UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
January 30, 2009
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Exterra Energy Inc.
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(Exact name of Registrant as specified in its Charter)
Nevada 000-52319 20-5086877
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1717 St. James Place, Suite 205, Houston, Texas 77056
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(Address of principal executive offices) (Zip Code)
(713) 877-8847
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Item 4.02(b) Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review.
On January 14, 2009, Exterra Energy Inc. (the "Company") filed a Form 8K (the
initial filing) disclosing the financial statements included in our Form 10-K
for the year ended May 31, 2008 and the financial statements included in our
Form 10-Q for the three months ended August 31, 2008 should no longer be relied
upon. On January 22, 2009, the Company received a comment letter from the
Securities and Exchange Commission regarding the initial filing. In response to
such comment letter, the Company hereby amends the initial filing by making the
following additional disclosures:
(1) On January 9, 2009, based on discussions between authorized officers of the
Company and the Company's outside independent accountants it was determined by
the outside independent accountants that a restatement of prior financial
statements was necessary as related to the October 2007 acquisition of assets
from Star of Texas Energy Services Inc. Included in this transaction were
certain wells held in escrow due to outstanding liens. In its 10-K for the year
ended May 31, 2008, Exterra included these wells as assets and also recorded an
estimated settlement liability as part of the purchase price. In addition,
subsequent to the acquisition, Exterra recorded revenues, lease operating
expenses, and depletion expense on the wells above. In January of 2009, it was
determined that Exterra had not acquired the legal rights to the escrowed wells
nor had Exterra legally assumed the lien obligations. It was also determined
that due to the dramatic decline in oil and gas prices and the turmoil in the
financial markets, Exterra would not be able to complete the acquisition of
these wells. Therefore, it was determined the purchase accounting in the
original transaction was incorrect. This determination resulted in the
restatement of the Company's financial statements for the year ended May 31,
2008 and for the three months ended August 31, 2008.
(2) For the year ended May 31, 2008, assets were overstated by approximately
$11,700,000, liabilities were overstated by approximately $6,100,000 and net
loss was understated by approximately $5,600,000.
(3) For the three months ended August 31, 2008, assets were overstated by
approximately $11,700,000, liabilities were overstated by approximately
$5,800,000 and net loss was understated by approximately $200,000.
(4) By no later than February 17, 2009, the Company expects to file amendments
to the Company's Form 10-K for the year ended May 31, 2008 and Form 10-Q for the
three months ended August 31, 2008.
Authorized officers of the Company discussed with those auditors the items being
disclosed in this filing and have provided the auditors with a copy of this
filing in compliance with Item 4.02(c) and requested the auditors to provide the
Company with the letter required under Item 4.02(c)(2). Accompanying this filing
as an exhibit is the auditor's letter.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EXTERRA ENERGY INC.,
/s/ John Punzo
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JOHN PUNZO
Chief Executive Officer
Dated: January 30, 2009
MALONE
& BAILEY pc
Certified Public Accounting Firm
January 29, 2009
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-7561
Dear Sirs/Madams:
We have read item 4.02(b) of Exterra Energy's Form 8-K as filed on
January 30, 2009. We have no basis to disagree with the statements
contained therein.
/s/ Malone & Bailey, PC
Malone & Bailey, PC
www.malone-bailey.com
Houston, Texas