UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

              [X] Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                     For the Fiscal Year Ended May 31, 2007

             [ ] Transition Report Pursuant to Section 13or 15(d) of
                       The Securities Exchange Act of 1934

                       Commission File Number: 333-135884

                               EXTERRA ENERGY INC.
                               -------------------
                 (Name of small business issuer in its charter)

                Nevada                                   20-5086877
                ------                                   ----------
     (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                  Identification No.)

                  115 West 7th Street, Fort Worth, Texas 76102
                  --------------------------------------------
               (Address of principal executive offices) (Zip Code)

                     Issuer's telephone no.: (817) 980-8079

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

State the issuer's revenues for its most recent fiscal year. $50,578

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and ask prices of such stock as of a specified date within 60 days.
$6,634,800.00 (Based on the price per share on August 21, 2007 of $0.95)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

                  Class                        Outstanding as of May 31, 2007
                  -----                        ------------------------------

  Common Stock, Par Value $0.001 per share               11,494,000


                       DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Part III,
Item 13.
Transitional Small Business Disclosure Format. Yes [ ] No [X]

<PAGE>

                             GREEN GOLD INCORPORATED

                                TABLE OF CONTENTS

                                     PART I
                                     ------
                                                                            PAGE

Item 1.    Description of Business                                             4
Item 1A.   Risk Factors                                                        6
Item 2.    Description of Property                                            11
Item 3.    Legal Proceedings                                                  13
Item 4.    Submission of Matter to a Vote of Security Holders                 13

                                    PART II
                                    -------

Item 5.    Market for Common Equity and Related Stockholder Matters           13
Item 6.    Management's Discussion and Analysis or Plan of Operation          13
Item 7.    Financial Statements                                               15
Item 8.    Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure                                           28
Item 8A.   Controls and Procedures                                            28
Item 8B.   Other Information                                                  28

                                   PART III
                                   --------

Item 9.    Directors, Executive Officers, Promoters and Control persons;
               Compliance with Section 16(a) of the Exchange Act              29
Item 10.   Executive Compensation                                             30
Item 11.   Security Ownership of Certain Beneficial Owners and Management     31
Item 12.   Certain Relationships and Related Transactions                     31
Item 13.   Exhibits                                                           31
Item 14.   Principal Accountant Fees and Services                             32
Signatures                                                                    32

                              Cautionary Statement
                              --------------------

This report on Form 10-KSB and the documents or information incorporated by
reference herein contain forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements include, among others,
the following:

     o    our growth strategies;
     o    anticipated trends in our business;
     o    our ability to make or integrate acquisitions;
     o    our liquidity and ability to finance our exploration, acquisition and
          development strategies;
     o    market conditions in the oil and gas industry;
     o    the timing, cost and procedure for proposed acquisitions;
     o    the impact of government regulation;
     o    estimates regarding future net revenues from oil and natural gas
          reserves and the present value thereof;
     o    planned capital expenditures (including the amount and nature
          thereof);
     o    increases in oil and gas production;
     o    estimates, plans and projections relating to acquired properties;
     o    the number of potential drilling locations; and
     o    our financial position, business strategy and other plans and
          objectives for future operations.

We identify forward-looking statements by use of terms such as "may," "will,"
"expect," "anticipate," "estimate," "hope," "plan," "believe," "predict,"
"envision," "intend," "will," "continue," "potential," "should," "confident,"

                                       2
<PAGE>

"could" and similar words and expressions, although some forward-looking
statements may be expressed differently. You should be aware that our actual
results could differ materially from those contained in the forward-looking
statements. You should consider carefully the statements under the "Risk
Factors" section of this report and other sections of this report which describe
factors that could cause our actual results to differ from those set forth in
the forward-looking statements, and the following factors:

     o    the possibility that our acquisitions may involve unexpected costs;

     o    the volatility in commodity prices for oil and gas;

     o    the accuracy of internally estimated proved reserves;

     o    the presence or recoverability of estimated oil and gas reserves;

     o    the ability to replace oil and gas reserves;

     o    the availability and costs of drilling rigs and other oilfield
          services;

     o    environmental risks;

     o    exploration and development risks;

     o    competition;

     o    the inability to realize expected value from acquisitions;

     o    the ability of our management team to execute its plans to meet its
          goals;

     o    other economic, competitive, governmental, legislative, regulatory,
          geopolitical and technological factors that may negatively impact our
          businesses, operations and pricing.

Forward-looking statements speak only as of the date of this report or the date
of any document incorporated by reference in this report. Except to the extent
required by applicable law or regulation, we do not undertake any obligation to
update forward-looking statements to reflect events or circumstances after the
date of this report or to reflect the occurrence of unanticipated events.







                                        3
<PAGE>

                                     PART I
                                     ------

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------

General

Exterra Energy Inc. was incorporated under the State of Nevada on February 3rd,
2006 as Green Gold Inc. On July 17th, 2007, Green Gold Inc. changed its name to
Exterra Energy Inc. As described in its original prospectus filed with the
Securities and Exchange Commission, the Company acquired the Green Gold Jade
property located in British Columbia, Canada in February 2006 for $10,000.00.
Subsequently, the Company acquired interests in four oil and gas leases located
in Texas, USA in December 2006 for $600,000.

The Company through its consolidated operations, is an independent oil and gas
company focused on building and revitalizing a diversified portfolio of oil and
gas production assets located in the State of Texas. We seek to acquire
underperforming oil and gas assets that we believe we can revitalize in a short
period of time.

Acquisitions are a core part of our growth strategy. The majority of the
acquisition proposals and candidates that we review are sourced directly by our
senior management or specialized third-party consultants with local area
knowledge. We focus on well acquisitions in which we estimate have a good
opportunity and the appropriate acreage to drill additional proven undeveloped
targets.

We use a diverse range of financing arrangements in our acquisitions. We employ
a wide variety of financing structures to acquire assets, including payment of
cash and/or stock consideration, seller financing, and royalty fee arrangements.

Business Strategy

The Company strives to increase reserves, production and cash flow from
operations through a strategy of (i) focusing on development and exploitation
activities to maximize production and ultimate reserve recovery, (ii) acquiring
oil and natural gas properties with significant exploitation, development or
exploration potential, (iii) obtaining operational control of its properties,
(iv) maintaining a low operating cost structure, and (v) selectively exploring
and developing properties with significant reserve potential.

Property Acquisitions. The Company expects to generate future growth in reserves
and production both through development and exploratory drilling and seeking to
opportunistically acquire properties that complement and enhance its inventory
of development, exploitation and exploration projects. The Company expects to
focus on purchases of underdeveloped properties in its core areas of expertise
either through negotiated property acquisitions or acquisitions of companies
with oil and natural gas properties.

 Operational Control. The Company prefers to operate and, except for its
exploratory prospects, to own a majority working interest in its oil and natural
gas properties. This operating philosophy will enable the Company to control the
nature, timing and costs of exploration and development of its properties, as
well as the marketing of the resulting production.

Low Operating Cost Structure. The Company seeks to increase cash flow by
maintaining a low unit operating cost structure through its focus on increasing
production while limiting its field operating and corporate overhead expenses.

History
-------

The Company was organized under the laws of the State of Nevada on Feb 03, 2006,
to explore mining claims and property in North America. As described in its
original prospectus filed with the Securities and Exchange Commission, the
Company acquired the Green Gold Jade property located in British Columbia,
Canada in February 2006 for $10,000.00. This property is located approximately
25 km from Lytton BC. The Green Gold Jade property comprises 227.729 hectares of
mineral title contained in 11 cell units on two mineral claims.

The Company's business direction was changed in 2006 in order to capitalize on
the increasing availability of opportunistic acquisitions in the energy sector.
We believe that the continuing divestiture of mature assets held by large
companies has created an opportunity to acquire undervalued properties with
significant upside potential.

                                       4
<PAGE>

Our main source of revenue comes from the sale of the crude oil that we extract
from our wells. We anticpate that we will derive some ancillary revenue from
natural gas sales related to some of our oil wells that are planned to come on
line later in 2007. The main costs associated with our business are related to
oil and gas property acquisition, initial well revitalization and ongoing lease
operating expenses. The revitalization of wells allows short term cash increases
while holding the lease for additional future development.

Our principal office is located at 115 West 7th Street, Suite 1415, Fort Worth,
Texas 76102. Our phone number is (817) 980-8079 and fax number is (817)
887-4040. The Company has been granted a Certificate of Authority to transact
business in the state of Texas.

Recent Events
-------------

In December 2006, the Company acquired interests in four oil and gas leases
located in Texas, USA for $600,000. The purchase price was paid in cash of
$300,000 and a note payable of $300,000. Principal and interest on the note is
payable on the tenth (10th) day of each calendar month, beginning on January 10,
2007, in monthly installments equal to the difference between the prior month's
(i) income and (ii) the royalties, severance, ad valorem, lifting and
transportation expenses directly related to the operation of the Leases. Each
monthly installment will be applied first to any outstanding and accrued
interest and, thereafter, to principal on the note. The entire principal amount
outstanding under the note and all accrued interest thereon is due and payable
on November 1, 2007. The note payable is secured by the oil and gas properties.
The Company has accrued $15,000 in interest on the note payable as of May 31,
2007.

Description of Properties

Pecos County, Texas. In December 2006, we purchased a 75% working interest in
producing oil and gas leases in the West Texas Permian Basin. The leases include
15 ten-acre tracts in the West Cardinal field located in Pecos County
approximately 150 miles south of Midland, Texas. As part of the acquisition, we
acquired a 12-mile long pipeline with the 15 wells on the property. We have
recently received permission to drill a 1,700' salt water disposal well, which
we are in the process of drilling. Once the salt water disposal well is
completed and the pipeline is repaired we plan to put several of the existing
wells back on line.

Archer County and Wichita County, Texas. In December 2006, we purchased a 100%
working interest (an 81.25% net revenue interest) in three producing North Texas
oil and gas leases. Collectively, the leases cover approximately 240 acres about
120 miles northwest of Fort Worth and 30 miles southwest of Wichita Falls. We
have recently enhanced production by secondary recovery operations. Located on
the leases are two deep inactive wells (each greater than 4,000 feet), three
shallow injection wells (each less than 2,000 feet), 21 shallow inactive wells
and 16 shallow producing wells. We plan to re-activate the non-producing wells
to optimize production from the leases and implement additional secondary
recovery.

McMullen County, Texas. In December of 2006, we acquired a 9% working interest
in the Henry Dome gas project located in McMullen County approximately 60 miles
south of San Antonio, Texas. We are unsure if this holding is viable.

Marketing of Crude Oil and Natural Gas
--------------------------------------

We plan to operate exclusively in the oil and gas industry going forward. Crude
oil and natural gas production from wells owned by us is generally sold direct
to oil purchasers and natural gas marketing companies. Sales are generally made
on the spot market. These prices often are tied to WTI crude and natural gas
futures contracts as posted in national publications. We have not entered into
any agreements to hedge or sell forward any of our oil and gas production.

We sell our oil production to third party purchasers under agreements at posted
field prices. These third parties purchase the oil at the wellhead.

Although management believes that we are not dependent upon any one customer,
our current marketing arrangement relies on one purchaser for 100% of our
revenue for the year ended May 31, 2007. In the event that our current purchaser
is unwilling or unable to purchase the production, management believes
alternative purchasers of its production are readily available.

                                       5
<PAGE>

Employees
---------

As of the end of our fiscal year on May 31, 2007, we employed three full-time
management consultants, consisting of two management executives, and one
operational person. We also utilize certain outsourced third party consultants
to provide operational, technical and certain administrative services. As
production levels increase, we may find the need to hire additional personnel.

None of our employees is a member of any union, nor have they entered into any
collective bargaining agreements. We believe that our relationship with these
individuals is good. With the successful implementation of our business plan, we
may seek additional employees in the next year to handle anticipated potential
growth.

Facilities
----------

We currently occupy approximately 1,000 square feet of office space located at
Suite 1415, 115 West 7th Street, in Fort Worth, Texas for $972.00 per month.

Industry Segments
-----------------

We are presently engaged in one industry segment, which is the exploration and
production of natural gas and oil.

ITEM 1A. RISK FACTORS
---------------------

An investment in our common stock involves a number of risks. These risks
include those described in this confidential private placement memorandum and
others we have not anticipated or discussed. Before you purchase the Securities
you should carefully consider the information about risks identified below, as
well as the information about risks stated in other parts of this memorandum and
in our filings with the Commission that we have incorporated by reference in
this memorandum. Any of the risks discussed below or elsewhere in this
memorandum or in our Commission filings, and other risks we have not anticipated
or discussed, could have a material impact on our business, results of
operations, and financial condition. As a result, they could have an impact on
our ability to pay any amounts due with respect to the Securities, or our stock
price.

Risks Relating to Our Business

We have a limited operating history, and we may not be able to operate
profitably in the near future, if at all.

We have a limited operating history. Businesses which are starting up or in
their initial stages of development present substantial business and financial
risks and may suffer significant losses from which they cannot recover. We will
face all of the challenges of a new business enterprise, including but not
limited to, locating suitable office space, engaging the services of qualified
support personnel and consultants, establishing budgets and implementing
appropriate financial controls and internal operating policies and procedures.
We will need to attract and retain a number of key employees and other service
personnel.

We have limited operating capital.

We have sufficient capital for current operations through our cash position and
current cash flow. However to continue growth and to fund our expansion plans we
will require additional financing. The amount of capital available to us is
limited, and may not be sufficient to enable us to fully execute our growth
plans without additional fund raising. Additional financing may be required to
meet our objectives and provide more working capital for expanding our
development and marketing capabilities and to achieve our ultimate plan of
expansion and full scale of operations. There can be no assurance that we will
be able to obtain such financing on attractive terms, if at all. We have no firm
commitments for additional cash funding beyond the proceeds of the recently
completed financings.

We do not intend to pay dividends to our shareholders.

We do not currently intend to pay cash dividends on our common stock and do not
anticipate paying any dividends at any time in the foreseeable future. At
present, we will follow a policy of retaining all of our earnings, if any, to
finance development and expansion of our business.

Our officers and directors have limited liability, and we are required in
certain instances to indemnify our officers and directors for breaches of their
fiduciary duties.

                                       6
<PAGE>

We have adopted provisions in our Articles of Incorporation and Bylaws which
limit the liability of our officers and directors and provide for
indemnification by us of our officers and directors to the full extent permitted
by Nevada corporate law. Our articles generally provide that our officers and
directors shall have no personal liability to us or our shareholders for
monetary damages for breaches of their fiduciary duties as directors, except for
breaches of their duties of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, acts involving
unlawful payment of dividends or unlawful stock purchases or redemptions, or any
transaction from which a director derives an improper personal benefit. Such
provisions substantially limit our shareholders' ability to hold officers and
directors liable for breaches of fiduciary duty, and may require us to indemnify
our officers and directors.

We depend significantly upon the continued involvement of our present
management.

Our success depends to a significant degree upon the involvement of our
management, who are in charge of our strategic planning and operations. We may
need to attract and retain additional talented individuals in order to carry out
our business objectives. The competition for such persons could be intense and
there are no assurances that these individuals will be available to us.

Our business is subject to extensive regulation.

As many of our activities are subject to federal, state and local regulation,
and as these rules are subject to constant change or amendment, there can be no
assurance that our operations will not be adversely affected by new or different
government regulations, laws or court decisions applicable to our operations.

Government regulation and liability for environmental matters may adversely
affect our business and results of operations.

Crude oil and natural gas operations are subject to extensive federal, state and
local government regulations, which may be changed from time to time. Matters
subject to regulation include discharge permits for drilling operations,
drilling bonds, reports concerning operations, the spacing of wells, unitization
and pooling of properties and taxation. From time to time, regulatory agencies
have imposed price controls and limitations on production by restricting the
rate of flow of crude oil and natural gas wells below actual production capacity
in order to conserve supplies of crude oil and natural gas. There are federal,
state and local laws and regulations primarily relating to protection of human
health and the environment applicable to the development, production, handling,
storage, transportation and disposal of crude oil and natural gas, byproducts
thereof and other substances and materials produced or used in connection with
crude oil and natural gas operations. In addition, we may inherit liability for
environmental damages caused by previous owners of property we purchase or
lease. As a result, we may incur substantial liabilities to third parties or
governmental entities. We are also subject to changing and extensive tax laws,
the effects of which cannot be predicted. The implementation of new, or the
modification of existing, laws or regulations could have a material adverse
effect on us.

The crude oil and natural gas reserves we will report in our SEC filings will be
estimates and may prove to be inaccurate.

There are numerous uncertainties inherent in estimating crude oil and natural
gas reserves and their estimated values. The reserves we will report in our
filings with the SEC will only be estimates and such estimates may prove to be
inaccurate because of these uncertainties. Reservoir engineering is a subjective
and inexact process of estimating underground accumulations of crude oil and
natural gas that cannot be measured in an exact manner. Estimates of
economically recoverable crude oil and natural gas reserves depend upon a number
of variable factors, such as historical production from the area compared with
production from other producing areas and assumptions concerning effects of
regulations by governmental agencies, future crude oil and natural gas prices,
future operating costs, severance and excise taxes, development costs and
work-over and remedial costs. Some or all of these assumptions may in fact vary
considerably from actual results. For these reasons, estimates of the
economically recoverable quantities of crude oil and natural gas attributable to
any particular group of properties, classifications of such reserves based on
risk of recovery, and estimates of the future net cash flows expected therefrom
prepared by different engineers or by the same engineers but at different times
may vary substantially. Accordingly, reserve estimates may be subject to
downward or upward adjustment. Actual production, revenue and expenditures with
respect to our reserves will likely vary from estimates, and such variances may
be material.

Crude oil and natural gas development, re-completion of wells from one reservoir
to another reservoir, restoring wells to production and drilling and completing
new wells are speculative activities and involve numerous risks and substantial
and uncertain costs.

                                       7
<PAGE>

Our growth will be materially dependent upon the success of our future
development program. Drilling for crude oil and natural gas and reworking
existing wells involves numerous risks, including the risk that no commercially
productive crude oil or natural gas reservoirs will be encountered. The cost of
drilling, completing and operating wells is substantial and uncertain, and
drilling operations may be curtailed, delayed or cancelled as a result of a
variety of factors beyond our control, including:

     o    unexpected drilling conditions;
     o    pressure or irregularities in formations;
     o    equipment failures or accidents;
     o    inability to obtain leases on economic terms, where applicable;
     o    adverse weather conditions;
     o    compliance with governmental requirements; and
     o    shortages or delays in the availability of drilling rigs or crews and
          the delivery of equipment.

Drilling or reworking is a highly speculative activity. Even when fully and
correctly utilized, modern well completion techniques such as hydraulic
fracturing and horizontal drilling do not guarantee that we will find crude oil
and/or natural gas in our wells. Hydraulic fracturing involves pumping a fluid
with or without particulates into a formation at high pressure, thereby creating
fractures in the rock and leaving the particulates in the fractures to ensure
that the fractures remain open, thereby potentially increasing the ability of
the reservoir to produce oil or gas. Horizontal drilling involves drilling
horizontally out from an existing vertical well bore, thereby potentially
increasing the area and reach of the well bore that is in contact with the
reservoir. Our future drilling activities may not be successful and, if
unsuccessful, such failure would have an adverse effect on our future results of
operations and financial condition. We cannot assure you that our overall
drilling success rate or our drilling success rate for activities within a
particular geographic area will not decline. We may identify and develop
prospects through a number of methods, some of which do not include lateral
drilling or hydraulic fracturing, and some of which may be unproven. The
drilling and results for these prospects may be particularly uncertain. Our
drilling schedule may vary from our capital budget. The final determination with
respect to the drilling of any scheduled or budgeted prospects will be dependent
on a number of factors, including, but not limited to:

     o    the results of previous development efforts and the acquisition,
          review and analysis of data;
     o    the availability of sufficient capital resources to us and the other
          participants, if any, for the drilling of the prospects;
     o    the approval of the prospects by other participants, if any, after
          additional data has been compiled;
     o    economic and industry conditions at the time of drilling, including
          prevailing and anticipated prices for crude oil and natural gas and
          the availability of drilling rigs and crews;
     o    our financial resources and results;
     o    the availability of leases and permits on reasonable terms for the
          prospects; and
     o    the success of our drilling technology.

We cannot assure you that these projects can be successfully developed or that
the wells discussed will, if drilled, encounter reservoirs of commercially
productive crude oil or natural gas. There are numerous uncertainties in
estimating quantities of proved reserves, including many factors beyond our
control.

Crude oil and natural gas prices are highly volatile in general and low prices
will negatively affect our financial results.

Our revenues, operating results, profitability, cash flow, future rate of growth
and ability to borrow funds or obtain additional capital, as well as the
carrying value of our properties, are substantially dependent upon prevailing
prices of crude oil and natural gas. Lower crude oil and natural gas prices also
may reduce the amount of crude oil and natural gas that we can produce
economically. Historically, the markets for crude oil and natural gas have been
very volatile, and such markets are likely to continue to be volatile in the
future. Prices for crude oil and natural gas are subject to wide fluctuation in
response to relatively minor changes in the supply of and demand for crude oil
and natural gas, market uncertainty and a variety of additional factors that are
beyond our control, including:

     o    worldwide and domestic supplies of crude oil and natural gas;
     o    the level of consumer product demand;
     o    weather conditions;
     o    domestic and foreign governmental regulations;
     o    the price and availability of alternative fuels;
     o    political instability or armed conflict in oil producing regions;
     o    the price and level of foreign imports; and
     o    overall domestic and global economic conditions.

                                       8
<PAGE>

It is extremely difficult to predict future crude oil and natural gas price
movements with any certainty. Declines in crude oil and natural gas prices may
materially adversely affect our financial condition, liquidity, ability to
finance planned capital expenditures and results of operations. Further, oil and
gas prices do not move in tandem.

Risks Related To Share Ownership

The market price for our common stock may be volatile, and you may not be able
to sell our stock at a favorable price or at all.

     Many factors could cause the market price of our common stock to rise and
     fall, including:

     o    actual or anticipated variations in our quarterly results of
          operations;
     o    changes in market valuations of companies in our industry;
     o    changes in expectations of future financial performance;
     o    fluctuations in stock market prices and volumes;
     o    issuances of common stock or other securities in the future;
     o    the addition or departure of key personnel;
     o    announcements by us or our competitors of acquisitions, investments or
          strategic alliances; and
     o    the increase or decline in the price of oil and natural gas.

It is possible that the proceeds from sales of our common stock may not equal or
exceed the prices you paid for it plus the costs and fees of making the sales.

Substantial sales of our common stock, or the perception that such sales might
occur, could depress the market price of our common stock.

We cannot predict whether future issuances of our common stock or resales in the
open market will decrease the market price of our common stock. The impact of
any such issuances or resales of our common stock on our market price may be
increased as a result of the fact that our common stock is thinly, or
infrequently, traded. The exercise of any options or the vesting of any
restricted stock that we may grant to directors, executive officers and other
employees in the future, the issuance of common stock in connection with
acquisitions and other issuances of our common stock could have an adverse
effect on the market price of our common stock. In addition, future issuances of
our common stock may be dilutive to existing shareholders. Any sales of
substantial amounts of our common stock in the public market, or the perception
that such sales might occur, could lower the market price of our common stock.

Our common stock is considered "penny stock" securities under Exchange Act
rules, which may limit the marketability of our securities.

Our securities are considered low-priced or "designated" securities under rules
promulgated under the Exchange Act. Under these rules, broker/dealers
participating in transactions in low-priced securities must first deliver a risk
disclosure document which describes the risks associated with such stocks, the
broker/dealer's duties, the customer's rights and remedies, certain market and
other information, and make a suitability determination approving the customer
for low-priced stock transactions based on the customer's financial situation,
investment experience and objectives. Broker/dealers must also disclose these
restrictions in writing to the customer and obtain specific written consent of
the customer, and provide monthly account statements to the customer. The likely
effect of these restrictions is a decrease in the willingness of broker/dealers
to make a market in the stock, decreased liquidity of the stock and increased
transaction costs for sales and purchases of the stock as compared to other
securities.

IN ADDITION TO THE RISK FACTORS SET FORTH ABOVE, THE COMPANY IS SUBJECT TO
NUMEROUS OTHER RISKS SPECIFIC TO THE PARTICULAR BUSINESS OF THE COMPANY, AS WELL
AS GENERAL BUSINESS RISK. INVESTORS ARE URGED TO CONSIDER ALL OF THE RISKS
INHERENT IN THE COMPANY'S SECURITIES PRIOR TO PURCHASING OR MAKING AN INVESTMENT
DECISION. THE COMPANY'S SECURITIES ARE HIGHLY SPECULATIVE AND INVOLVE A VERY
HIGH DEGREE OF RISK.

                                       9
<PAGE>

Competition
-----------

We are in direct competition with numerous oil and natural gas companies,
drilling and income programs and partnerships exploring various areas of Texas
and elsewhere competing for properties. Many competitors are large, well-known
oil and gas and/or energy companies, although no single entity dominates the
industry. Many of our competitors possess greater financial and personnel
resources enabling them to identify and acquire more economically desirable
energy producing properties and drilling prospects than us. Additionally, there
is competition from other fuel choices to supply the energy needs of consumers
and industry. Management believes that there exists a viable market place for
smaller producers of natural gas and oil.

Government Regulation
---------------------

In the United States, legislation affecting the oil and gas industry has been
pervasive and is under constant review for amendment or expansion. Pursuant to
such legislation, numerous federal, state and local departments and agencies
have issued extensive rules and regulations binding on the oil and gas industry
and its individual members, some of which carry substantial penalties for
failure to comply. These laws and regulations have a significant impact on oil
and gas drilling, gas processing plants and production activities, increasing
the cost of doing business and, consequently, affect profitability. Inasmuch as
new legislation affecting the oil and gas industry is commonplace and existing
laws and regulations are frequently amended or reinterpreted, we may be unable
to predict the future cost or impact of complying with these laws and
regulations. We consider the cost of environmental protection a necessary and
manageable part of its business. We have been able to plan for and comply with
new environmental initiatives without materially altering its operating
strategies.

Exploration and Production. Our operations are subject to various types of
regulation at the federal, state and local levels. These regulations include
requiring permits for the drilling wells; maintaining prevention plans;
submitting notification and receiving permits related to the presence, use and
release of certain materials incidental to oil and gas operations; and
regulating the location of wells, the method of drilling and casing wells, the
use, transportation, storage and disposal of fluids and materials used in
connection with drilling and production activities, surface plugging and
abandoning of wells and the transporting of production. Our operations are also
subject to various conservation matters, including the number of wells which may
be drilled in a unit, and the unitization or pooling of oil and gas properties.
In this regard, some states allow the forced pooling or integration of tracts to
facilitate exploration while other states rely on voluntary pooling of lands and
leases, which may make it more difficult to develop oil and gas properties. In
addition, state conservation laws establish maximum rates of production oil and
gas wells, generally limit the venting or flaring of gas, and impose certain
requirements regarding the ratable purchase of production. The effect of these
regulations is to limit the amounts of oil and gas we can produce from our wells
and to limit the number of wells or the locations at which we can drill.

Environmental. Our exploration, development, and production of oil and gas,
including our operation of saltwater injection and disposal wells, are subject
to various federal, state and local environmental laws and regulations. Such
laws and regulations can increase the costs of planning, designing, installing
and operating oil and gas wells. Our domestic activities are subject to a
variety of environmental laws and regulations, including but not limited to, the
Oil Pollution Act of 1990 ("OPA"), the Clean Water Act ("CWA"), the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
the Resource Conservation and Recovery Act ("RCRA"), the Clean Air Act ("CAA"),
and the Safe Drinking Water Act ("SDWA"), as well as state regulations
promulgated under comparable state statutes. We are also subject to regulations
governing the handling, transportation, storage, and disposal of naturally
occurring radioactive materials that are found in our oil and gas operations.
Civil and criminal fines and penalties may be imposed for non-compliance with
these environmental laws and regulations. Additionally, these laws and
regulations require the acquisition of permits or other governmental
authorizations before undertaking certain activities, limit or prohibit other
activities because of protected areas or species, and impose substantial
liabilities for cleanup of pollution.

Under the OPA, a release of oil into water or other areas designated by the
statute could result in the company being held responsible for the costs of
remediating such a release, certain OPA specified damages, and natural resource
damages. The extent of that liability could be extensive, as set forth in the
statute, depending on the nature of the release. A release of oil in harmful
quantities or other materials into water or other specified areas could also
result in the company being held responsible under the CWA for the costs of
remediation, and civil and criminal fines and penalties.

CERCLA and comparable state statutes, also known as "Superfund" laws, can impose
joint and several and retroactive liability, without regard to fault or the
legality of the original conduct, on certain classes of persons for the release
of a "hazardous substance" into the environment. In practice, cleanup costs are

                                       10
<PAGE>

usually allocated among various responsible parties. Potentially liable parties
include site owners or operators, past owners or operators under certain
conditions, and entities that arrange for the disposal or treatment of, or
transport hazardous substances found at the site. Although CERCLA, as amended,
currently exempts petroleum, including but not limited to, crude oil, gas and
natural gas liquids from the definition of hazardous substance, our operations
may involve the use or handling of other materials that may be classified as
hazardous substances under CERCLA. Furthermore, there can be no assurance that
the exemption will be preserved in future amendments of the act, if any.

RCRA and comparable state and local requirements impose standards for the
management, including treatment, storage, and disposal of both hazardous and
non-hazardous solid wastes. From time to time, proposals have been made that
would reclassify certain oil and gas wastes, including wastes generated during
drilling, production and pipeline operations, as "hazardous wastes" under RCRA
which would make such solid wastes subject to much more stringent handling,
transportation, storage, disposal, and clean-up requirements. This development
could have a significant impact on our operating costs. While state laws vary on
this issue, state initiatives to further regulate oil and gas wastes could have
a similar impact. Because oil and gas exploration and production, and possibly
other activities, have been conducted at some of our properties by previous
owners and operators, materials from these operations remain on some of the
properties and in some instances require remediation. In addition, in certain
instances we have agreed to indemnify sellers of producing properties from which
we have acquired reserves against certain liabilities for environmental claims
associated with such properties. While we do not believe that costs to be
incurred by us for compliance and remediating previously or currently owned or
operated properties will be material, there can be no guarantee that such costs
will not result in material expenditures.

Additionally, in the course of our routine oil and gas operations, surface
spills and leaks, including casing leaks, of oil or other materials occur, and
we incur costs for waste handling and environmental compliance. Moreover, we are
able to control directly the operations of only those wells for which we act as
the operator. Management believes that the company is in substantial compliance
with applicable environmental laws and regulations.

We do not anticipate being required in the near future to expend amounts that
are material in relation to our total capital expenditures program by reason of
environmental laws and regulations, but inasmuch as such laws and regulations
are frequently changed, we are unable to predict the ultimate cost of
compliance. There can be no assurance that more stringent laws and regulations
protecting the environment will not be adopted or that we will not otherwise
incur material expenses in connection with environmental laws and regulations in
the future.

Occupational Health and Safety. We are also subject to laws and regulations
concerning occupational safety and health. Due to the continued changes in these
laws and regulations, and the judicial construction of many of them, we are
unable to predict with any reasonable degree of certainty its future costs of
complying with these laws and regulations. We consider the cost of safety and
health compliance a necessary and manageable part of our business. We have been
able to plan for and comply with new initiatives without materially altering its
operating strategies.

Taxation
--------

Our operations, as is the case in the petroleum industry generally, are
significantly affected by federal tax laws. Federal, as well as state, tax laws
have many provisions applicable to corporations which could affect the future
tax liability of the Company.

Commitments and Contingencies
-----------------------------

We are liable for future restoration and abandonment costs associated with its
oil and gas properties. These costs include future site restoration, post
closure and other environmental exit costs. The costs of future restoration and
well abandonment have not been determined in detail. State regulations require
operators to post bonds that assure that well sites will be properly plugged and
abandoned. Each state in which we operate requires a security bond varying in
value from state to state and depending on the number of wells that we operate.
Management views this as a necessary requirement for operations within each
state and does not believe that these costs will have a material adverse effect
on its financial position as a result of this requirement.

ITEM 2. DESCRIPTION OF PROPERTIES
---------------------------------

Our properties consist essentially of working and royalty interests owned by us
in various oil and gas wells and leases located in Texas.

                                       11
<PAGE>

Oil and Gas Acreage
-------------------

Pecos County, Texas. In December 2006, we purchased a 75% working interest in
producing oil and gas leases in the West Texas Permian Basin. The leases include
15 ten-acre tracts in the West Cardinal field located in Pecos County
approximately 150 miles south of Midland, Texas. As part of the acquisition, we
acquired a 12-mile long pipeline with the 15 wells on the property. We have
recently received permission to drill a 1,700' salt water disposal well, which
we are in the process of drilling. Once the salt water disposal well is
completed and the pipeline is repaired we plan to put several of the existing
wells back on line.

Archer County and Wichita County, Texas. In December 2006, we purchased a 100%
working interest (an 81.25% net revenue interest) in three producing North Texas
oil and gas leases. Collectively, the leases cover approximately 240 acres about
120 miles northwest of Fort Worth and 30 miles southwest of Wichita Falls. We
have recently enhanced production by secondary recovery operations. Located on
the leases are two deep inactive wells (each greater than 4,000 feet), three
shallow injection wells (each less than 2,000 feet), 21 shallow inactive wells
and 16 shallow producing wells. We plan to re-activate the non-producing wells
to optimize production from the leases and implement additional secondary
recovery.

McMullen County, Texas. In December of 2006, we acquired a 9% working interest
in the Henry Dome gas project located in McMullen County approximately 60 miles
south of San Antonio, Texas. We are unsure if this holding is viable.

Reserves
--------

The Company has not calculated proven or unproven reserves for its oil and gas
properties.

Wells
-----

The following summarizes the Company's productive oil and gas wells as of May
31, 2007. Productive wells are producing wells and wells capable of production.
Gross wells are the total number of wells in which the company has an interest.
Net wells are the sum of the Company's fractional interests owned in the gross
wells.

                              Productive       Gross            Net
                              ----------       -----            ---
     Oil and gas wells,           32             53              41
     Texas
                             -------------    -------      -------------
                                  32             53              41
                             =============    =======      =============


Set forth in the following schedule is the average sales price per unit of oil,
expressed in barrels ("bbl"), and of natural gas, expressed in thousand cubic
feet ("mcf"), produced by us for the past three fiscal years.

                                       Years ended May 31,
                                      ---------------------
                                       2007           2006
                                       ----           ----
Average sales price:
     Gas (per mcf)                    $ 6.03          $  -
     Oil (per bbl)                     59.68             -

Average cost of production:
     Gas (per mcf) *                       -             -
     Oil (per bbl)                    $ 9.43          $  -


*Gas sold is a byproduct of oil production; costs associated with the gas sold
are included in the cost of oil production.

We have not filed any estimates of total, proved net oil and gas reserves with
any federal authority or agency since the beginning of our last fiscal year.

We do not anticipate investing in or purchasing assets and/or property for the
purpose of capital gains. It is our intention to purchase assets and/or property
for the purpose of enhancing our primary business operations. We are not limited
as to the percentage amount of our assets we may use to purchase any additional
assets or properties.

                                       12
<PAGE>

ITEM 3. LEGAL PROCEEDINGS
-------------------------

The Company is not aware of any pending or threatened litigation.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------

No matters were submitted to a vote of our stockholders during the fourth
quarter of the fiscal year ended May 31, 2007. Subsequent to the year-end,
stockholders voted on the Change of Name for the corporation to Exterra Energy
Inc.

                                     PART II
                                     -------

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
-----------------------------------------------------------------

Market Information

The Company's shares were listed for trading subsequent to year-end. Therefore,
there is no available information to provide quarterly high and low prices of
our common stock for the fiscal year ended May 31st, 2007. Subsequent the the
year end, the Company's common stock was quoted on the OTC Bulletin Board under
the symbol "GRGO". In July 2007, the Company received approval to change its
name to Exterra Energy Inc. Pursuant to this, a new trading symbol was granted
to Exterra Energy Inc. effective August 12th, 2007. The new trading symbol is
EENR.

Holders

As of May 31, 2007, there were approximately 260 holders of record of our common
stock, which figure does not take into account those shareholders whose
certificates are held in the name of broker-dealers or other nominee accounts.

Dividend Policy

We have not declared, paid cash dividends, or made distributions in the past. We
do not anticipate that we will pay cash dividends or make distributions in the
foreseeable future. We currently intend to retain and reinvest future earnings
to finance operations.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
-------------------------------------------------------------------------------

The following information should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere in this Form 10-KSB.

Results of Operations
---------------------

The following table sets forth the percentage relationship to total revenues of
principal items contained in the statements of operations of the consolidated
financial statements included herewith for the two most recent fiscal years
ended May 31, 2007 and 2006. It should be noted that percentages discussed
throughout this analysis are stated on an approximate basis.

                                           Fiscal Years Ended May 31,
                                 ----------------------------------------------
                                          2007                    2006
                                 ----------------------   ---------------------
                                  Amount     Percentage    Amount    Percentage
                                 --------    ----------   --------   ----------
  Total revenues                   50,578        100%        --          --
  Total costs and expenses        669,734      1,324%      10,755        --
  Total other income (expenses)      --            0%        --          --
  Income before income taxes     (619,156)     1,224%     (10,755)       --
  Income taxes                       --            0%        --          --
  Net loss                       (619,156)     1,224%     (10,755)       --


                                       13
<PAGE>

Year Ended May 31, 2007 and 2006
--------------------------------

We realized our first revenues during the year ended May 31, 2007 since we
acquired our oil properties in November 2006. For the year ended May 31, 2007,
our revenues were $50,578. We expect our oil revenues to increase in the
following year as our oil properties are brought to greater levels of
production.

We incurred well operating costs of $108,935 for the year ended May 31, 2007
compared to $-0- for the corresponding period of 2006. These expenses consisted
of costs incurred in connection with putting our oil properties into production.
We expect our operating expenses to continue to grow as we repair and improve
the wells we have purchased. Our general and administrative expenses were
$560,799 compared to $10,755 for the same period of 2006 as we incurred fees
with consultants for various types of work done. These fees include $272,000 for
the value of shares of our common stock which were issued to these consultants.
We also paid or accrued $108,000 to our management team. Our 2007 general
administrative expenses included $69,472 in legal and professional fees compared
to $0 in 2006. We expect our general and administrative expenses to continue to
rise as we develop into an operating oil company.

Our net loss from operations for the year ended May 31, 2007 was $619,156. Our
loss from operations for the year ended May 31, 2006 was $10,755. The increase
relates to our commencing the acquisition of oil properties.

LIQUIDITY AND CAPITAL RESOURCES

We had cash of $260,699 in our operating bank account at May 31, 2007. We owed
$77,135 in accounts payable and accrued expenses as of that date. During the
year ended May 31, 2007, we raised $475,000 in cash from the private placement
of shares of our common stock. We also raised $357,500 from the sale of our
Convertible Loans. We used $300,000 of those funds to purchase our oil
properties. We have a note payable of $300,000 due on November 1, 2007 with
accrued interest. The Convertible Loans are due on June 30, 2008 unless
converted to common stock by the holders. We believe that these funds will not
be adequate for our operating needs for the next 12 months. We estimate that we
will need to raise approximately $1,000,000 during the next 12 months to meet
our operating requirements. Also, if we identify additional oil and gas projects
that we want to purchase, we will likely have to choose to raise funds either
through the sales of our equity securities or through loans from banks and/or
third parties.

In the opinion of management, inflation has not had a material effect on the
operations of the Company.

Forward-Looking and Cautionary Statements
-----------------------------------------

This report includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements may relate to such matters as
anticipated financial performance, future revenues or earnings, business
prospects, projected ventures, new products and services, anticipated market
performance and similar matters. When used in this report, the words "may,"
"will," "expect," "anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking statements
regarding events, conditions, and financial trends that may affect our future
plans of operations, business strategy, operating results, and financial
position. We caution readers that a variety of factors could cause our actual
results to differ materially from the anticipated results or other matters
expressed in forward-looking statements. These risks and uncertainties, many of
which are beyond our control, include:

     *    the sufficiency of existing capital resources and our ability to raise
          additional capital to fund cash requirements for future operations;
     *    uncertainties involved in the rate of growth of our business and
          acceptance of any products or services;
     *    volatility of the stock market, particularly within the energy sector;
          and
     *    general economic conditions.

Although we believe the expectations reflected in these forward-looking
statements are reasonable, such expectations cannot guarantee future results,
levels of activity, performance or achievements.

Recent Accounting Pronouncements
--------------------------------

In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, "Fair Value Measurements" which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. Where applicable, SFAS No. 157 simplifies and codifies related
guidance within GAAP and does not require any new fair value measurements. SFAS

                                       14
<PAGE>

No. 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. Earlier
adoption is encouraged. The Company does not expect the adoption of SFAS No. 157
to have a significant effect on its financial position or results of operation.

In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109", which prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48 also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. FIN 48 is
effective for fiscal years beginning after December 15, 2006. The Company does
not expect the adoption of FIN 48 to have a material impact on its financial
reporting, and the Company is currently evaluating the impact, if any, the
adoption of FIN 48 will have on its disclosure requirements.

ITEM 7. FINANCIAL STATEMENTS
----------------------------

















                                       15
<PAGE>



     Independent Auditors' Report........................................... F-2

     Balance Sheet.......................................................... F-3

     Statements of Operations............................................... F-4

     Statements of Stockholders' Equity (Deficit)........................... F-5

     Statements of Cash Flows............................................... F-6

     Notes to the Financial Statements...................................... F-7
















                                       F-1

                                        16
<PAGE>

MOORE & ASSOCIATES, CHARTERED
   ACCOUNTANTS AND ADVISORS
   ------------------------
        PCAOB REGISTERED


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


The Board of Directors
Exterra Energy, Inc.
(Formerly Green Gold, Inc.)
Houston, Texas

We have audited the accompanying balance sheet of Exterra Energy Inc as of May
31, 2007 and the related statements of operations, stockholders' equity
(deficit) and cash flows for the years ended May 31, 2007 and 2006. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provided a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Exterra Energy Inc (a
development stage company) as of May 31, 2007 and the results of its operations
and its cash flows for the years ended May 31, 2007 and 2006 in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is in the development stage with no operating
results to date, a deficit in working capital and a deficit in stockholders'
equity, all of which raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



Moore & Associates, Chartered
Las Vegas, Nevada
August 21, 2007


      2675 S. Jones Blvd. Suite 109, Las Vegas, Nevada 89146 (702) 253-7499
                                Fax (702)253-7501

                                       F-2

                                        17
<PAGE>

                              EXTERRA ENERGY, INC.
                                  BALANCE SHEET

                                                                       May 31,
                                                                         2007
                                                                      ---------

                          ASSETS

CURRENT ASSETS
             Cash and equivalents                                     $ 260,699
             Oil revenues receivable                                     17,555
                                                                      ---------

                             Total Current Assets                       278,254
                                                                      ---------

OIL AND GAS PROPERTIES, net                                             588,000
                                                                      ---------

TOTAL ASSETS                                                          $ 866,254
                                                                      =========


          LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
             Accounts payable and accrued expenses                    $  77,135
             Oil and gas properties purchase note payable               300,000
                                                                      ---------

                             Total Current Liabilities                  377,135
                                                                      ---------

LONG-TERM DEBT
             Convertible loans, net of discount                         263,133
                                                                      ---------

TOTAL LIABILITIES                                                       640,268
                                                                      ---------

STOCKHOLDERS' EQUITY

             Common stock: $0.001 par value,
             75,000,000 shares authorized: 11,494,000
             shares issues and outstanding                               11,494
             Additional Paid in Capital                                 844,403
             Deficit Accumulated During Development Stage              (629,911)
                                                                      ---------

                             Total Stockholders' Equity                 225,986
                                                                      ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $ 866,254
                                                                      =========


   The accompanying notes are an integral part of these financial statements.

                                       F-3

                                        18
<PAGE>

                              EXTERRA ENERGY, INC.
                            STATEMENTS OF OPERATIONS


                                                   For the           For the
                                                  Year Ended        Year Ended
                                                 May 31, 2007      May 31, 2006
                                                 ------------      ------------

REVENUES                                         $     50,578      $       --


EXPENSES
  Well Operating Costs                                108,935              --
  General & Administrative Expenses                   560,799            10,755
                                                 ------------      ------------

             Total Expenses                           669,734            10,755
                                                 ------------      ------------

NET (LOSS)                                       $   (619,156)     $    (10,755)
                                                 ============      ============


Basic (Loss) per Share                           $      (0.06)     $      (0.00)
                                                 ============      ============


Weigted Average Number of Shares
Outstanding                                        10,747,000        10,000,000
                                                 ============      ============



   The accompanying notes are an integral part of these financial statements.

                                       F-4

                                        19
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>

                                     EXTERRA ENERGY, INC.
                               STATEMENTS OF STOCKHOLDERS EQUITY



                                                          Additional
                                      Common Stock         Paid-in    Accumulated
                                  Shares       Amount      Capital      Deficit        Total
                                ----------   ----------   ----------   ----------    ----------

February 3, 2006 (inception)

Shares issued for cash,
$0.0001 per share               10,000,000   $   10,000   $     --     $     --      $   10,000

Net Loss for the period from
inception on February 3, 2006
through May 31, 2006                  --           --           --        (10,755)      (10,755)
                                ----------   ----------   ----------   ----------    ----------

Balance May 31, 2006            10,000,000       10,000         --        (10,755)         (755)

Shares issued for cash,
$0.50 per share                    950,000          950      474,050         --         475,000

Shares issued for services,
$0.50 per share                    544,000          544      271,456         --         272,000

Contributed capital                   --           --          4,530         --           4,530

Beneficial conversion feature         --           --         94,367         --          94,367

Net loss for the
year ended May 31, 2007               --           --           --       (619,156)     (619,156)
                                ----------   ----------   ----------   ----------    ----------

Balance May 31, 2007            11,494,000   $   11,494   $  844,403   $ (629,911)   $  225,986
                                ==========   ==========   ==========   ==========    ==========




          The accompanying notes are an integral part of these financial statements.

                                             F-5

                                              20
<PAGE>

                                   EXTERRA ENERGY, INC.
                                 STATEMENTS OF CASH FLOWS


                                                                  For the        For the
                                                                 Year Ended     Year Ended
                                                               May 31, 2007    May 31, 2006
                                                               ------------    ------------


NET LOSS                                                         $(619,156)     $ (10,755)

        Adjustments to reconcile net loss to cash from
         operating activities:
          Depletion                                                 12,000           --
          Common stock issued for services                         272,000           --
          Contributed capital                                        4,530           --
        Changes in operating assets and liabilities:
          (Increase) in oil revenues receivable                    (17,555)          --
          Increase in accounts payable and accrued expenses         76,380            755
                                                                 ---------      ---------

        Net Cash (Used)
            by Operating Activities                               (271,801)       (10,000)
                                                                 ---------      ---------

CASH FROM INVESTING ACTIVITIES

        Purchase of oil and gas properties                        (300,000)          --
                                                                 ---------      ---------

        Net Cash (Used)
            by Operating Activities                               (300,000)          --
                                                                 ---------      ---------

CASH FROM FINANCING ACTIVITIES

        Proceeds from convertible debt                             357,500           --
        Proceeds from issuance of common stock                     475,000         10,000
                                                                 ---------      ---------

        Net Cash Provided
            by Financing Activities                                832,500         10,000
                                                                 ---------      ---------

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                               260,699           --

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      --             --
                                                                 ---------      ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                       $ 260,699      $    --
                                                                 =========      =========

SUPPLEMENTAL CASH FLOW INFORMATION:

        Cash Paid For:
            Interest                                             $    --        $    --
                                                                 =========      =========
            Income Taxes                                         $    --        $    --
                                                                 =========      =========

        Non Cash Financing Activities:
            Oil and gas properties purchased for notes payable   $ 300,000      $    --
                                                                 =========      =========



        The accompanying notes are an integral part of these financial statements.

                                           F-6

                                            21
</TABLE>
<PAGE>

                              EXTERRA ENERGY, INC.
                        Notes to the Financial Statements
                              May 31, 2007 and 2006

NOTE 1 - ORGANIZATION AND HISTORY

     Exterra Energy Inc. (the Company) was incorporated on February 3, 2006 in
the State of Nevada. The Company was engaged in the exploration for jade.
Initial efforts focused on the Green Gold Jade Property.

     In 2006 the Company acquired oil and gas properties in the United States.
The Company is reworking the wells on the property and intends to raise the
capital to complete additional drilling.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

     a. Accounting Method

     The Company uses the successful efforts method of accounting for oil and
gas producing activities. Costs to acquire mineral interests in oil and gas
properties, to drill and equip exploratory wells that find proved reserves, and
to drill and equip development wells are capitalized. Costs to drill exploratory
wells that do not find proved reserves, geological and geophysical costs, and
costs of carrying and retaining unproved properties are expensed.

     Unproved oil and gas properties that are individually significant are
periodically assessed for impairment of value, and a loss is recognized at the
time of impairment by providing an impairment allowance. Other unproved
properties are amortized based on the Company's experience of successful
drilling and average holding period. Capitalized costs of producing oil and gas
properties, after considering estimated dismantlement and abandonment costs and
estimated salvage values, are depreciated and depleted by the unit-of-production
method. Support equipment and other property and equipment are depreciated over
their estimated useful lives.

     On the sale or retirement of a complete unit of a proved property, the cost
and related accumulated depreciation, depletion, and amortization are eliminated
from the property accounts, and the resultant gain or loss is recognized. On the
retirement or sale of a partial unit of proved property, the cost is charged to
accumulated depreciation, depletion, and amortization with a resulting gain or
loss recognized in income.

     b. Basic Loss Per Share

                                 For the Year Ended
                                    May 31, 2007

                      Loss             Shares         Per Share
                   (Numerator)      (Denominator)      Amount
                   -----------      -------------      ------

                  $    (619,156)     10,747,000     $      (0.06)
                  =============      ==========     ============

                                 For the Year Ended
                                    May 31, 2006

                      Loss             Shares        Per Share
                   (Numerator)      (Denominator)      Amount
                   -----------      -------------      ------

                  $     (10,755)     10,000,000     $      (0.00)
                  =============      ==========     ============

     The computations of basic loss per share of common stock are based on the
weighted average number of shares outstanding at the date of the financial
statements. There are no common stock equivalents outstanding.

                                       F-7

                                        22
<PAGE>

                              EXTERRA ENERGY, INC.
                        Notes to the Financial Statements
                              May 31, 2007 and 2006

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     c. Provision for Taxes

     Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and operating loss
and tax credit carry forwards and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely that not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.

     Net deferred tax assets consist of the following components as of May 31,
2007 and 2006:

                                                   2007             2006
                                                ---------        ---------
     Deferred tax assets
         NOL Carryover                          $ 121,690        $   3,657
     Valuation allowance                         (121,690)          (3,657)
                                                ---------        ---------

     Net deferred tax asset                     $    --          $    --
                                                =========        =========

     The income tax provision differs from the amount of income tax determined
by applying the U.S. federal income tax rate of 34% to pretax income from
continuing operations for the years ended May 31, 2007 and 2006 due to the
following:

                                                     2006           2005
                                                  ---------      ---------

     Book loss                                    $(210,513)     $  (3,657)
     Common stock issued for services                92,480           --
     Valuation allowance                            118,033          3,657
                                                  ---------      ---------

                                                  $    --        $    --
                                                  =========      =========

     At May 31, 2007, the Company had net operating loss carry forwards of
approximately $358,000 that may be offset against future taxable income through
the year 2027. No tax benefit has been reported in the May 31, 2007 financial
statements since the potential tax benefit is offset by a valuation allowance of
the same amount.

     Due to the change in ownership provisions of the Tax Reform Act of 1986,
net operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in the future.

     d. Estimates

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

                                       F-8

                                        23
<PAGE>

                              EXTERRA ENERGY, INC.
                        Notes to the Financial Statements
                              May 31, 2007 and 2006

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     e. Fair Value of Financial Instruments

     As at May 31, 2007, the fair value of cash and accounts and advances
payable, including amounts due to and from related parties, approximate carrying
values because of the short-term maturity of these instruments.

     f. Recently Issued Accounting Pronouncements

     In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. Where applicable, SFAS No. 157 simplifies and codifies
related guidance within GAAP and does not require any new fair value
measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. Earlier adoption is encouraged. The Company does not expect the
adoption of SFAS No. 157 to have a significant effect on its financial position
or results of operation.

     In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109", which prescribes a recognition
threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48 also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. FIN 48 is
effective for fiscal years beginning after December 15, 2006. The Company does
not expect the adoption of FIN 48 to have a material impact on its financial
reporting, and the Company is currently evaluating the impact, if any, the
adoption of FIN 48 will have on its disclosure requirements.

     In March 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 156, "Accounting for Servicing of Financial
Assets--an amendment of FASB Statement No. 140." This statement requires an
entity to recognize a servicing asset or servicing liability each time it
undertakes an obligation to service a financial asset by entering into a
servicing contract in any of the following situations: a transfer of the
servicer's financial assets that meets the requirements for sale accounting; a
transfer of the servicer's financial assets to a qualifying special-purpose
entity in a guaranteed mortgage securitization in which the transferor retains
all of the resulting securities and classifies them as either available-for-sale
securities or trading securities; or an acquisition or assumption of an
obligation to service a financial asset that does not relate to financial assets
of the servicer or its consolidated affiliates. The statement also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable, and permits an entity to choose either
the amortization or fair value method for subsequent measurement of each class
of servicing assets and liabilities. The statement further permits, at its
initial adoption, a one-time reclassification of available for sale securities
to trading securities by entities with recognized servicing rights, without
calling into question the treatment of other available for sale securities under
Statement 115, provided that the available for sale securities are identified in
some manner as offsetting the entity's exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to subsequently
measure at fair value and requires separate presentation of servicing assets and
servicing liabilities subsequently measured at fair value in the statement of

                                       F-9

                                        24
<PAGE>

                              EXTERRA ENERGY, INC.
                        Notes to the Financial Statements
                              May 31, 2007 and 2006

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     f. Recently Issued Accounting Pronouncements (Continued)

financial position and additional disclosures for all separately recognized
servicing assets and servicing liabilities. This statement is effective for
fiscal years beginning after September 15, 2006, with early adoption permitted
as of the beginning of an entity's fiscal year. Management believes the adoption
of this statement will have no immediate impact on the Company's financial
condition or results of operations.

     g. Long-lived Assets-Technology

     The Company's technology is recorded at its cost. The Company continually
monitors events and changes in circumstances that could indicate carrying
amounts of long-lived assets may not be recoverable. When such events or changes
in circumstances are present, the Company assesses the recoverability of
long-lived assets by determining whether the carrying value of such assets will
be recovered through undiscounted expected future cash flows. If the total of
the future cash flows is less than the carrying amount of those assets, the
Company recognizes an impairment loss based on the excess of the carrying amount
over the fair value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or the fair value less costs to sell.

     h. Concentration of Risk

     Cash - The Company at times may maintain a cash balance in excess of
insured limits. At May 31, 2007, the Company has approximately $160,000 in
excess of insured limits.

     i. Revenue Recognition

     The Company recognizes oil revenues when pumped and metered by the
customer.

     j. Accounts Receivable

     Accounts receivable are carried at the expected net realizable value. The
allowance for doubtful accounts is based on management's assessment of the
collectibility of specific customer accounts and the aging of the accounts
receivables. If there were a deterioration of a major customer's
creditworthiness, or actual defaults were higher than historical experience, our
estimates of the recoverability of the amounts due to us could be overstated,
which could have a negative impact on operations.

     k. Cash and Cash Equivalents

     For purposes of the Statement of Cash Flows, the Company considers all
highly liquid instruments purchased with a maturity of three months or less to
be cash equivalents to the extent the funds are not being held for investment
purposes.

     l. Property and Equipment

              Property and equipment are carried at cost, net of accumulated
depreciation. Depreciation is computed straight-line over periods ranging from
three to five years.

                                      F-10

                                       25
<PAGE>

                              EXTERRA ENERGY, INC.
                        Notes to the Financial Statements
                              May 31, 2007 and 2006

NOTE 3 - GOING CONCERN

     The Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company does not have significant
cash or other current assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a going
concern. The Company has applied for funding to drill additional wells and to
improve the existing wells on its oil and gas properties is expected to provide
sufficient revenues to allow it to continue as a going concern. In the interim
the Company expects to raise operating capital through the private placement of
its common stock or debt instruments.

     The ability of the Company to continue as a going concern is dependent upon
its ability to successfully accomplish the plan described in the preceding
paragraph and eventually attain profitable operations. The accompanying
financial statements do not include any adjustments that may be necessary if the
Company is unable to continue as a going concern.

NOTE 4 - SIGNIFICANT EVENTS

     During the year ended May 31, 2007, the Company sold 10,000,000 units of
its common stock at $0.001 per share.

     During the year ended May 31, 2007, the Company sold 950,000 units of its
common stock at $0.50 per unit. Each unit consists of one share of common stock
and a warrant to purchase an additional share at $1.00 per share.

     During November 2006, the Company purchased oil and gas properties in the
State of Texas for $600,000. The purchase price was paid in cash of $300,000
during December 2006 and a note payable of $300,000.

     During the year ended May 31, 2007, the Company issued 544,000 shares of
its common stock for services valued at $0.50 per share.

NOTE 5 - OIL AND GAS PROPERTIES

     A summary of the oil and gas properties is as follows:

                                             2007           2006
                                          ---------      ---------

     Oil and gas properties               $ 600,000      $    --
     Accumulated depletion                  (12,000)          --
                                          ---------      ---------

     Net oil and gas properties           $ 588,000      $    --
                                          =========      =========

     The Company is depleting its oil and gas properties over the expected life
of 25 years using the straight line method. Depletion expense was $12,000 and
$-0- for the years ended May 31, 2007 and 2006, respectively.

                                      F-11

                                       26
<PAGE>

                              EXTERRA ENERGY, INC.
                        Notes to the Financial Statements
                              May 31, 2007 and 2006

NOTE 6 - NOTES PAYABLE

Oil and Gas Properties Purchase Note Payable

     Principal and interest on the note is payable on the tenth (10th) day of
each calendar month, beginning on January 10, 2007, in monthly installments
equal to the difference between the prior month's (i) income and (ii) the
royalties, severance, ad valorem, lifting and transportation expenses directly
related to the operation of the Leases. Each monthly installment will be applied
first to any outstanding and accrued interest and, thereafter, to principal on
the note. The entire principal amount outstanding under the note and all accrued
interest thereon is due and payable on November 1, 2007. The note payable is
secured by the oil and gas properties. The Company has accrued $15,000 in
interest on the note payable as of May 31, 2007.

Convertible Loans

     During the year ended May 31, 2007, the Company received $357,500 from the
sale of its Convertible Loans. The Company intends to sell up to $450,000 of the
Convertible Loans accordingly the offering remains open as of May 31, 2007. The
Convertible Loans will have a term of one year from June 30, 2007, the date of
the closing of the offering, and bear interest at 10% per annum payable
quarterly. 10% of the face value of the Convertible Loan will be paid to the
holders as a revenue sharing bonus. This bonus will be paid from initial
production revenue realized from the first six months of net revenue from the
University Lands, Pecos County, Texas. 150,000 common shares will be provided as
a common share bonus. These shares will have a 2 year hold. The Convertible Loan
is convertible into common shares of the Company at a price of $0.75 per share
for a total of 600,000 common shares. The common shares will be subject to a
"pooling arrangement", whereby the shares will be released in equal installments
over a 6 month period, beginning one year from the closing of this financing.
The Company may force conversion into common shares. This will only occur if the
Company's common shares trade at $2.00 per share or more for a period of 90
consecutive days, or if the Company completes a financing for $3 million at a
price of $1.50 per share or higher.

     The Company has recorded a discount on the Convertible Loans of $94,367
which represents the beneficial conversion feature. The Company will amortize
the discount over the life of the Convertible Loans. The discount was determined
using the Black-Scholes pricing model and assumes a 2 year maturity, a risk free
interest rate of 4.99% and a volatility of 12%.






                                      F-12

                                       27
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
-----------------------------------------------------------------------

The Company engaged Moore & Associates, Chartered ("Moore") as its independent
accountants on June 1st, 2006. Prior to June 1st, 2006, the Company had not
consulted with Moore regarding (i) the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's consolidated financial
statements, and no written report or oral advice was provided to the Company by
Moore concluding there was an important factor to be considered by the
Registrant in reaching a decision as to an accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of a
disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to Item 304 of Regulation S-K, or a reportable
event, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K.

The decision to the principal auditor was recommended and approved by the
Company's Board of Directors.

ITEM 8A. CONTROLS AND PROCEDURES
--------------------------------

(a) Disclosure Controls and Procedures. Disclosure controls and procedures are
controls and other procedures that are designed to ensure that the information
required to be disclosed by a company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in the reports that a company
files or submits under the Exchange Act is accumulated and communicated to the
Company's management, including its Principal Executive Officer and Principal
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.

We maintain disclosure controls and procedures designed to ensure that material
information related to our company is recorded, processed, summarized and
reported within the time periods specified in the SEC rules and forms.

Under the supervision of our Chief Executive Officer and our President, acting
as our Chief Financial Officer, we re-evaluated the effectiveness of the design
and operation of our disclosure controls and procedures as of the end of the
period covered by this report. Based upon that evaluation, our Chief Executive
Officer and President concluded that as of May 31, 2007, the design and
operation of such disclosure controls and procedures were effective.

There were no changes in the Company's internal controls over financial
reporting that occurred during the fiscal quarter ended May 31, 2007 that have
materially affect, or are reasonably likely to materially affect, the Company's
internal control over financial reporting.

ITEM 8B. OTHER INFORMATION
--------------------------

None.

Reports on Form 8-K

Since the beginning of our fiscal fourth quarter commencing March 1, 2007
through the date of this report, we have filed current reports on Form 8-K
reporting the following:

On August 8, 2007 the Company filed a Form 8K announcing that an Amendment to
the Articles of Incorporation has been filed with the Nevada Secretary of State
changing the name of the Corporation to Exterra Energy Inc. A new CUSIP number
has been assigned and the NASDAQ has notified the Corporation that the name
change takes effect at the opening of business August 9, 2007, with the
Corporation being assigned a new trading symbol of "EENR" for the Corporation's
common stock.

On August 21, 2007 the Company filed a Form 8-K announcing the resignation of
Mr. Ronald P. Erickson as an officer of the Company and from the Board of
Directors. Mr. James D. Romano has been appointed to serve the remainder of Mr.
Erickson's term as Secretary and Treasurer of the Company until the next annual
meeting of the Directors.

                                       28
<PAGE>

PART III
--------

ITEM 9. DIRECTORS, EXECUTIVES OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
----------------------------------------------------------------------

     The following table sets forth the names, ages, and offices held by our
directors and executive officers as of the end of our fiscal year:

Name               Position                            Director Since      Age
----               --------                            --------------      ---
Gordon McDougall   Chief Executive Officer, Director   December 22, 2006   51
James D. Romano    President, Acting Chief Financial   November 14, 2006   50
                   Officer and Director
Ronald Erickson    Secretary, Treasurer and Director   February 3, 2006    63
Ray Ledesma        Director                            December 5, 2006    54

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
directors for service on 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. The Executive Committee
of the Board of Directors, to the extent permitted under Nevada law, exercises
all of the power and authority of the Board in the management of the business
and affairs of the Company between meetings of the Board.

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

Gord McDougall - CEO & Director
-------------------------------

Mr. McDougall became the CEO and a Director of Exterra Energy, Inc in December
2006.

From February 2005 until August 2006, Mr. McDougall was the President of
Wentworth Energy, Inc whose shares are quoted on the OTC Bulletin Board.

Since 1984 Mr. McDougall has founded several companies, in various industries,
and has been instrumental in their growth. He has also been a consultant to
several companies, assisting with their planning, financing and growth.

Born in New Brunswick, Canada, Mr. McDougall completed the Canadian Securities
Course in 1984 and became a stockbroker with Nesbitt Thomson in 1984. Mr.
McDougall is well-versed in raising capital, managing start-up companies and
coaching companies through their initial growth.

James D. Romano - President & Director
--------------------------------------

For the past 15 years, Mr. Romano has been involved in the management, strategic
planning, corporate communications and financing of public companies in the oil
and gas, as well as mining sectors. These companies have been listed on public
exchanges in both Canada and the United States. He has been instrumental in the
negotiation of project acquisition, due diligence, as well as negotiate
financing to complete such acquisitions.

Prior to joining the Company in November 2006, Mr. Romano founded Horizon
Industries Ltd. ("Horizon"), where he launched the Company into the oil and gas
business in the US. Mr. Romano acted as President and Director of Horizon, where
he led the company through its formative stage through to production and cash
flow.

                                       29
<PAGE>

Mr. Romano brings a diverse 30 years of business and entrepreneurial skill to
the company and he will be a valuable asset and leader to our endeavours.

Ray Ledesma - Director
----------------------

Mr. Ledesma is a graduate of Rice University with a BS in Chemical Engineering,
Class of 1977. Re-trained as a reservoir petroleum engineer, he began his career
with Amoco Production Company and continued on with other firms such as Union
Texas Petroleum (at that time a subsidiary of Allied Chemical), and Leede
Exploration. His experience includes the 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.

Mr. Ledesma incorporated his company, Star of Texas Energy Services, in April,
1997 under Texas law. The company's primary focus is the exploration and
production of domestic natural gas. Initially, operations had been in
conventional gas reservoirs with 3D seismic projects along the Texas Gulf Coast
and in deep South Texas where the company drilled and/or re-entered a total of
39 wells. Additionally, the company has also participated in the drilling of 20
wells as a non-operating working interest owner.

Since October, 2001, Star of Texas has been pursuing non-conventional gas
reserve development in the prolific Barnett Shale gas trend of North Texas. The
company has drilled and participated in over 70 wells in the Barnett Shale, of
that number, 39 are vertical. Due to its tremendous success, Star of Texas is
continuing to expand in some of the most geologically favorable areas of the
Barnett.

Ronald P. Erickson - Director
-----------------------------

Ronald P. Erickson has been an Officer and a Director of Exterra Energy Inc.
since the Company's inception on February 03, 2006. Previously he was President
and Chief Executive Officer of Visualant, Inc. He resigned from this position on
August 31, 2004 at which time he was appointed Chairman of the Board of
Visualant. Resident in Seattle, he is a seasoned executive with more than 20
years of expertise in the high technology, telecommunications and microcomputer
industries.

Mr. Erickson was Chairman of Intrinsyc Software Inc., a Vancouver-based
publicly-traded company providing proprietary software and solutions which
enable the development and networking of intelligent devices such as PDA's. Mr.
Erickson is the former chair, and former CEO of eCharge, an electronic payment
systems developer, where he played helped to raise approximately US $100 million
in equity capital from major international investors.

Prior to that, Mr. Erickson was co-founder, Chairman, President and CEO of
GlobalTel Resources, Inc., a provider of telecommunication services, messaging
and intranet solutions. During his career Mr. Erickson has also held executive
positions at Egghead Software Inc, NBI Inc and MicroRim, Inc. With a law degree
from the University of California, Davis, he maintains an active license to
practice law in the State of Washington and the District of Columbia.

Subsequent to the year end, Mr. Erickson tendered his resignation as an officer
and from the Board on August 13th, 2007.

ITEM 10. EXECUTIVE COMPENSATION
-------------------------------

The two executive officers of the Corporation, Messrs. McDougall and Romano have
each been receiving a salary of $10,800 per month since December 1, 2006, half
of which is paid and half is accrued. In addition to the salary, both Messrs.
McDougall and Romano receive as additional compensation 80,000 shares of the
Company's common stock quarterly up to a maximum of 960,000 shares each over a
three year period of time. Messrs. Erickson and Ledesma receive 37,500 shares of
the Company's common stock each quarter, up to a maximum of 150,000 shares each,
for acting as directors of the Company.

The Company has no pension, health, annuity, bonus, insurance, stock options,
profit sharing or similar benefit plans. There are presently no personal
benefits available for directors, officers or employees of the Company.

Key personnel involved in the actual operations of the Company's interests are
typically paid on a contract basis or as sub-contractors of vendors and service
providing companies not owned directly by the Company. Such sub-contracting
engagement and per job payments are commonplace in the Company's business. The
Company will continue to pay such service providers and third party contractors
for running its operations.

                                       30
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------

The following table sets forth information, to the best of our knowledge as May
31, 2007, with respect to each person known by us to own beneficially more than
5% of our outstanding common stock, each director and all directors and officers
as a group.

Security Ownership of Certain Beneficial Owners.

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

Common     James D. Romano                         160,000                1.39%
           Suite 204 - 865 West 15th Avenue
           Vancouver, B.C., V5R 1Z8

Common     Gordon McDougall                        160,000                1.39%
           15577 Columbia Avenue
           White Rock, B.C., V4A 1K7

Common     Ray Ledesma                             115,000                1.00%
           7804 Bronco Lane, Suite 100
           Lago Vista, Texas, 78645

Common     Ronald P. Erickson
           9437 N.E. Coral Ct.                    4,075,000              35.45%
           Bainbridge Island, WA 98110

Common     ALL EXECUTTIVE OFFICERS AND            4,510,000              39.24%
           DIRECTORS AS A GROUP


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

During the past two fiscal years, there have been no transactions between us and
any officer, director, nominee for election as director, or any shareholder
owning greater than five percent (5%) of our outstanding shares, nor any member
of the above referenced individuals' immediate family, except as set forth
below.

It is our policy that any future material transactions between us and members of
management or their affiliates shall be on terms no less favorable than those
available from unaffiliated third parties.

ITEM 13. EXHIBITS
-----------------

Exhibit No.                        Exhibit Name

3.1       Articles of Incorporation (previously filed with Form SB-1 on July 20,
          2007)

3.2       Bylaws (previously filed with Form SB-1 on July 20, 2007)

3.3       Certificate of Amendment of Articles of Incorporation*

10.1      Agreement with Green Gold Jade Property, Dated February 24, 2006,
          (previously filed with SB-1 on July 20, 2007)

31.1      Certification of Principal Executive Officer as adopted pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2      Certification of Principal Financial Officer as adopted pursuant to
          Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1      Certification of Principal Executive Officer Pursuant to 18 U.S.C
          Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002. *

32.2      Certification of Principal Financial Officer Pursuant to 18 U.S.C
          Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002. *

*filed herewith

                                       31
<PAGE>

ITEM 14. PRINCIPALS ACCOUNTANTS FEES AND SERVICES
-------------------------------------------------

We do not have an audit committee and as a result our entire board of directors
performs the duties of an audit committee. Our board of directors will approve
in advance the scope and cost of the engagement of an auditor before the auditor
renders audit and non-audit services. As a result, we do not rely on
pre-approval policies and procedures.

Audit Fees
----------

The aggregate fees billed by our independent auditors, Moore & Associates,
Chartered for professional services rendered for the audit of our annual
financial statements included in our Annual Reports on Form 10-KSB for the years
ended May 31, 2007 and 2006, and for the review of quarterly financial
statements included in our Quarterly Reports on Form 10-QSB for the quarters
ending June 30, September 30, and December 31, 2006 and 2005, were:

                                                2007            2006
                                                ----            ----

      Moore & Associates, Chartered           $7,500.00       $1,000.00

Audit Related Fees
------------------

For the years ended May 31, 2007 and 2006, there were no fees billed for
assurance and related services by Moore & Associates relating to the performance
of the audit of our financial statements which are not reported under the
caption "Audit Fees" above.

Tax Fees
--------

For the years ended May 31, 2007 and 2006, fees billed by Moore & Associates,
Chartered, respectively, for tax compliance, tax advice and tax planning were
$-0- and $-0-, respectively.

We do not use the auditors for financial information system design and
implementation. These services, which include designing or implementing a system
that aggregates source data underlying the financial statements or generates
information that is significant to our financial statements, are provided
internally or by other service providers. We do not engage the auditors to
provide compliance outsourcing services.

The Board of Directors has considered the nature and amount of fees billed by
Moore & Associates. Chartered and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining and Moore &
Associates' independence.


SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

EXTERRA ENERGY INC.


BY: /S/ JAMES D. ROMANO
        James D. Romano
        President & Director

Dated: August 29th, 2007

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.


        Signature                         Title                     Date
        ---------                         -----                     ----


/S/ JAMES D. ROMANO               President & Director        August 29th, 2007
--------------------------
James D. Romano


/S/ GORDON C. MCDOUGALL           CEO & Director              August 29th, 2007
--------------------------
Gordon C. McDougall

                                       32