THOMAS P. RAABE
                            Attorney at Law
                      2305 Canyon Blvd., Suite 103
                          Boulder, Colorado 80302


                            December 1, 1998
                               
                               
Arete Industries, Inc.
2305 Canyon Blve., Suite 103
Boulder, Colorado 80302


     Re:  SEC Registration Statement on Form S-8

Gentlemen:

I am counsel for Arete Industries, Inc., a Colorado
corporation (the "Company") in connection with its proposed
registration under Form S-8 of the Securities Act of 1933, as
amended ("the Act"), of Fifty Million (50,000,000) shares of its no
par value Common Stock which may be issued to certain
employees, advisors and consultants under several individual
stock compensation plans as to which this opinion is a part, to be
filed with the Securities and Exchange Commission ("the
Commission").

In connection with rendering my opinion as set forth below, I
have reviewed and examined originals or copies identified to my
satisfaction of the following:

    (1)  Amended and Restated Articles of Incorporation of the 
Company, as filed with the Secretary of State of the State of Colorado
on September 18, 1998.

          (2)   By-laws of the Company and Resolutions of the
Board of Directors dated October 30, 1998 authorizing the issuance
of Common Shares pursuant to certain stock compensation plans to
certain employees, consultants and advisors, which have been
certified by the proper officers of the Company as being in
full force and effect.

     (3)  The Registration Statement and exhibits thereto as
filed with the Commission.

I  have  examined such other documents and records,
instruments and certificates of public officials, officers and
representatives of the Company, and have made such other
investigations as I have deemed necessary or appropriate under
the circumstances. In connection with rendering this opinion,
I have reviewed such statutes and judicial precedents as I
have deemed relevant and necessary.  In my examination, I have
assumed the genuineness of all signatures, the legal capacity
of natural persons, the authenticity of all documents submitted
to us as originals, the conformity with, the original documents
of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such copies.
I have further assumed that the recipients of shares under
advisory or consulting agreements will pay the consideration
required under the terms of the respective agreement prior to
the issuance of such shares.  Based upon the foregoing and in
reliance thereon, it is my opinion that shares of Common Stock
to be issued in the manner contemplated under the referenced
compensation plan and underlying agreements will, upon the
receipt of full payment, issuance and delivery in accordance
with the terms thereof, be duly and validly authorized, legally
issued, fully paid and nonassessable in accordance with the
Company's Articles of Incorporation, as amended and pursuant to
the Colorado Business Corporation Act, 1973 C.R.S. 7-101-101 et
seq., as amended.

This opinion is limited to the laws of the state of Colorado
and the Colorado Business Corporation Act, and I express no
opinion with respect to the laws of any other jurisdiction.
While this opinion is given for the sole benefit of the
Company, I consent to you filing this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement on Form S-8. This opinion is not to be
used, circulated, quoted or otherwise referred to for any other
purpose without my prior written consent.   This opinion is
based upon my knowledge of the law and facts as of the date
hereof. I assume no duty to communicate with you with respect
to any matter which comes to my attention hereafter.  This
opinion has been issued after full disclosure to the Company
and waiver by duly authorized officers of the Company of a
conflict of interest created by the fact that the undersigned
is receiving certain shares of common stock from the Company as
compensation for services as an employee of the Registrant, which shares
are being registered under the Form S-8 registration statement
for which this opinion is being provided.


                            Very truly yours,


                        By: /ss/ Thomas P. Raabe
                        Thomas  P. Raabe, Attorney at Law