EXHIBIT 5
                               OPINION OF COUNSEL

                              GREGORY Z. GERGANOFF
                                 Attorney at Law
                               10352 Owens Circle
                           Westminster, Colorado 80302

April 17, 2001

Arete Industries, Inc.
2955 Valmont Road
Suite 310
Boulder, Colorado 80301

     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 Seventy Million  (70,000,000)
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 April 22, 1999.

     (2)  By-laws  of the  Company  and  Resolutions  of the Board of  Directors
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 photo static 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:  /s/ Gregory Z. Gerganoff
          -------------------------------------
          Gregory Z. Gerganoff, Attorney at Law