News

ANTERRA ENERGY ANNOUNCES OPERATIONS UPDATE, THIRD QUARTER RESULTS

CALGARY, ALBERTA, November 28, 2008 – Anterra Energy Inc. (“Anterra” or the “Company”) today announced its financial and operating results for the three month and nine month periods ended September 30, 2008. The unaudited financial statements, notes and MD&A for the period are filed on SEDAR at www.sedar.com and are available on Anterra’s website at www.anterraenergy.com.

HIGHLIGHTS

• Funds flow from operations for the third quarter increased to $637,295 from $502,189 in the third quarter of 2007, and to $1,945,896 for the first nine months of 2008 from $1,255,686 in the same period a year earlier, primarily as a result of higher oil and gas prices and an increased contribution from midstream operations.
   
• The midstream business delivered a third quarter operating margin of $223,133, an increase of 72 percent from $129,374 for the same quarter last year.  For the nine months ended September 30, 2008 the midstream operating margin was $459,827 compared to $302,104 for the same period in 2007.
   
• Consolidated average production for the quarter of 214 barrels of oil equivalent per day (boepd) compared to an average 277 boepd in the third quarter of 2007.  Production consisted of 70 percent oil and 30 percent gas.
   
• Net loss for the quarter was $69,023 compared to a net loss of $48,014 for the same quarter in 2007.  Net loss for the first nine months of 2008 was $102,794 compared to a net loss of $184,515 during the same period last year.
   
• Capital investment for the third quarter of 2008 was $957,765 and for the first nine months of 2008 capital investment was $4,581,382.

“Higher oil prices during the third quarter together with a stronger contribution from midstream processing operations have led to an increase in revenues compared to 2007, but these positives have been partially offset by cost increases in all areas and reduced oil and gas production,”  said Owen Pinnell, Chairman and CEO.  “The flat to declining production during the third quarter is a consequence of our strategy to maintain production from our legacy assets while focusing management attention on developing our resource plays.  The results of this change in focus should become apparent early in 2009 when we expect oil production from the Frontier Lower Shaunavon joint venture project with Reece Energy where we have drilled and completed our first horizontal well, to lead to higher levels of production.”  

FINANCIAL SUMMARY

	Three Months September 30, 2008		Three Months September 30, 2007		Nine  Months September 30, 2008		Nine Months September 30, 2007
Oil and Gas Production
Revenue	1,823,500		1,673,343		5,741,478		4,276,030
Royalties	(179,778)		(134,676)		(490,726)		(348,547)
Gross overriding royalties	3,761		2,832		7,245		6,331
Net revenue	1,647,483		1,541,499		5,257,997		3,933,814
Operating costs	679,948		696,660		2,295,953		1,670,363
Oil and gas operating margin	967,535		844,839		2,962,044		2,263,451
Midstream Processing
Revenue	449,238		325,793		1,193,394		866,496
Operating costs	226,105		196,419		733,567		564,392
Midstream operating margin	223,133		129,374		459,827		302,104
Other revenue	-		-		-		-
Intersegment revenue and cost	(36,895)		(44,056)		(130,507)		(139,097)
Total Net Revenue	2,059,826		1,823,236		6,320,884		4,661,213
Total Operating Costs	869,158		849,024		2,899,013		2,095,659
Total Operating Margin	1,190,668		974,212		3,421,871		2,565,554
Expenses
General and administration	482,093		437,042		1,290,664		1,127,391
Stock compensation	60,189		10,282		160,182		97,408
Interest	71,280		34,981		185,311		182,477
Depletion, depreciation, accretion	676,515		601,581		1,935,177		1,436,565
Total Expenses	1,290,077		1,083,886		3,571,334		2,843,841
Net Loss Before Tax	(99,409)		(109,674)		(149,463)		(278,287)
Provision For Taxes	(30,386)		(61,660)		(46,669)		(93,772)
Net Loss	(69,023)		(48,014)		(102,794)		(184,515)
Earnings (loss) per Class A  share
Basic	(0.002)		(0.002)		(0.003)		(0.009)
Fully Diluted	(0.002)		(0.002)		(0.003)		(0.009)
Weighted Average Number of Class A Shares In Thousands	32,169,040		25,483,100		32,169,040		20,683,700
Funds Flow From Operations	637,295		502,189		1,945,896		1,255,686
Funds Flow Per Class A Share	0.020		0.020		0.061		0.061

THREE MONTHS ENDED SEPTEMBER 30, 2008

Revenues for the three months ended September 30, 2008 were $2.24 million, 14 percent higher than the $1.96 million during the same quarter of 2007. The increase in revenue was driven primarily by higher realized oil and natural gas prices. Production volumes during the third quarter were 214 boepd, 23 percent lower compared to 277 boepd during the third quarter of 2007. For the quarter ended September 30, 2008, the Company reported a net loss of $0.07 million as compared to a net loss of $0.05 million for the same quarter a year earlier.

EBITDA (earnings before interest, income tax, depreciation and amortization expenses, and other non-cash and/or non-recurring items) during the third quarter of 2008 was $0.71 million, or $0.02 and $0.02 per basic and diluted share, respectively, as compared to $0.54 million, or $0.02 and $0.02 per basic and diluted share, respectively, during the third quarter of 2007.

Oil and gas operating expenses increased to $0.68 million during the three months ended September 30, 2008 as compared to $0.70 million for the same period last year.

Depreciation, depletion and amortization expenses were $0.64 million during the three months ended September 30, 2008 as compared to $0.57 million for the same quarter in 2007.

General and administrative expenses increased to $0.48 million during the three months ended September 30, 2008 from $0.44 million for the same quarter a year earlier. This was primarily a result of an increase in the number of employees.

Non-cash stock-based compensation expense was $0.06 million for the three months ended September 30, 2008 compared to $0.01 million for the same period in 2007.

Interest expense was $0.07 million for the three months ended September 30, 2008 compared to $0.03 million for the three months ended September 30 a year earlier.

NINE MONTHS ENDED SEPTEMBER 30, 2008

Revenues for the nine months ended September 30, 2008 increased by $1.80 million to $6.81 million from $5.01 million during the nine months ended September 30, 2007. The increase in revenues was primarily driven by higher realized natural gas and oil prices, with a solid increase in midstream revenues during the period. Production volumes during the nine months of the year were 229 boepd, 10 percent lower compared to 255 boepd during the same period in 2007.

For the nine months ended September 30, 2008, the Company reported a net loss of $0.10 million, as compared to a net loss of $0.18 million for the same period during 2007.

EBITDA (earnings before interest, income tax, depreciation and amortization expenses, and other non-cash and/or non-recurring items) for the nine months ended September 30, 2008 was $2.13 million or $0.066 per basic share, as compared to $1.44 million or $0.070 per basic share for the same period a year earlier.

Oil and gas operating expenses increased to $2.30 million during the nine months ended September 30, 2008 as compared to $1.67 million for the same period of 2007, largely due to high maintenance and well work-over costs.

Depreciation, depletion and amortization expenses were $1.82 million for the first nine months of the year as compared to $1.34 million during the same period last year.

General and administrative expenses increased to $1.29 million during the nine months ended September 30, 2008 from $1.13 million during the same period in 2007.

Non-cash, stock-based compensation expense was $0.16 for the first nine months of the year compared to $0.10 million for the same period a year earlier.

Interest expense was $0.19 million for the nine months ended September 30, 2008 compared to $0.18 million for the same period in 2007.

OPERATIONS UPDATE:

In addition to maintaining cash flow from its conventional assets, Anterra’s greatest focus by far over the past nine months has been on progressing the Company’s resource plays.  We have stabilized production from our legacy assets and executed farm-out agreements over most of our conventional drilling opportunities.  We have maintained production at Breton at 150 boepd despite gas plant downtime and minor well work.  At Judy Creek the LSD 14-20 Detrital gas well is on production at an estimated 160 mcf/d (26 boepd). As this is less than test rates, the well may require a stimulation to reach its production potential. Also at Judy Creek, the Company’s joint venture partner is scheduled to spud the first of two Swan Hills reef test wells in December.  At Shadow, the first earning well targeting the Gilwood encountered water. The well is being evaluated for uphole potential.

At Frontier in SW Saskatchewan we established the joint venture with Reece Energy Exploration Corp. under which Reece will invest $3.5 million in the Lower Shaunavon play, including the drilling of one horizontal well, to earn 50% of Anterra’s interest.  Through this joint venture partnership Anterra and Reece have acquired 12 sections (6 net) of additional land in the Lower Shaunavon play.  The first horizontal well at LSD 15-06-04-20W3M has been drilled and completed.  The well was drilled vertically to 1,450 meters and laterally an additional 1,300 meters.  The lateral leg was then perforated in 9 intervals: each interval was fraced with a 30 tonne frac.  The well is now on pump and starting to produce some oil.  With an interest in 14 ¾ sections of land and 70 potential horizontal well locations, Anterra is well positioned for significant growth from the area.

"We’re very pleased that we were able to quickly drill and complete the first horizontal well at Frontier,” said Bill Johnson, President and COO.  “As of the date of this report the well is producing over 300 bpd of completion fluids. Based on experience with similar wells in the area, we expect oil production, once 50% to 60% of the 5,000 barrels of completion fluids have been recovered.  We have made excellent progress expanding our land position at Frontier to just under 10,000 gross acres.”   

OUTLOOK

In 2009 and beyond, Anterra’s business plan will focus on the methodical development of the Frontier Lower Shaunavon play with horizontal wells and multi stage fracs.  The first area of concentration will be the 1,760 acre northern land block where there are as many as 10 Lower Shaunavon locations.  Following further geological work, the first horizontal well will be drilled on the 7,680 acre southern block where Anterra is a 50% interest partner with Reece Energy.  There are potentially 60 Lower Shaunavon locations to be drilled on the southern block.  Anterra and its joint venture partner hope to embark on a multi-well development program during 2009, however weak commodity prices could result in lower funds flow for the Company and as a result, a slower pace of development.

In addition to the Shaunavon project, Anterra is presently acquiring land over the Bakken in SE Saskatchewan and is also posting crown land over a tight gas play in central Alberta.  As the Company is preserving most of its capital for the development of the Frontier project, these activities are somewhat cash constrained for the near future.

About Anterra Energy

Anterra Energy is an independent exploration, development and production company with an emerging focus on the use of advanced technologies including 3-D imaging, horizontal drilling and multi-stage completions to systematically develop its portfolio of conventional and non-conventional oil and gas projects. Complementing this strong exploitation and development focus, the Company owns and operates fee-based midstream facilities in western Canada.  Anterra is a public Canadian company listed on the TSX Venture Exchange under the symbols AE.A and AE.B. More information about Anterra is available on the internet at www.anterraenergy.com.

For further information, please contact:

Owen C. Pinnell Chairman and Chief Executive Officer Anterra Energy Inc. Telephone:       (403) 215-2427 Facsimile:        (403) 261-6601 E-mail: pinnello@anterraenergy.com

Bill Johnson President and Chief Operating Officer Anterra Energy Inc. Telephone        (403) 215-2384 Facsimile:        (403) 261-6601 E-mail: johnsonb@anterraenergy.com

Forward-Looking Information

This news release contains forward-looking information related to the Company’s planned land acquisitions, drilling program, production and operating costs. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to, financing risks and risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates in relation to reserves, production and expenses; health, safety and environmental risks; and the uncertainty of dealing with government and obtaining regulatory approvals). Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the Company's securities should not place undue reliance on them.

Funds flow from operations is not a recognized measure under Canadian generally accepted accounting principles (GAAP). However, management believes that funds flow from operations is a useful measure of financial performance. For the purposes of funds flow from operations calculations, funds flow is defined as “Funds flow from operations” before changes in non-cash operating working capital. Anterra’s determination of funds flow from operations may not be comparable to that reported by other companies.  In addition, the term BOE or BOEs may be misleading, particularly if used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6 Mcf per one (1) BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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