UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)
(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant toss. ss.240.14a-12

EXTERRA ENERGY INC.
----------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party

4) Date Filed:

EXTERRA ENERGY INC.
1717 St. James Place, Suite 205
Houston, Texas 77056
(713) 877-8847

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, DECEMBER 11, 2008

To the Stockholders of Exterra Energy Inc.:

The Annual Meeting of Stockholders of Exterra Energy Inc. (the "Company")
will be held at the Marriott Courtyard, 2900 Sage, Houston, Texas, 77056, at
10:00 A.M. on Thursday, December 11, 2008, for the following purposes:

(1) To elect five Directors of the Company to hold office until the next Annual
Meeting of Stockholders and until their successors have been duly elected
and qualified;

(2) Approve the Exterra Energy Inc. Stock Option Plan and to reserve 3,000,000
shares of common stock for the issuance thereunder;

(3) Approve an Amendment to the Articles of Incorporation of the Company which
increases the aggregate number of shares which the Company shall have the
authority to issue from 75,000,000 to 76,000,000 shares, of which
75,000,000 shares are to be common stock of a par value of $0.001 each and
1,000,000 shares shall be preferred stock with a par value of $0.001 each,
which series, rights and preferences shall be set by the Company's Board of
Directors;

(4) The ratification of the Star of Texas asset acquisition;

(5) The ratification of the issuance of shares of common stock for the
settlement of debts and obligations resulting from the Star of Texas asset
acquisition;

(6) To ratify the selection and appointment by the Company's Board of Directors
of Malone & Bailey, PC, independent auditors, as auditors for the Company
for the year ending May 31, 2009; and

(7) To consider and transact such other business as may properly come before
the meeting or any adjournments thereof.

A Proxy Statement, form of Proxy and the Annual Report to Stockholders of
the Company for the year ended May 31, 2008 are enclosed herewith. Only holders
of record of Common Stock at the close of business on October 27, 2008 will be
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. A complete list of the stockholders entitled to vote will be available
for inspection by any stockholder during the meeting; in addition, the list will

be open for examination by any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting at the office of the Secretary of the Company, located at 1717
St. James Place, Suite 205, Houston, Texas 77056.

Houston, Texas By Order of the Board of Directors,
November 10, 2008
James D. Romano
Secretary

All stockholders are cordially invited to attend the Meeting. If you do not
expect to be present, please sign and date the enclosed form of Proxy and return
it promptly using the enclosed envelope. No postage is required if mailed in the
United States. Any person giving a Proxy has the power to revoke it at any time
prior to its exercise and if present at the Meeting may withdraw it and vote in
person. Attendance at the Meeting is limited to stockholders, their proxies and
invited guests of the Company.

EXTERRA ENERGY INC.
1717 St. James Place, Suite 205
Houston, Texas 77056
(713) 877-8847

PROXY STATEMENT

November 10, 2008

QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING

Why am I receiving these materials?

We have sent you this proxy statement and the enclosed proxy card because
the Board of Directors of Exterra Energy Inc. is soliciting your proxy to vote
at the 2008 Annual Meeting of Stockholders including at any adjournments or
postponements of the meeting. You are invited to attend the annual meeting to
vote on the proposals described in this proxy statement. However, you do not
need to attend the meeting to vote your shares. Instead, you may simply
complete, sign and return the enclosed proxy.

The Company intends to mail this proxy statement and accompanying proxy
card on or about November 10, 2008 to all stockholders of record entitled to
vote at the annual meeting.

Who can vote at the annual meeting?

Only stockholders of record at the close of business on October 27, 2008
will be entitled to vote at the annual meeting. On this record date, there were
approximately 29,774,054 shares of common stock outstanding and entitled to
vote.

Stockholder of Record: Shares Registered in Your Name

If on October 27, 2008, your shares were registered directly in your name
with Exterra Energy Inc.'s transfer agent, Holladay Stock Transfer, Inc., then
you are a stockholder of record. As a stockholder of record, you may vote in
person at the meeting or vote by proxy. Whether or not you plan to attend the
meeting, we urge you to fill out and return the enclosed proxy card to ensure
your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

If on October 27, 2008, your shares were held, not in your name, but rather
in an account at a brokerage firm, bank, dealer, or other similar organization,
then you are the beneficial owner of shares held in "street name" and these
proxy materials are being forwarded to you by that organization. The
organization holding your account is considered to be the stockholder of record
for purposes of voting at the annual meeting. As a beneficial owner, you have
the right to direct your broker or other agent regarding how to vote the shares

in your account. You are also invited to attend the annual meeting. However,
since you are not the stockholder of record, you may not vote your shares in
person at the meeting unless you request and obtain a valid proxy from your
broker or other agent.

What am I voting on?

There are six matters scheduled for a vote:

o Election of five Directors;

o Approval of the Exterra Energy Inc. Stock Option Plan and to reserve
3,000,000 shares of common stock for the issuance thereunder;

o Approval of an Amendment to the Articles of Incorporation of the
Company which increases the aggregate number of shares which the
Company shall have the authority to issue from 75,000,000 to
76,000,000 shares, of which 75,000,000 shares are to be common stock
of a par value of $0.001 each and 1,000,000 shares shall be preferred
stock with a par value of $0.001 each, which series, rights and
preferences shall be set by the Company's Board of Directors;

o Ratification of the Star of Texas asset acquisition;

o Ratification of the issuance of shares of common stock for the
settlement of debts and obligations resulting from the Star of Texas
asset acquisition; and

o Ratification of Malone & Bailey, PC as independent auditors of the
Company for its fiscal year ending May 31, 2008;

How do I vote?

You may either vote "For" all the nominees to the Board of Directors or you
may "Withhold" your vote for any nominee you specify. For each of the other
matters to be voted on, you may vote "For" or "Against" or abstain from voting.
The procedures for voting are fairly simple:

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record, you may vote in person at the annual
meeting or vote by proxy using the enclosed proxy card. Whether or not you plan
to attend the meeting, we urge you to vote by proxy to ensure your vote is
counted. You may still attend the meeting and vote in person even if you have
already voted by proxy.

o To vote in person, come to the annual meeting and we will give you a
ballot when you arrive.

o To vote using the proxy card, simply complete, sign and date the
enclosed proxy card and return it promptly in the envelope provided.
If you return your signed proxy card to us before the annual meeting,
we will vote your shares as you direct.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If you are a beneficial owner of shares registered in the name of your
broker, bank, or other agent, you should have received a proxy card and voting
instructions with these proxy materials from that organization rather than from
Exterra Energy Inc. Simply complete and mail the proxy card to ensure that your
vote is counted. To vote in person at the annual meeting, you must obtain a
valid proxy from your broker, bank, or other agent. Follow the instructions from
your broker or bank included with these proxy materials, or contact your broker
or bank to request a proxy form.

How many votes do I have?

Each share of common stock entitles the holder as of October 27, 2008 to
one vote on any matter coming before the 2008 Annual Meeting of Stockholders.

What if I return a proxy card but do not make specific choices?

If you return a signed and dated proxy card without marking any voting
selections, your shares will be voted "FOR" the election of all five nominees
for Director; "FOR the approval of the Stock Option Plan, "FOR" the
authorization of the preferred stock, "FOR" the ratification of the Star of
Texas assets, "FOR" the ratification of the stock for debt settlement, and "FOR"
the ratification of Malone & Bailey, PC as independent auditors of the Company
for its fiscal year ending May 31, 2009. If any other matter is properly
presented at the meeting, your proxyholder (one of the individuals named on your
proxy card) will vote your shares using his or her best judgment.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to these
mailed proxy materials, our Directors and employees may also solicit proxies in
person, by telephone, or by other means of communication. Directors and
employees will not be paid any additional compensation for soliciting proxies.
We may, however, reimburse brokerage firms, banks and other agents for the cost
of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in more
than one name or are registered in different accounts. Please complete, sign and
return each proxy card to ensure that all of your shares are voted.

Can I change my vote after submitting my proxy?

Yes. You can revoke your proxy at any time before the final vote at the
meeting. If you are the record holder of your shares, you may revoke your proxy
in any one of three ways:

o You may submit another properly completed proxy card with a later
date.

o You may send a timely written notice that you are revoking your proxy
to Exterra Energy Inc.'s Secretary at 1717 St. James Place, Suite 205,
Houston, Texas 77056.

o You may attend the annual meeting and vote in person. Simply attending
the meeting will not, by itself, revoke your proxy.

If your shares are held by your broker or bank as a nominee or agent, you
should follow the instructions provided by your broker or bank.

When are stockholder proposals due for next year's annual meeting?

To be considered for inclusion in next year's proxy materials, your
proposal must be submitted in writing by May 31, 2009. If you wish to bring a
matter before the stockholders at next year's annual meeting and you do not
notify the Company a reasonable time before the Company sends its proxy
materials for the 2009 Annual Meeting of Stockholders, for all proxies we
receive, the proxyholders will have discretionary authority to vote on the
matter, including discretionary authority to vote in opposition to the matter.

How are votes counted?

Votes will be counted by the inspector of election appointed for the
meeting, who will separately count "For" and "Withhold," abstentions and broker
non-votes and, with respect to proposals other than the election of Directors,
"Against" votes. Abstentions will be counted towards the vote total for each
proposal, and will have the same effect as "Against" votes, when applicable.
Broker non-votes have no effect and will not be counted towards the vote total
for any proposal.

What are "broker non-votes"?

Broker non-votes occur when a beneficial owner of shares held in "street
name" does not give instructions to the broker or nominee holding the shares as
to how to vote on matters deemed "non-routine." Generally, if shares are held in
street name, the beneficial owner of the shares is entitled to give voting
instructions to the broker or nominee holding the shares. If the beneficial
owner does not provide voting instructions, the broker or nominee can still vote
the shares with respect to matters that are considered to be "routine," but not
with respect to "non-routine" matters.

How many votes are needed to approve each proposal?

o For the election of Directors, the five nominees receiving the most
"For" votes (from the holders of votes of shares present in person or
represented by proxy and entitled to vote on the election of
Directors) will be elected. Only votes "For" or "Withheld" will affect
the outcome.

o To be approved, Proposal No. 2: the approval of the Stock Option Plan
must receive "For" votes from the holders of a majority of shares
present and entitled to vote either in person or by proxy. If you
"Abstain" from voting, it will have the same effect as an "Against"
vote. Broker non-votes will have no effect.

o To be approved, Proposal No. 3: the approval of the Amendment to the
Articles of Incorporation to authorize preferred shares must receive
"For" votes from the holders of a majority of shares present and
entitled to vote either in person or by proxy. If you "Abstain" from
voting, it will have the same effect as an "Against" vote. Broker
non-votes will have no effect.

o To be approved, Proposal No. 4: the Ratification of the Star of Texas
asset acquisition must receive "For" votes from the holders of a
majority of shares present and entitled to vote either in person or by
proxy. If you "Abstain" from voting, it will have the same effect as
an "Against" vote. Broker non-votes will have no effect.

o To be approved, Proposal No. 5: the Ratification of the issuance of
shares of common stock for the settlement of debts and obligations
resulting from the Star of Texas asset acquisition must receive "For"
votes from the holders of a majority of shares present and entitled to
vote either in person or by proxy. If you "Abstain" from voting, it
will have the same effect as an "Against" vote. Broker non-votes will
have no effect.

o To be approved, Proposal No. 6: the Ratification of Malone & Bailey,
PC as independent auditors of the Company for its fiscal year ending
May 31, 2008 must receive "For" votes from the holders of a majority
of shares present and entitled to vote either in person or by proxy.
If you "Abstain" from voting, it will have the same effect as an
"Against" vote. Broker non-votes will have no effect.

What is the quorum requirement?

A quorum of stockholders for each action to be voted upon at the 2008
Annual Meeting of Stockholders must be present. A quorum for each action will be
present if stockholders holding at least a majority of the outstanding shares
entitled to cast a vote on such action are present at the meeting in person or
represented by proxy. On the record date, there were approximately 29,774,054
shares outstanding and entitled to vote on each of the actions to be voted upon.
Thus, the holders of approximately 15,184,768 shares must be present in person
or represented by proxy at the meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid
proxy (or one is submitted on your behalf by your broker, bank or other nominee)
or if you vote in person at the meeting. Abstentions and broker non-votes will
be counted towards the quorum requirement. If there is no quorum, the holders of
a majority of shares present at the meeting in person or represented by proxy
may adjourn the meeting to another date.

How can I find out the results of the voting at the annual meeting?

Preliminary voting results will be announced at the annual meeting. Final
voting results will be published on the Company's website, announced to the
financial press and published in the Company's annual report on Form 10-K for
fiscal year ended May 31, 2009.

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Exterra Energy Inc. (the "Company") of proxies in the
form enclosed. Such Proxies will be voted at the Annual Meeting of Stockholders
of the Company to be held at Marriott Courtyard, 2900 Sage, Houston, Texas
77056, at 10:00 A.M. on Thursday, December 11, 2008 (the "Meeting") and at any
adjournments thereof for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders.

This Proxy Statement and accompanying Proxy are being mailed on or about
November 10, 2008 to all stockholders of record on October 27, 2008 (the "Record
Date").

Any stockholder giving a Proxy has the power to revoke the same at any time
before it is voted. The cost of soliciting Proxies will be borne by the Company.
The Company has no contract or arrangement with any party in connection with the
solicitation of proxies. Following the mailing of the Proxy materials,
solicitation of Proxies may be made by officers and employees of the Company by
mail, telephone, telegram or personal interview. Properly executed Proxies will
be voted in accordance with instructions given by stockholders at the places
provided for such purpose in the accompanying Proxy. Unless contrary
instructions are given by stockholders, it is intended to vote the shares
represented by such Proxies for the election of the five nominees for director
named herein, for the approval of the Stock Option Plan, for the authorization
of the preferred stock, for the ratification of the Star of Texas assets, for
the ratification of the stock for debt settlement, and for the selection of
Malone & Bailey, PC as independent auditors. The current members of the Board of
Directors presently hold voting authority for Common Stock representing an
aggregate of 12,804,016 votes, or approximately 43% of the total number of votes
eligible to be cast at the Annual Meeting. The members of the Board of Directors
have indicated their intention to vote affirmatively on all of the proposals.

VOTING SECURITIES

Stockholders of record as of the close of business on the Record Date will
be entitled to notice of, and to vote at, the Meeting or any adjournments
thereof. On the Record Date there were 29,774,054 outstanding shares of common
stock, par value $0.001 per share (the "Common Stock"). Each holder of Common
Stock is entitled to one vote for each share held by such holder. The presence,
in person or by proxy, of the holders of a majority of the outstanding shares of

Common Stock is necessary to constitute a quorum at the Meeting. Proxies
submitted which contain abstentions or broker non-votes will be deemed present
at the Meeting in determining the presence of a quorum.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of September 30, 2008, information
regarding the beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of the Company's Common Stock based upon the
most recent information available to the Company for (i) each person known by
the Company to own beneficially more than five (5%) percent of the Company's
outstanding Common Stock, (ii) each of the Company's officers and directors and
(iii) all officers and directors of the Company as a group. Unless otherwise
indicated, each stockholder's address is c/o the Company, 1717 St. James Place,
Suite 205, Houston, Texas 77056.

Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------ ------------------- ----------------

Ray Ledesma 9,352,500(1) 31.41%
James D. Romano 1,500,000 5.04%
John Punzo 596,016(2) 2.00%
Randall K. Boatright 1,050,500 3.53%
Frank Simmen 325,000 1.09%
All Officers and Directors as a Group 12,824,016 43.07%

(1) Ray Ledesma directly owns 1,512,500 restricted common shares (5.08%), Star
of Texas Energy Services, Inc. directly owns 40,000 restricted common
shares (0.13%), Star of Texas Minerals Resources LLC directly owns 620,000
restricted common shares (2.08%) and Hydro-FX Inc. directly owns 135,000
restricted common shares (0.45%). Mr. Ledesma owns 100% of Star of Texas
Mineral Resources, LLC and Hydro-FX Inc. Mr. Ledesma is also the trustee of
SMLL Trust, which holds 100% of the shares of Star of Texas Energy
Services, Inc., which directly holds 7,045,000 restricted common shares
(23.66%).

(2) According to a Management Agreement signed July 1, 2008, Panterra Capital
Inc., a company held 100% by Mr. Punzo received 500,000 common shares on
July 1, 2008 and will receive an additional 500,000 common shares on
January 1, 2009.

PROPOSAL 1.
ELECTION OF DIRECTORS

It is the intention of the persons named in the enclosed form of Proxy,
unless such form of Proxy specifies otherwise, to nominate and to vote the
shares represented by such Proxy for the election as directors of John Punzo,
Ray Ledesma, James D. Romano, Randall K. Boatright and Frank Simmen to hold
office until the next Annual Meeting of Stockholders or until their respective
successors shall have been duly elected and qualified. All of the nominees are
presently directors of the Company. The Company has no reason to believe that

any of the nominees will become unavailable to serve as directors for any reason
before the Annual Meeting. However, in the event that any of them shall become
unavailable, the person designated as proxy reserves the right to substitute
another person of his choice when voting at the Annual Meeting.

Officers and Directors

The officers and directors of the Company are as follows:

Name Position Director Since Age
- ---- -------- -------------- ---

John Punzo Chief Executive Officer, Chairman of the July 1, 2008 53
Board
Ray Ledesma Chief Operating Officer, President December 5, 2006 55
and Director
Randall K. Boatright Chief Financial Officer, Executive December 1, 2007 59
Vice President and Director
James D. Romano Secretary, Treasurer and Director November 14, 2006 51
Frank Simmen Director October 24, 2007 51

All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. We have compensated our
independent director for service by the issuance of 325,000 restricted common
shares of the Company. The Board of Directors and the directors are reimbursed
for expenses incurred for attendance at meetings of the Board and any committee
thereof. Executive officers are appointed annually by the Board and each
executive officer serves at the discretion of the Board. There are no family
relationships among directors or officers.

The business experience of each of the persons listed above during the past
five years is as follows:

John Punzo, Chairman, CEO & Director

Since 1981, Mr. Punzo has served as a Director and as President or Chief
Executive Officer of several businesses. During this time, Mr. Punzo played a
key role in launching, directing and obtaining the funding for a few of these
entities into the public markets. Mr. Punzo has assembled a successful team of
energy experts, along with experienced accountants, financial and legal advisors
to assist his efforts. His experience and corporate leadership, combined with
his dedication to ensuring strict compliance and adherence to the rules and
regulations of the Securities and Exchange Commission, are a matter of record.
In 2002, Mr. Punzo led the restructuring of Sonoran Energy, Inc. into a
successful energy company. He departed in 2004 to further develop his energy
consultancy and private management group. Most recently, Mr. Punzo was CEO of
Wentworth Energy Inc., an East Texas oil and gas exploration company. His
experience and corporate leadership, combined with his prior knowledge of the
oil and gas industry, make Mr. Punzo not only qualified, but also fully
committed to establish Exterra Energy as an industry leader in the oil and gas
sector.

Ray Ledesma, President, COO, & Director

Mr. Ledesma, who has served as a director of Exterra since December 2006,
is President of Star Of Texas Energy Services, Inc. He also serves as President
of The Legacy Corporation, Hydro-FX, Inc., Star Of Texas Mineral Resources, LLC
and is a Managing Member of Barnett Holding, LLC. These entities are in stages
of divesting their assets an are not a distraction or burden on his services to
Exterra. He is a graduate of Rice University with a BS in Chemical Engineering
in 1977. He began his career with Amoco Production Company where he was
re-trained as a petroleum reservoir engineer. Mr. Ledesma is the founder of Star
Of Texas Energy Services, Inc. He has structured and funded drilling programs
that have resulted in over 200 wells and the discovery of five (5) new gas
fields. He has drilled and completed over 90 Barnett Shale Wells since 2001.
Other experiences of note include providing drilling and engineering consulting
services in deep gas plays of western Oklahoma, the Vicksburg gas trend of Starr
and Hidalgo Counties, Texas, as well as the Miocene, Frio and Yegua gas trends
of the Texas Gulf Coast.

Randall K. Boatright, CFO, EVP & Director

Most recently Mr. Boatright served as Interim President and Chief Executive
Officer, Chief Financial Officer and Director of Dexterity Surgical, Inc. He has
extensive experience in the energy business as he was formerly Executive Vice
President, Chief Financial Officer and Director of Abraxas Petroleum Corporation
(NASD:AXAS) and Controller of a large private independent oil & gas company.
Prior to that, Mr. Boatright practiced accounting with the firm of Coopers &
Lybrand LLP. He is a Certified Public Accountant and a graduate of the College
of William & Mary in Virginia.

James D. Romano, Corporate Secretary & Director

Mr. Romano has served as an officer and director of Exterra Energy, Inc.
since November 2006. Prior to joining the Company, Mr. Romano founded Horizon
Industries Ltd. ("Horizon") in 2003, where he aggressively launched the Company
into the oil and gas business in the United States. Mr. Romano acted as
President and Director of Horizon, where he led the company through its
formative stage to production and cash flow. Mr. Romano resigned as an officer
of Horizon in November, 2005 and as a director in February, 2006. For the past
15 years, Mr. Romano has been involved in the management, strategic planning,
corporate communications and financing of companies in the oil and gas, as well
as mining sectors. He has been instrumental in the due diligence and financing
of project acquisitions. Mr. Romano brings a diverse 30 years of business and
entrepreneurial skills to the Company.

Frank Simmen, Director

Since graduating from the University of Texas in 1980 with a Bachelor of
Business degree, Mr. Simmen has been involved solely in the oil and gas
industry. He began his 27 years of experience as a landman with Ballard
Exploration in Houston, Texas. There he concentrated in South Texas, Gulf Coast
and in Louisiana overseeing leasing, drilling, completion and operation of wells
as well as executing acquisitions, divestitures and negotiating farm-ins and
farm-outs with major oil companies. Prior to founding his own company, Jackson
and Simmen Drilling, Inc., he served 12 years from 1998-2003 as Vice President
with McCarthy Oil and Gas. Having a broad knowledge of leasing, drilling and
production of oil and natural gas, Mr. Simmen purchased a drilling rig in the
Fort Worth Basin in 2003 and formed Jackson and Simmen Drilling. His present
company, Wolf Island Oil and Gas, L.P., concentrates in the Fort Worth Basin
seeking production and exploration opportunities.

Director Independence

The Board of Directors has determined Frank Simmen to be an "independent
director" as defined in Rule 4200(a)(15) of the listing standards of the
National Association of Securities Dealers ("the NASD listing standards").

Meetings of the Board of Directors

The Board of Directors held 15 meetings during the fiscal year ended May
31, 2008. During that fiscal year, each director attended in excess of 75% of
both (i) the total number of board meetings held during the period for which he
was a director and (ii) the total number of meetings of each committee of the
board on which the director served during the period for which he was on the
committee.

Committees of the Board of Directors

The Company does not have committees of the Board. Due to the size of the
Company and the resulting efficiency of a Board of Directors that is limited in
size, the Board of Directors has determined that it is not necessary or
appropriate at this time to establish separate committees.

Compliance With Section 16(a) of the Securities Exchange Act of 1934

The Company believes that during the fiscal year ended May 31, 2008 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.

Stockholders Communications With the Board of Directors

Generally, stockholders who have questions or concerns regarding the
Company should contact the Company at 713-877-8847. However, stockholders may
communicate with the Board of Directors by sending a letter to Board of
Directors of Exterra Energy Inc., c/o Corporate Secretary, 1717 St. James Place,
Suite 205, Houston, Texas 77056. Any communications must contain a clear

notation indicating that it is a "Stockholder-Board Communication" or a
"Stockholder-Director Communication" and must identify the author as a
stockholder. The office of the Corporate Secretary will receive the
correspondence and forward appropriate correspondence to the Chairman of the
Board or to any individual director or directors to whom the communication is
directed. The Company reserves the right not to forward to the Board of
Directors any communication that is hostile, threatening, illegal, does not
reasonably relate to the Company or its business, or is similarly inappropriate.
The office of the Corporate Secretary has authority to discard or disregard any
inappropriate communication or to take any other action that it deems to be
appropriate with respect to any inappropriate communications.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
---------------------------------------------
A VOTE IN FAVOR OF EACH NOMINEE
-------------------------------

COMPENSATION DISCUSSION AND ANALYSIS

See Item 11 in the accompanying 10-K Annual Report.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Item 13 in the accompanying 10-K Annual Report.

PROPOSAL 2.
APPROVAL OF THE EXTERRA ENERGY STOCK OPTION PLAN

The Company's Board of Directors adopted a combined incentive stock option
and non-statutory stock option plan (the "Plan") on October 27, 2008 that
provides for the grant to employees, officers, directors, and consultants of the
Company of options to purchase up to 3,000,000 shares of common stock. Options
under the Plan may be either "incentive stock options" within the meaning of
Section 422 of the United States Internal Revenue Code of 1986, as amended (the
"Code"), or options that do not qualify as incentive stock options
("non-statutory") issued to non-employee directors, employees and consultants of
the Company. The Plan is subject to Shareholder ratification. A copy of the Plan
is attached hereto as Exhibit A.

Purpose of the Plan

The purpose of the Plan is to further the interests of the Company by
providing incentives for officers and other key employees of the Company as well
as consultants and directors of the Company who may be designated for
participation in the Plan and to provide additional means of attracting and
retaining competent personnel in responsible positions.

Description of the Plan

Under the Plan, the Board of Directors ("Board") may from time to time
grant options to participants entitling the holders thereof to purchase shares
of the Company's authorized and unissued common stock up to an aggregate of
3,000,000 shares. Of this aggregate total, 2,250,000 shares shall be designated
for offers of Incentive Stock Options to Employees and 750,000 for Non-Statutory
Options for Consultants, Directors, and Employees of the Company. If any option
granted under the Plan terminates or expires unexercised, the shares released
from option may be made the subject of additional options granted under the Plan
of the same type as the terminated or expired option. If there is any change in
the Company's shares of common stock, as by stock splits, reverse stock splits,
stock dividends or recapitalization, the number of shares available for option
and the shares subject to option shall be appropriately adjusted by the Board.

The Board determines those individuals who shall receive options, the time
period during which the options may be partially or fully exercised, the number
of shares of common stock that may be purchased under each option and the option
price.

The per share exercise price of the common stock subject to incentive and
non-qualified stock options granted pursuant to the Plan may not be less than
the fair market value of the common stock on the date the option is granted.
Under the Plan, the aggregate fair market value (determined as of the date the
option is granted) of the common stock that first became exercisable by any
employee in any one calendar year pursuant to the exercise of incentive stock
options may not exceed $100,000. No person who owns, directly or indirectly, at
the time of the granting of an incentive stock option to him, 10% or more of the
total combined voting power of all classes of stock of the Company (a "10%
Stockholder"), shall be eligible to receive any incentive stock options under
the Plan unless the option price is at least 110% of the fair market value of
the common stock subject to the option, determined on the date of grant.
Non-qualified options are not subject to this limitation.

No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by the optionee. Pursuant to the
terms of the Plan, in the event of termination of employment, other than by
death or permanent total disability, the options terminate immediately. The Plan
provides that upon termination of employment of an optionee by reason of death
or permanent, total disability, an option remains exercisable for one year
thereafter to the extent it was exercisable on the date of such termination.

Options under the Plan must be granted within 10 years from the effective
date thereof. Incentive stock options granted under the Plan cannot be exercised
more than 10 years from the date of grant, except that incentive stock options
issued to a 10% Stockholder are limited to five year terms. Any unexercised
options under the Plan that expire or that terminate upon an employee's ceasing
to be employed with the Company become available once again for issuance.

All options granted under the Plan provide for the payment of the exercise
price in cash equal to the exercise price of the
options being exercised.

Grants Under the Plan

As of November 10, 2008 there have not been any options granted under the
Plan.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE FOR
----------------------------------------------------------
APPROVAL OF THE OPTION PLAN
---------------------------

PROPOSAL 3.
APPROVAL OF THE AMENDMENT TO ARTICLES OF INCORPORATION
OF THE COMPANY

The Company is seeking approval of the Amendment to the Articles of
Incorporation of the Company which will increase the aggregate number of shares
which the Corporation shall have authority to issue from 75,000,000 to
76,000,000 shares, of which 75,000,000 shares are to be common stock, with par
value of $0.001, and 1,000,000 shares are to be preferred stock, with par value
of $0.001. A copy of the Amendment to the Articles of Incorporation is attached
hereto as Exhibit B. The amendment also gives the Board of Directors the
authority to set rights and preferences for shares (both common and preferred).

Introduction

Our Articles of Incorporation currently authorize the issuance of
75,000,000 shares of common stock, par value of $0.001. There is no preferred
stock currently authorized.

Description of the Amendment

On June 19, 2008, our Board of Directors unanimously approved an amendment
to the Articles of Incorporation (the "Amendment"), subject to stockholder
approval, to increase the number of shares authorized for issuance under the
Articles of Incorporation to 76,000,000 shares, of which 75,000,000 shares are
to be common stock, with a par value of $0.001, and 1,000,000 shares are to be
preferred stock, with a par value of $0.001 and to add 1,000,000 shares of
preferred stock, with a par value of $0.001. The Amendment further provides that
the Board of Directors of the Company is authorized to issue stock in the
Company in one or more classes or one or more series of stock within any class
with such rights and preferences as may be set by the Board of Directors by
resolution.

If the Amendment is approved by a majority of stockholders, it will become
effective upon its filing with the Secretary of State of the State of Nevada.
The Company expects to file the Amendment with the Secretary of State of the
State of Nevada very shortly after its approval by stockholders. The authorized
but unissued shares would be available for issuance from time to time for such
purposes and for such consideration as the Board of Directors may determine to

be appropriate without further action by the stockholders, except for those
instances in which applicable law or stock exchange rules require stockholder
approval.

Purposes of the Amendment

The primary purpose of the Amendment is to provide additional shares of
preferred stock which may be used by us for any number of reasons including, but
not limited to, the issuance in connection with future financing activities of
the Company; to issue shares upon conversion of other equity or debt securities;
for issuance in connection with future corporate acquisitions; or other
corporate purposes. The Company currently has no plans to issue any of the newly
authorized shares under the Amendment to the Articles.

Other Potential Effects of the Amendment

Upon filing the Amendment, the Board of Directors may cause the issuance of
additional shares of common or preferred stock and set their rights and
preferences without further vote of our stockholders, except as provided under
Nevada law (or any national securities exchange on which shares of our common
stock are then listed or traded). Under our Articles of Incorporation, our
stockholders do not have preemptive rights to subscribe to additional securities
which may be issued by the Company, which means that current stockholders do not
have a prior right to purchase any new issue of our capital stock in order to
maintain their proportionate ownership of common stock. In addition, if the
Board of Directors elects to issue additional shares of stock, such issuance
could have a dilutive effect on the earnings per share, voting power and
holdings of current stockholders.

In addition to the corporate purposes discussed above, the Amendment could,
under certain circumstances, have an anti-takeover effect, although this is not
the intent of the Board of Directors. For example, the existence of authorized
but unissued shares of common or preferred stock could render more difficult or
discourage an attempt to obtain control of us by means of a proxy contest,
tender offer, merger or otherwise.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR
-------------------------------------------------------------
OF THE AMENDMENT TO THE ARTICLES OF INCORPORATION
-------------------------------------------------

PROPOSAL 4.
RATIFICATION OF THE STAR OF TEXAS ASSET ACQUISITION

Although not required under Nevada law or the governance instruments of the
Company, the Board of Directors is asking the stockholders to ratify the
acquisition of certain Star of Texas and related party assets which occurred in
late 2007.

On September 19, 2007, the Board approved the Company entering into an
agreement for the acquisition of certain of the assets of Star of Texas Energy
Services, Inc., Star of Texas Minerals Resources LLC, Hydro-FX, Inc. and Barnett
Holding, LLC (the "Star of Texas Companies") located in Lago Vista, Texas. Mr.
Ray Ledesma was a principal owner of the selling companies and is a shareholder

and director of the Company. The assets consist of oil and gas working interests
and overriding royalty interests in over 80 wells primarily in North Central
Texas (Denton, Wise, Hood, Parker, Jack, Hill and Tarrant Counties) and
producing out of the Barnett Shale. The assets also include interests in
gathering systems, undeveloped leases, vehicles and office furniture. The
purchase price for the assets was $6,000,000.00 payable in shares of restricted
common stock of the Company valued at $0.75 per share for a total of 8,000,000
shares.

On October 17, 2007, the Company completed the acquisition of the assets of
the Star of Texas Companies with certain of those assets being held in escrow
pending payment of debts and trade obligations owing against such assets.
Further information concerning the Star of Texas acquisition can be found in our
Company's Annual Report accompanying this Proxy Statement

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE FOR
----------------------------------------------------------
RATIFICATION OF THE STAR OF TEXAS ASSET ACQUISITION
---------------------------------------------------

PROPOSAL 5.
RATIFICATION OF THE ISSUANCE OF SHARES OF STOCK FOR DEBT

Although not required under Nevada law or the governance instruments of the
Company, the Board of Directors is asking the stockholders to ratify the
issuance of shares of common stock for the settlement of debts and obligations
resulting from the Star of Texas asset acquisition.

On October 2, 2008 the Company sent an offer out to creditors of the Star
of Texas Companies (some of whom are asserting claims against the Company as
well) offering to settle the obligations owed to them by the Star of Texas
Companies which obligations were incurred in developing assets purchased by the
Company in the described above under Proposal 4. Most of those obligations were
incurred by the Star of Texas Companies for assets which have been held in
escrow since the acquisition. The total amount of the Star of Texas Companies
liabilities currently exceeds $13.7 million.

The terms of the offer made by the Company to the Star of Texas Companies
vendors was to pay $3 million in cash and issue 11,328,000 share of the
Company's common stock to settle all the obligation and claims by those vendors.
The offer is subject to all the vendors accepting a settlement and it is
currently outstanding.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE FOR
----------------------------------------------------------
RATIFICATION OF THE ISSUANCE OF SHARES OF COMMON STOCK FOR THE
--------------------------------------------------------------
SETTLEMENT OF DEBTS AND OBLIGATIONS RESULTING FROM THE STAR OF
--------------------------------------------------------------
TEXAS ASSET ACQUISITION
-----------------------

PROPOSAL 6.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Subject to approval by the stockholders, the Board of Directors has
appointed Malone & Bailey, PC as the independent auditors to audit the financial
statements of the Company for the fiscal year ending May 31, 2009. Malone &
Bailey, PC also served as the Company's auditors for the fiscal year ended May
31, 2008. It is expected that a representative of Malone & Bailey, PC will be
present at the Annual Meeting with the opportunity to make a statement if he
desires to do so and to be available to respond to appropriate questions from
stockholders.

In the event that the stockholders fail to ratify this appointment, other
certified public accountants will be considered by the Board of Directors. Even
if this appointment is ratified, our Board of Directors, in its discretion, may
direct the appointment of a new independent accounting firm at any time during
the year, if the Board believes that such a change would be in the best interest
of the Company and its stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE FOR
----------------------------------------------------------
RATIFICATION OF THE APPOINTMENT OF MALONE & BAILEY, PC AS
---------------------------------------------------------
INDEPENDENT AUDITORS
--------------------

VOTE REQUIRED

Election of Directors. Directors will be elected at the meeting by a
plurality of the votes cast (i.e., the five nominees receiving the greatest
number of votes will be elected as Directors).

Approval of Stock Option Plan. Approval of the Exterra Energy Inc. Stock
Option Plan together with the reservation of 3,000,000 shares of common stock
for issuance thereunder requires the affirmative vote of a majority of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the matter. Abstentions will have the same effect as a vote against such
ratification, whereas broker non-votes and shares not represented at the meeting
will not be counted for purposes of determining whether such ratification has
been approved.

Approval of amendment to the Articles of Incorporation to Add 1,000,000
shares of Preferred Stock. Approval of the amendment to add 1,000,000 shares of
preferred stock requires the affirmative vote of a majority of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the matter. Abstentions will have the same effect as a vote against such
ratification, whereas broker non-votes and shares not represented at the meeting
will not be counted for purposes of determining whether such ratification has
been approved.

Ratification of the both the Star of Texas Asset Acquisition and Stock for
Debt Settlement. Although not required by Nevada law of the Company's governance
documents, the Board of Directors is seeking ratification of the Star of Texas
asset acquisition and the stock for debt settlement offer involving some of the
Star of Texas assets. The Board of Directors is requesting an affirmative vote
of a majority of the shares present in person or represented by proxy at the
meeting and entitled to vote on the matter. Abstentions will have the same

effect as a vote against such ratification, whereas broker non-votes and shares
not represented at the meeting will not be counted for purposes of determining
whether such ratification has been approved.

Ratification of the Appointment of Independent Auditors. The appointment of
Malone & Bailey, PC as independent auditors requires the affirmative vote of a
majority of the shares present in person or represented by proxy at the meeting
and entitled to vote on the matter. Abstentions will have the same effect as a
vote against such ratification, whereas broker non-votes and shares not
represented at the meeting will not be counted for purposes of determining
whether such ratification has been approved.

EXPENSE OF SOLICITATION

The cost of soliciting proxies, which also includes the preparation,
printing and mailing of the Proxy Statement, will be borne by the Company.
Solicitation will be made by the Company primarily through the mail, but regular
employees of the Company may solicit proxies personally, by telephone or
telegram. The Company will request brokers and nominees to obtain voting
instructions of beneficial owners of the stock registered in their names and
will reimburse them for any expenses incurred in connection therewith.

PROPOSALS OF STOCKHOLDERS

Stockholders of the Company who intend to present a proposal for action at
the next Annual Meeting of Stockholders of the Company must notify the Company's
management of such intention by notice in writing received at the Company's
principal executive offices on or before May 31, 2009 in order for such proposal
to be included in the Company's Proxy Statement and form of proxy relating to
such Meeting. Stockholders who wish to present a proposal for action at the next
Annual Meeting are advised to contact the Company as soon as possible in order
to permit the inclusion of any proposal in the Company's proxy statement.

ANNUAL REPORT

A copy of our Annual Report on Form 10-K for the Fiscal Year ended May 31,
2008, has been mailed concurrently with this Proxy statement to all stockholders
entitled to notice of and to vote at the Annual Meeting.

OTHER MATTERS

The Company knows of no items of business that are expected to be presented
for consideration at the Annual Meeting which are not enumerated herein.
However, if other matters properly come before the Meeting, it is intended that
the person named in the accompanying Proxy will vote thereon in accordance with
his best judgement.

PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN
THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE
THE EXPENSE OF FURTHER MAILINGS.

Houston, Texas By Order of the Board of Directors
November 10, 2008

James D. Romano, Secretary

FORM OF PROXY

EXTERRA ENERGY INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned Stockholder of Common Stock of Exterra Energy Inc. (the
"Company") hereby revokes all previous proxies, acknowledges receipt of the
Notice of the Meeting of Stockholders to be held on Thursday, December 11, 2008
and hereby appoints James D. Romano, as proxies of the undersigned, with full
power of substitution, to vote and otherwise represent all of the shares of the
undersigned in the Company at said meeting and at any adjournments thereof with
the same effect as if the undersigned were present and voting the shares. The
shares represented by this proxy shall be voted on the following matters and, in
their discretion, upon any other business which may properly come before said
meeting.

1. Election of Directors:

[ ] For all nominees listed below [ ] Withhold authority
(except as indicated) to vote for all
nominees listed below

To withhold authority for any individual nominee, strike through that
nominee's name in the list below.

John Punzo Ray Ledesma James D. Romano
Randall K. Boatright Frank Simmen

2. To approve the Exterra Energy Inc. Stock Option Plan.