the period ended September 30, 2010;  
• Contracted and purchased 37,000 plus acres of leases and 92 operating wells, in Kansas, Wyoming, Colorado, and Montana;  
• Sold 7,700 of the aforementioned acres of leases and 11 operating wells, in Wyoming, for a profit of approximately $2.5 million and kept a royalty interest in the property;  
• In the third quarter ended September 30, 2011, the Company sold $5,250,000 of our Series 1-A preferred stock and closed a significant acquisition of oil and gas assets;  
• In the third quarter ended September 30, 2011, the Company reported net income of $2,150,944 up from a loss of ($712,040) for the period ended September 30, 2010;  
• The Company is currently producing approximately 150 BOE per day and has over 25,000 acres of leases for development;  
• The Company owns a five mile natural gas pipeline with an original cost of $4,000,000 that was purchased for $330,000 and we are evaluating the best use of this asset, and;  
• The Company applied for listing on a major stock exchange.

The plans and expectations for the Company for the remainder of 2011 and 2012 are as follows:

• Expect the oil and natural gas revenue for the 4th quarter ended December 31, 2011 to be approximately $800,000;  
• Complete a drilling plan for five infill wells in Kansas and three infill wells in Colorado, with the first permit planned for December 2011;  
• Completing the negotiations for three properties in Wyoming to be included in a sale, joint venture or a farm-out agreement to develop the property with horizontal drilling;  
• Interviewed and have extended offers to four independent members to the Company's Board of Directors;  
• Applied for a $2,000,000 line of credit at a bank;  
• Signed a contract to be interviewed on Money TV for the next quarter;  
• Planning to present at three oil and gas conferences in the Spring 2012;  
• Expect to earn approximately $0.62 per share in 2012, and;  
• Continue to pursue additional opportunities for the growth of the Company.

Recent revenue from production:

The revenues from the wells purchased from April 1, 2011 to September 30, 2011:

	April	May	June	July	August	September
Production Revenue	$343,999	$369,921	$316,957	$300,766	$202,700	$210,029
Taxes	$ 25,558	$26,558	$ 23,612	$ 21,672	$ 13,897	$ 13,172
LOE	$123,222	$132,796	$ 99,186	$104,899	$ 96,886	$ 88,583
Net Production	$195,274	$207,597	$194,160	$174,196	$ 91,919	$108,274
Average BOE Price	$ 98.55	$ 98.58	$ 87.78	$ 87.85	$ 74.51	$ 74.82

The net production from April 1 to July 29 of $771,227 has been treated as an adjustment to purchase price for accounting proposes and the remaining $200,193 has been included in the statement of income.  

All of these achievements would not have been possible if it were not for the hard work of the current board of directors, officers and consultants that share our long term vision for the Company. Most importantly the support of you the stockholders have kept us focused on the vision.

Sincerely,

Donald W. Prosser

Chairman and Chief Executive Officer

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About Arete Industries

The Company holds oil and gas properties in the Rocky Mountain Region of the United States and operates a small natural gas gathering system. For additional information on the Company visit our website at: http://www.areteindustries.com

SAFE HARBOR

This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this report, such as statements regarding our future expectations to increase our production are forward-looking statements (often, but not always, using words such as "expects", "anticipates", "plans", "estimates", "potential", "possible", "probable", or "intends", or stating that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved). Forward-looking statements are based on our current expectations and assumptions about future events and involve inherent risks and uncertainties. These risks include, but are not limited to, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition and government regulation or other actions. Additional information on these and other factors which could affect Arete's operations or financial results are included in Arete's reports on file with the Securities and Exchange Commission. Such factors (many of which are beyond our control) could cause actual results to differ materially from those set forth in the forward-looking statements. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. Arete undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in Arete's expectations.

CONTACT: Gerald Kieft
         The WSR Group
         772-219-7525
         IR@theWSRgroup.com