September 22, 2005


Mr. John Herzog
Chief Financial Officer
Arete Industries, Inc.
7102 La Vista Place, Suite 100
Niwot, Colorado  80503


	Re:	Arete Industries, Inc.
		Form 10-KSB for Fiscal Year Ended December 31, 2004
      Filed April 15, 2005
Forms 10-QSB for Fiscal Quarters Ended March 31, 2005
and June 30, 2005
      Filed May 16, 2005 and August 22, 2005
		File No. 033-16820-D


Dear Mr. Herzog:

      We have reviewed your filings and have the following
comments.
We have limited our review of your filings to those issues we have
addressed in our comments. Where indicated, we think you should
revise your documents.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosures in your
filings.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.







Form 10-KSB for the Fiscal Year Ended December 31, 2004

Controls and Procedures, page 12

1. Please provide the controls and procedures disclosure required
under Items 307 and 308 of Regulation S-B, and Item 8A. of Form
10-
KSB.  Please provide similar disclosure in your Forms 10-QSB.

Report of Independent Registered Public Accounting Firm, page F-1

2. Since your current auditor expresses reliance in the opening
paragraph on the work performed by your prior auditor in
connection
with the audit of your financial statements for the period from
inception of the development stage (August 1, 2003) through
December
31, 2004, it would be appropriate for your current auditor to
revise
the opinion paragraph of his audit report to comply with the
guidance
in AU 508.12 and 13.

Consolidated Statement of Cash Flows, page F-7

3. We note your disclosure on page F-15 indicating that $232,250
in
accrued wages payable to your CEO was satisfied by the issuance of
common shares.  However, it appears that you report this item in
the
line item "payment of accrued wages" as a financing cash inflow.
If
this is a non-cash item as you disclose, the presentation would
require revision to comply with the guidance in SFAS 95.
Otherwise,
expand your disclosure to provide further clarification.  Please
make
parallel changes to your Forms 10-QSB.


Closing Comments

       As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the amendment to expedite our review.  Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information.  Detailed cover letters
greatly
facilitate our review.  Please understand that we may have
additional
comments after reviewing your responses to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosures in the filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosures, they are responsible for the accuracy and
adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosures in the filings;

* staff comments or changes to disclosures in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

	You may contact Lily Dang at (202) 551-3867 if you have
questions regarding comments on the financial statements and
related
matters.  Please contact me at (202) 551-3686 with any other
questions.

								Sincerely,



								Karl Hiller
								Branch Chief
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Mr. John Herzog
Arete Industries, Inc.
September 22, 2005
Page 1




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

   DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010