UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

> QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934





(Exact name of registrant as specified in its charter)

| | Alberta, Canada                                               | n/a                                     
| | ------------------------------------------------------------- | ----------------------------------------
| | (State or other jurisdiction ofincorporation or organization) | (I.R.S. Employer
    Identification No.)

| | Suite 2600, 500  4th Avenue S.W.
    Calgary, Alberta, Canada | T2P 2V6   
| | -------------------------------------------------------------- | ----------
| | (Address of principal
    executive offices)                   | (Zip Code)

403-263-0262

(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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____

There were 9,241,836 shares outstanding of the registrants Common Stock without
par value as of June 30, 2003.



ENTERRA ENERGY CORP.

|                                                                       | INDEX                                                                                                             | Page No.
|---------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | --------
|                                                                       | PART I  FINANCIAL
    INFORMATION                                                                                |         
|Item l. Financial Statements
    (Unaudited):                          |                                                                                                                  
|                                                                       | Consolidated Balance Sheets at
    June 30, 2003 and December 31, 2002                                            | 3       
|                                                                       | Consolidated Statements of
    Earnings and Retained Earnings  Three and Six Months Ended June 30, 2003 and 2002 | 4       
|                                                                       | Consolidated Statements of Cash
    Flows - Three and Six Months Ended June 30, 2003 and 2002                     | 5       
|                                                                       | Notes to Consolidated Financial
    Statements                                                                    | 6       
|Item 2. Managements
    Discussion and Analysis or Plan of Operations | 12                                                                                                               
|Item 3. Controls and Procedures                                        | 23                                                                                                               
|                                                                       | PART II  OTHER
    INFORMATION                                                                                   |         
|Item 1. Legal Proceedings                                              | 24                                                                                                               
|Item 2. Changes in Securities
    and Use of Proceeds                  | 24                                                                                                               
|Item 3. Defaults Upon Senior
    Securities                            | 24                                                                                                               
|Item 4. Submission of Matters
    to a Vote of Security Holders        | 24                                                                                                               
|Item 5. Other Information                                              | 24                                                                                                               
|Item 6. Exhibits and Reports on
    Form 8-K                           | 24                                                                                                               
|Signatures                                                             | 25                                                                                                               
|                                                                       |                                                                                                                  

- 2 -

|ENTERRA ENERGY CORP.                                                
|--------------------------------------------------------------------
|Consolidated Balance Sheets                                         
|(Expressed in Canadian dollars)                                     
|                                                                    
|                                                                    
|                                                                    
|Assets                                                              
|Current assets                                                      
|Cash                                                                
|Accounts receivable                                                 
|Prepaid expenses and deposits                                       
|                                                                    
|                                                                    
|Capital assets                                                      
|Deferred financing charges (note
    5)                             
|                                                                    
|                                                                    
|Liabilities                                                         
|Current liabilities                                                 
|Accounts payable and accrued
    liabilities                        
|Income taxes payable                                                
|Bank indebtedness (note 2)                                          
|Current portion of long-term debt
    (note 3)                      
|                                                                    
|                                                                    
|Provision for future abandonment
    and site restoration costs     
|Future income tax liability (note
    8)                            
|Long term debt (note 3)                                             
|Deferred gain                                                       
|Series 1 preferred shares (note 1)                                  
|                                                                    
|                                                                    
|Shareholders Equity                                                
|Share capital (note 4)                                              
|Contributed surplus (note 4)                                        
|Retained earnings                                                   
|                                                                    
|Hedging Contracts (note 7)                                          
|Subsequent Event (note 9)                                           
|                                                                    
|                                                                    
|Approved on behalf of the Board :                                   
|Reg Greenslade                                                      
|Director                                                            
|See accompanying notes to
    consolidated financial statements- 3 -

|ENTERRA ENERGY CORP.                                           
|---------------------------------------------------------------
|Consolidated Statements of
    Earnings and Retained Earnings  
|Three and Six Months Ended June
    30                         
|(Expressed in Canadian dollars)                                
|(Unaudited)                                                    
|                                                               
|Revenue                                                        
|Oil and gas                                                    
|                                                               
|Expenses                                                       
|Royalties, net of ARTC                                         
|Production                                                     
|General and administrative                                     
|Amortization of deferred financing charges                     
|Interest on long-term debt                                     
|Depletion, depreciation and future site
    restoration        
|                                                               
|Earnings before the following                                  
|Gain on redemption of preferred shares                         
|Earnings before income taxes                                   
|Income taxes :                                                 
|Current                                                        
|Future (recovery) (note 8)                                     
|                                                               
|Net earnings                                                   
|                                                               
|Retained earnings, beginning of period                         
|Retained earnings, end of period                               
|                                                               
|Earnings per share :                                           
|Basic                                                          
|Diluted                                                        
|See accompanying notes to consolidated
    financial statements

- 4 -

|ENTERRA ENERGY
    CORP.                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Consolidated
    Statements of Cash Flows                                                                                                                                   
|Three and Six
    Months Ended June 30                                                                                                                                      
|(Expressed in
    Canadian dollars)                                                                                                                                         
|(Unaudited)                                                                                                                                                                 
|Cash provided by (used in) :                                                                                                                                                
|Operations                                                                                                                                                                  
|Net earnings                                                                                                                                                                
|Add non-cash items :                                                                                                                                                        
|Depletion, depreciation and future
    site restoration                                                                                                                     
|Future income taxes                                                                                                                                                         
|Amortization of deferred gain                                                                                                                                               
|Amortization of deferred financing
    charges                                                                                                                              
|Gain on redemption of preferred
    shares                                                                                                                                  
|                                                                                                                                                                            
|Net change in non-cash working
    capital items :                                                                                                                          
|Accounts receivable                                                                                                                                                         
|Prepaid expenses and deposits                                                                                                                                               
|Accounts payable and accrued
    liabilities                                                                                                                                
|Income taxes payable                                                                                                                                                        
|                                                                                                                                                                            
|                                                                                                                                                                            
|Financing                                                                                                                                                                   
|Bank indebtedness                                                                                                                                                           
|Long-term debt                                                                                                                                                              
|Deferred financing charges                                                                                                                                                  
|Issue of common shares, net of
    issue costs                                                                                                                              
|Redemption of preferred shares                                                                                                                                              
|                                                                                                                                                                            
|                                                                                                                                                                            
|Investing                                                                                                                                                                   
|Capital assets additions                                                                                                                                                    
|Proceeds on disposal of property
    and equipment                                                                                                                          
|Future abandonment and site
    restoration costs                                                                                                                           
|                                                                                                                                                                            
|                                                                                                                                                                            
|Increase (decrease) in cash                                                                                                                                                 
|Cash, beginning of period                                                                                                                                                   
|Cash, end of period                                                                                                                                                         
|During the three and
    six months ended June 30, 2003 the Company paid respectively $367,306 and $758,575 (2002 -
    $228,533 and $436,656) of interest on long-term debt
|                                                                                                                                                                            
|See accompanying
    notes to consolidated financial statements                                                                                                             



> 

Enterra energy corp.

Notes to Consolidated Financial Statements

For the Three and Six Months ended June 30, 2003 and 2002

(Unaudited)

The interim consolidated financial statements of Enterra Energy Corp.
(the "Company") have been prepared by management in accordance with Canadian
generally accepted accounting principles. The interim consolidated financial statements
have been prepared following the same accounting policies and methods used in preparing
the consolidated financial statements for the fiscal year ended December 31, 2002, and
should be read in conjunction with those statements. The other disclosures below are
incremental to those reflected in the annual statements.



1. Series 1 preferred shares

> As at June 30, 2003 there were 677,277 (June 30, 2002 
>   1,294,466) Series 1 preferred shares outstanding. These shares are non-voting and
>   transferable. These shares are redeemable at any time by the Company or the holders for
>   $0.85 per share. There is no market for these shares and none is expected to develop. A
>   dividend of $11,388 was paid in the second quarter for a total of $23,368 paid on the
>   preferred shares in the first six months of 2003. This amount is included in interest
>   expense because the preferred shares are classified as debt since they are redeemable at
>   the option of the holder.

2. Bank indebtedness

> Bank indebtedness represents the outstanding balance under a line
>   of credit of $36,000,000 with the Alberta Treasury Branches. Drawings bear interest at
>   0.25% above the banks prime lending rate. Security is provided by a first charge
>   over all of the Companys assets. The balance is repayable on demand. While the loan
>   is due on demand, the Company is not subject to scheduled repayments.

3. Long-Term Debt

Assets secured with long-term debt are tangible oil and gas equipment
with a cost of $5,217,500. These assets are subject to depletion.

|**Description**                                                                                                                                                                                   | **Principal**
    **Outstanding** | **Less Current Portion** | **Net**
    **June 30**
    **2003** | **Net**
    **December 31**
    **2002**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------ | ------------------------------------ | ----------------------------------------
|                                                                                                                                                                                                  |                                   |                          |                                      |                                         
|Capital lease bearing interest at 8.605%,
    repayable monthly at $88,802 plus applicable taxes. The lease term is for 60 months, due
    October 1, 2007, with a purchase option of $1,000,000. | $ 4,414,858                       | $ 713,440                | $ 3,701,418                          | $ 4,069,139                             
|Capital lease bearing interest at 12.15%,
    repayable monthly at $4,448 plus applicable taxes. The lease term is 24 months due
    December 19, 2004 with a purchase option of $100.            | 67,249                            | 39,540                   | 27,709                               | 43,542                                  
|Note payable bearing interest at 8%, repayable
    monthly at $7,190. The note term is 15 months due December 20, 2003.                                                                           | 42,187                            | 42,187                   | -                                    | -                                       
|                                                                                                                                                                                                  | $ 4,524,294                       | $ 795,167                | $ 3,729,127                          | $ 4,112,681                             



Share Capital :

> (a) Issued :

****
    **Number of**
    **common shares**
    **Amount**Balance, December 31, 2002
    9,176,325
    $ 29,665,075Issued on exercise of options
    65,511
    265,552Balance, June 30, 2003
    9,241,836
    $ 29,930,627




> (b) Options :

**Number of**
    **Options**
    **Weighted-average exercise price**Outstanding at December 31, 2002
    871,703
    $4.35Options granted
    10,000
    $13.74Options exercised
    (65,511)
    ($4.05)Options cancelled
    (3,750)
    ($4.00)Outstanding at June 30, 2003
    812,442
    $4.49




> (c) Warrants :
>   On March 28, 2002 the Company agreed to issue 300,000 share
>     purchase warrants to an arms length U.S.-based consulting firm in connection with a
>     potential debt financing in the United States. The warrants are to have a two-year term
>     and are subject to different pricing (100,000 warrants at US$2.60, 100,000 at US$3.30 and
>     100,000 at US$4.00). The US$2.60 warrants have vested since the execution in May 2002 of a
>     non-binding letter of intent relating to the proposed financing. A value of $125,000 was
>     assigned to the 100,000 warrants at US$2.60. The remaining warrants are to vest only on
>     the successful closing and funding of the proposed financing. This value was determined
>     using the Black Scholes Option Pricing model using an interest rate of 5% and a volatility
>     factor of 50%. The $125,000 was credited to the Companys contributed surplus account
>     at December 31, 2002.



Pro forma net earnings  fair value based method of accounting for
    stock options:

The following table shows pro forma net earnings and earnings per
    common share had we applied the fair-value based method of accounting to stock options
    issued in the three and six months ended June 30, 2003 and 2002:

|                                                  | 2003                     | 2002                     | 2003                   | 2002                  
|------------------------------------------------- | ------------------------ | ------------------------ | ---------------------- | ----------------------
|                                                  | Three months
    June 30 | Three months
    June 30 | Six months
    June 30 | Six months
    June 30
|Net earnings (in
    000s)                       |                          |                          |                        |                       
|As reported                                       | 4,965                    | 398                      | 9,151                  | 3,548                 
|Less fair value of stock
    options to employees | (73)                     | (47)                     | (144)                  | (88)                  
|Pro Forma                                         | 4,892                    | 351                      | 9,007                  | 3,460                 
|Earnings Per Common
    Share ($/share)           |                          |                          |                        |                       
|Basic as Reported                                 | $0.54                    | $0.04                    | $1.00                  | $0.39                 
|Pro Forma                                         | $0.53                    | $0.04                    | $0.98                  | $0.37                 
|Diluted as Reported                               | $0.50                    | $0.04                    | $0.93                  | $0.39                 
|Pro Forma                                         | $0.49                    | $0.04                    | $0.91                  | $0.37                 

> Deferred Financing Charges
>     Deferred financing charges include costs related to the capital
>     lease, due October 1, 2007. These costs are being amortized over the life of the lease.
>     The amounts amortized in the three and six months ended June 30, 2003 were respectively
>     $40,491 and $280,226 (2002  NIL). Deferred financing charges of $192,846 related to
>     a proposed financing transaction were fully amortized as at March 31, 2003.
>     Reconciliation of earnings per share calculations:

|**Three Months Ended June 30, 2003**   |                                    |                                                                 |                                
|-------------------------------------- | ---------------------------------- | --------------------------------------------------------------- | -------------------------------
|                                       | ****
    ****
    **Net Earnings** | **Weighted**
    **Average**
    **Shares**
    **Outstanding** | ****
    ****
    **Per Share**
|Basic                                  | $ 4,965,261                        | 9,205,733                                                       | $0.54                          
|Options and warrants assumed exercised |                                    | 1,008,090                                                       |                                
|Shares assumed purchased               |                                    | (297,032)                                                       |                                
|Diluted                                | $ 4,965,261                        | 9,916,791                                                       | $0.50                          



|**Six Months Ended June 30, 2003**     |                                    |                                                                 |                                
|-------------------------------------- | ---------------------------------- | --------------------------------------------------------------- | -------------------------------
|                                       | ****
    ****
    **Net Earnings** | **Weighted**
    **Average**
    **Shares**
    **Outstanding** | ****
    ****
    **Per Share**
|Basic                                  | $ 9,151,380                        | 9,194,089                                                       | $1.00                          
|Options and warrants assumed exercised |                                    | 1,006,652                                                       |                                
|Shares assumed purchased               |                                    | (323,384)                                                       |                                
|Diluted                                | $ 9,151,380                        | 9,877,357                                                       | $0.93                          

> - 8 -Hedging Contracts
>     In February of 2003 the Company entered into several contracts to
>     deliver 2,000 barrels of oil per day for the period from April 1, 2003 to December 31,
>     2003. The prices and volumes are as follows:

|**Volumes**
    **(in barrels per day)** | **Price**
    **(in US dollars)**
|---------------------------------------- | ---------------------------------
|1,000                                    | US$29.60                         
|250                                      | US$29.71                         
|250                                      | US$29.50                         
|500                                      | US$29.80                         



> Income Taxes
>     The future income tax liability balance has been adjusted as at
>     June 30, 2003 to reflect the recent changes in corporate tax rates. Combined federal and
>     Alberta corporate tax rates are expected to decline from their current level of 42.12% to
>     34.62% by 2007. As a result of these rate changes the future income tax liability was
>     decreased by $2,675,000 in the quarter ended June 30, 2003 with a corresponding offset
>     recorded as a recovery of future income taxes on the statement of earnings.
>     
>     Subsequent Event
>     On August 5, 2003 the Company announced its intention to reorganize
>     into an energy trust structure. The proposed reorganization, subject to shareholder
>     approval, would result in shareholders receiving two trust units for each common share of
>     Enterra. The trusts policy contemplates a monthly distribution level set at
>     approximately 80% of the trusts cash flow. An information circular describing the
>     reorganization is expected to be mailed out to shareholders in October 2003. Closing of
>     the reorganization will be subject to finalization and execution of banking and other
>     transaction documentation and to shareholder, court and applicable regulatory approvals.
>     Distributions are expected to begin in January 2004.
>     - 9 -

SUMMARY CONSOLIDATED FINANCIAL DATA

The following table presents a summary of our consolidated statement of
operations derived from our financial statements for the three and six months ended June
30, 2003 and 2002. The monetary amounts in the table are based on Canadian GAAP. All data
presented below should be read in conjunction with the "Managements Discussion
and Analysis of Financial Condition and Results of Operations" and our financial
statements and accompanying notes included elsewhere in this Form 10-QSB.

Consolidated statements of operations data:

|(In thousands, except per share
    data)  
|--------------------------------------------
|                                            
|                                            
|                                            
|                                            
|Revenue                                     
|                                            
|Royalties, net of ARTC                      
|Production expenses                         
|General and administrative expenses         
|Interest on long-term debt                  
|Amortization of deferred financing charges  
|Depreciation, depletion and site restoration
|                                            
|Earnings from operations                    
|Net earnings for the period ***             
|Basic earnings per share                    

*** includes a gain on redemption of preferred shares of $2.9 million in the three
months ended March 31,

2002 and a future income tax recovery of $2.7 million in the three months ended June
30, 2003.

The following table indicates a summary of our consolidated balance
sheets as of June 30, 2003 and December 31, 2002. The monetary amounts in the table are
based on Canadian GAAP.

Consolidated balance sheet data:

(In thousands)June 30
    December 312003
    2002(Unaudited)C$
    C$Cash
    $ 32
    $ 108Accounts receivable and prepaids
    10,255
    7,971Capital assets
    83,067
    94,354Total assets
    94,435
    102,717Total shareholders equity
    48,080
    38,663




Exchange Rate Information

We publish our consolidated financial statements in Canadian dollars.
In this annual report, except where otherwise indicated, all dollar amounts are stated in
Canadian dollars. References to "$" or "C$" are to Canadian dollars
and references to "US$" are to U.S. dollars. The following table sets forth for
each period indicated the period end exchange rates for conversion of U.S. dollars to
Canadian dollars, the average exchange rates on the last day of each month during such
period and the high and low exchange rates during such period. These rates are based on
the noon buying rate in New York City, expressed in U.S. dollars, for cable transfers in
Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New
York. The exchange rates are presented as Canadian dollars per $1.00.

|                                   | June 30 | June 30 | March 31 | March 31 | Dec 31 
|---------------------------------- | ------- | ------- | -------- | -------- | -------
|                                   | 2003    | 2002    | 2003     | 2002     | 2002   
|End of period                      | 0.74270 | 0.65870 | 0.67970  | 0.62710  | 0.63416
|Average for the three months ended | 0.71609 | 0.64368 | 0.66211  | 0.62738  | N/A    
|High during the three months ended | 0.75120 | 0.66530 | 0.68570  | 0.63550  | N/A    
|Low during the three months ended  | 0.66900 | 0.62390 | 0.63270  | 0.61750  | N/A    
|Average for the six months ended   | 0.68925 | 0.63557 | N/A      | N/A      | N/A    
|High during the six months ended   | 0.75120 | 0.66530 | N/A      | N/A      | N/A    
|Low during the six months ended    | 0.63270 | 0.61750 | N/A      | N/A      | N/A    





















ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our results of operations and financial
condition should be read in conjunction with the financial statements, other financial
information included in this quarterly report and with managements discussion and
analysis contained in the 2002 Annual Report and Form 10-KSB. The statements that relate
to matters that are not historical facts are "forward-looking statements". Words
such as "anticipate", "believe", "expect", "plan",
"intend", "estimate", "project", "will",
"should" "could", "may", "predict" and similar
expressions are intended to identify forward-looking statements. Future events and actual
results may differ materially from the results set forth in or implied in the
forward-looking statements. Factors that might cause such a difference such as those
discussed under "Risk factors" and elsewhere, include:

> fluctuations in worldwide prices of oil and natural gas and demand for oil and natural
>       gas;
>     fluctuations in levels of oil and gas exploration and development activities;
>     the existence of competitors, technological changes and developments in the industry;
>     the existence of operating risks and hazards inherent in the industry, such as blowouts,
>       oil spills, fires, adverse weather, natural disasters, injury to third parties, oil spills
>       and other environmental damages;
>     the existence of regulatory uncertainties;
>     possible insufficient liquidity to meet the Companys expansion plans; and
>     general economic conditions.

The following discussion is to inform you about our financial
conditions, liquidity and capital resources as of June 30, 2003 and December 31, 2002 and
the results of operations for the three and six months ended June 30, 2003 and 2002. The
information is expressed in Canadian dollars

Cash flow, expressed before changes in non-cash working capital, is
used by the Company to measure and evaluate operating performance and liquidity. Earnings
from operations, which is calculated before income taxes and before gains or losses on
disposal of assets, is used by the Company to measure and evaluate operating performance.
Cash flow and earnings from operations do not have any standardized meaning prescribed by
the Canadian Generally Accepted Accounting Principles ("GAAP") and therefore may
not be comparable with the calculation of similar measures for other companies.

Three and Six Months Ended June 30, 2003 Compared to Three and Six Months Ended June
30, 2002

Financial Condition, Liquidity and Capital Resources

At June 30, 2003 Enterras working capital was a deficit of $16.7
million (December 31, 2002 - $38.0 million). Included as part of current liabilities at
June 30, 2003 is bank debt of $19.5 million (December 31, 2002 - $24.4 million). The
classification of our bank debt as a current liability is the result of Canadian
accounting rules which came into effect January 1, 2002. These rules specify that all
borrowings where, among other things, the lender has a right to demand repayment within 12
months (which is the case with our revolving production facility) are to be classified as
current liabilities. We are not subject to principal repayments under our banking
arrangement. Other than in the event of a default or a breach of covenants, the Company
does not expect any principal payments in 2003.



Cash flow from operations for the three months ended June 30, 2003 was
$8.7 million (2002 - $2.2 million) for a 286% increase. Cash flow from operations for the
six months ended June 30, 2003 was $21.4 million (2002 - $4.7 million) for a 357%
increase. The 2003 cash flow was higher because of higher production ( 5,002 boe/day
average production for the three months ended June 30, 2003 compared to 1,881 boe/day in
2002 and 5,090 boe/day average production for the six months ended June 30, 2003 compared
to 2,150 boe/day in 2002), higher prices (up 38% for the three months ended June 30, 2003
and 81% for the six months ended June 30, 2002) .

Financing Activities

Enterras ability to maintain and grow its operating income and
cash flow is dependent upon continued capital spending to replace depleting assets.
Enterra believes its future cash flow from operations, borrowing capacity and future
equity issues should be sufficient to fund capital expenditures and to service debt.
However, our ability to raise additional funds at all, or to do so on acceptable terms,
depends largely on factors beyond our control, such as world prices for oil and gas,
prevailing interest rates and general economic conditions.

Enterras bank debt at June 30, 2003 was $19.5 million (December
31, 2002 - $24.4 million). Our bank debt is used to acquire capital assets and support
ongoing operations. At June 30, 2003 Enterras bank facility consisted of a line of
credit of $36 million (December 31, 2002 - $26.7 million) of which $19.5 million was drawn
(December 31, 2002 - $24.4 million). Interest on amounts drawn is based on the banks
prime rate plus 0.25%.

Security is provided by a first charge over all of the Companys
assets. While the loan is repayable on demand, Enterra is not subject to scheduled
repayments. The lender has advised the Company that, subject to annual review of the
borrowing base and the Company continuing to comply with the terms of the loan agreement,
no payments will be required in 2003.

At June 30, 2003 the Company had 9,241,836 common shares outstanding
(December 31, 2002  9,176,325).

During the first six months of 2003 the Company sold several non-core
properties for net proceeds of $15.6 million, which were used to reduce our bank debt and
to reduce our working capital deficit.

The Company has approximately $45 million in tax pools available at
June 30, 2003 (December 31, 2002 - $63 million).

The bank debt to equity ratio at June 30, 2003 was 0.41 to 1 (December
31, 2002  0.63 to 1).



Investing Activities

The timing of most of Enterras capital expenditures is
discretionary. Enterra has no material long-term commitments associated with its capital
expenditure plans or operating agreements. Consequently, the Company has a significant
degree of flexibility to adjust the level of such expenditures as circumstances warrant.
The level of capital expenditures will vary in future periods depending on the success we
experience on planned drilling activities, oil and gas price conditions and other related
economic factors.

Capital expenditures for the three and six months ended March 31, 2003
were $8.3 million and $15.4 million respectively (June 30, 2002 - $2.8 million and $5.6
million).



- 13 -

The Company drilled 13 wells in the quarter and one well in the second
quarter, resulting in 9 (9.0 net) oil wells and 3 (1.5 net) gas wells, for a success rate
of 91% on a net basis.

Proceeds on disposal of oil and gas properties were $15.6 million
during the first six months of 2003. These proceeds were applied to reduce bank debt and
improve working capital.



Results of Operations

The following discussion of our results of operations and financial
condition should be read in conjunction with the financial statements, other financial
information included in this quarterly report and with managements discussion and
analysis contained in the 2002 Annual Report. The following discussion is to inform you
about our financial conditions, liquidity and capital resources as of June 30, 2003 and
the results of operations for the three and six months ended June 30, 2003 and 2002.

Earnings were $5.0 million for the three months ended June 30, 2003
(2002 - $398,000) for an increase of 1,146%. Earnings for the six months ended June 30,
2003 were $9.2 million (2002 - $3.5 million) for a 158% increase. The 2002 earnings
include a $2.9 million gain on redemption of preferred shares. Enterra redeemed 6,123,870
of its Series 1 preferred shares with a face redemption price of $5,205,290 for $2.3
million, resulting in a gain of $2.9 million. Without this gain, earnings for the six
months ended June 30, 2002 would have been $643,000. The 2003 earnings include a $2.7
million future income tax adjustment. Without this adjustment, earnings for the three and
six months ended June 30, 2003 would have been respectively $2.3 million and $6.5 million.

Earnings per share for the three months ended June 30, 2003 were $0.54
(2002 - $0.04) and $1.00 for the six months ended June 30, 2003 (2002 - $0.39). Cash flow
per share for the three months ended June 30, 2003 was $0.94 (2002 - $0.24) and $2.32 for
the six months ended June 30, 2003 (2002 - $0.51). The weighted average number of shares
outstanding for the three months ended June 30, 2003 was 9,205,733 and six months ended
June 30, 2003 was 9,194,089 (2002  9,150,622 for three months and six months).
Without the gain on redemption of preferred shares, the earnings per share for the six
months ended June 30, 2002 would have been $0.07. Without the future income tax adjustment
in 2003, the earnings per share for the three and six months ended June 30, 2003 would
have been $0.25 and $0.70 respectively.

Cash flow from operations for the three months ended June 30, 2003 was
$8.7 million (2002 - $2.2 million) for a 290% increase. Cash flow from operations for the
six months ended June 30, 2003 was $21.4 million (2002 - $4.7 million) for a 355%
increase. The 2003 cash flow increased due to higher production volumes, stronger
commodity prices and lower operating costs in 2003 compared to 2002.



> 

Production volumes for the three months ended June 30, 2003 were 5,002
boe/day (2002  1,881 boe/day) for a 166% increase. Production volumes for the six
months ended June 30, 2003 were 5,090 boe/day (2002  2,150 boe/day) for a 137%
increase. The development of the Clair property is the main reason behind the higher
production volumes.



- 14 -

Average oil prices increased by 46% during the first half of 2003 and
average gas prices increased by 96% over the same period compared to their respective 2002
levels. The Company received an average of $43.90 per barrel for its oil production during
the six months ended June 30, 2003, compared with $29.98 in 2002. The Company received an
average of $7.59 per mcf for its natural gas production during the six months ended June
30, 2003, compared with $3.71 in 2002. As a result, Enterras revenue per boe
increased by $16.58 (or 61%) per boe in the first half of 2003 compared to 2002.

Royalties for the three months ended June 30, 2003 were $5.3 million
(2002 - $0.8 million) and $10.2 million for the six months ended June 30, 2003 (2002 -
$1.6 million). As a percentage of oil and gas revenues, royalties were 29% for the three
months ended June 30, 2003 (2002  16%) and 25% for the six months ended June 30,
2003 (2002  15%). The increase in royalties is due to higher commodity prices and a
decrease, as a percentage of royalties, of the Alberta Royalty Tax Credit.

Operating expenses for the three months ended June 30, 2003 were $3.1
million (2002 - $1.0 million) and $6.1 million for the six months ended June 30, 2003
(2002 - $2.8 million). On a barrel of oil equivalent basis, operating costs for the three
months ended June 30, 2003 were $6.90 (2002 - $6.12) and $6.67 for the six months ended
June 30, 2003 (2002 - $7.11). Operating costs are expected to decrease over the next
quarters with the construction of a pipeline to transport oil from the Clair property.
This pipeline connection will significantly reduce operating costs by eliminating trucking
and terminal charges. The pipeline is scheduled to be in operation before the end of the
third quarter.

General and administrative expenses for the three months ended June 30,
2003 were $0.8 million (2002 - $0.6 million) and $1.6 million for the six months ended
June 30, 2003 (2002 - $0.8 million). On a barrel of oil equivalent basis, administrative
costs were $1.85 for the three months ended June 30, 2003 (2002 - $3.21) and $1.70 for the
six months ended June 30, 2003 (2002 - $2.05). The Companys goal is to keep general
and administrative expenses at a level between $1.00 and $1.50 per boe for 2003.

Interest expense for the three months ended June 30, 2003 was $0.47
million (2002 - $0.23 million) and $0.96 million for the six months ended June 30, 2003
(2002 - $0.44 million). The increase in interest expense is due to higher debt levels in
2003, including bank debt, capital leases and vendor financing arrangements. Included in
interest expense in the three and six months ended June 30, 2003 were respectively $11,388
and $23,368 (2002  NIL) of dividends paid to the preferred shareholders.

Depletion and depreciation for the three months ended June 30, 2003 was
$6.0 million (2002 - $1.8 million) and $11.4 million for the six months ended June 30,
2003 (2002 - $4.1 million). The increase reflects the higher cost base of our capital
assets in 2003 and increased production volumes. The Company also amortized $0.3 million
in deferred financing charges during the six months ended June 30, 2003 (2002  NIL)
related to a proposed financing transaction. These costs were fully amortized by March 31,
2003.



- 15 -

Current income tax expense for the three months ended June 30, 2003 was
$30,000 (2002 - $33,000) and future income tax for the three months ended June 30, 2003
was a $2.3 million recovery (2002  $189,000). The same categories for the six months
ended June 30, 2003 are $60 thousand and $0.68 million (2002 - $66,000 and $238,000). The
2002 income tax expense was low because the 2003 earnings of $3.9 million included a
non-taxable gain on redemption of preferred shares of $2.9 million. This gain was excluded
from the 2002 tax calculation as it is not subject to income tax. The 2003 future income
tax expense includes a $2.7 million adjustment to reflect the reduction in corporate
income tax rates from 42.12% in 2003 to 34.62% by 2007. The future income tax liability
balance has been adjusted as at June 30, 2003 to reflect the recent changes in corporate
tax rates. Combined federal and Alberta corporate tax rates are expected to decline from
their current level of 42.12% to 34.62% by 2007. As a result of these rate changes the
future income tax liability was decreased by $2,675,000 in the quarter ended June 30, 2003
with a corresponding offset recorded as a recovery of future income taxes on the statement
of earnings. For reporting under US GAAP the tax rate adjustment will not be recorded in
the financial statements until such time as the income tax legislation is formally into
law.

The Company had 9,241,836 common shares outstanding at June 30, 2003
(December 31, 2002 - 9,150,622).

Liquidity and capital resources

Enterras bank facility consists of a line of credit of $36
million (December 31, 2002 - $26.7 million) of which $19.5 million was drawn (December 31,
2002 - $24.4 million). Interest on amounts drawn is based on the banks prime rate
plus 0.25%.

In the second quarter of 2003, the Company sold some non-core
properties for proceeds of $0.6 million, which combined with the first quarter
dispositions results in net proceeds for the first six months of 2003 of $15.6 million.
Proceeds from this sale were used to reduce bank debt and to fund ongoing capital
requirements.

The Company is not currently taxable and has approximately $45 million
in tax pools available at June 30, 2003 (December 31, 2002 - $63 million).

Capital expenditures for the three months period ended June 30, 2003
were $8.3 million (June 30, 2002 - $2.8 million). Capital expenditures for the six months
ended June 30, 2003 were $15.4 million (June 30, 2002 - $5.6 million). The Company drilled
13 well in the first quarter and 1 well in the second quarter resulting in nine oil wells
(9.0 net) and three gas wells (1.5 net) for a success ratio of 91% on a net basis.
Drilling activity is typically at its lowest level in the second quarter because of spring
breakup when movement of heavy equipment such as drilling rigs is restricted due to
potential damage to the roads as the ground thaws. As a result, drilling of new wells was
minimal during the second quarter. The Company focused instead on setting up the
waterflood program at Clair and upgrading equipment and pumps at its Sounding Lake
property. The Company expects to resume its drilling activity in the next two quarters of
2003 by focusing its efforts in the Clair and Sylvan Lake areas.



Stock based compensation

Effective January 1, 2002 the Company prospectively adopted the new
recommendations of the CICA with respect to the accounting for stock-based compensation
and other stock-based payments. In accordance with the new standard, the Company elected
to continue its policy that no compensation is recorded on the grant of employee stock
options and consideration paid on the exercise of such options is recorded as share
capital. In addition, the new standard requires a fair value based method of accounting
for other stock-based payments. Had compensation expense for the Companys
stock-based compensation plan been determined based on the fair value at the grant dates
for awards under the plan after January 1, 2002, the Companys net income and
earnings per share would not have been materially different than those reported.



- 16 -

Share Capital

**Number of**
    **common shares**
    **Amount**Balance, December 31, 2002
    9,176,325
    $ 29,665,075Issued on exercise of options
    65,511
    265,552Balance, June 30, 2003
    9,241,836
    $ 29,930,627


**Number of**
    **Options**
    **Weighted-average exercise price**Outstanding at December 31, 2002
    871,703
    $4.35Options granted
    10,000
    $13.74Options exercised
    (65,511)
    ($4.05)Options cancelled
    (3,750)
    ($4.00)Outstanding at June 30, 2003
    812,442
    $4.49


On March 28, 2002 the Company agreed to issue 300,000 share purchase
warrants to an arms length U.S.-based consulting firm in connection with a potential
debt financing in the United States. The warrants are to have a two-year term and are
subject to different pricing (100,000 warrants at US$2.60, 100,000 at US$3.30 and 100,000
at US$4.00). The US$2.60 warrants are to vest upon the execution of a non-binding letter
of intent relating to the proposed financing. The US$3.30 and US$4.00 warrants are to vest
only on the successful closing and funding of the proposed financing. A value of $125,000
was assigned to the 100,000 warrants at US$2.60. This value was determined using the Black
Scholes Option Pricing model using an interest rate of 5% and a volatility factor of 50%.
The $125,000 was credited to the Companys contributed surplus account in 2002.



Hedging Contracts

During the first quarter of 2003 the Company entered into several
contracts to deliver 2,000 barrels of oil per day for the period April 1, 2003 and
December 31, 2003. The prices and volumes are as follows:

**Volumes (in barrels
    per day)**
    **Price (in US
    dollars)**1,000
    US$29.60250
    US$29.71250
    US$29.50500
    US$29.80




New Accounting Pronouncements

In February 2003, the Canadian Institute of Chartered Accountants (CICA) issued
Accounting Guideline 14, "Disclosure of Guarantees" (AcG-14). AcG-14 elaborates
on the disclosures required with respect to any obligations as a result of issuing
guarantees. The disclosure requirements are effective for interim and annual periods
beginning on or after January 1, 2003. FASB Interpretation No. 45, "Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others", is the US equivalent of AcG-14. Enterra did not have any
guarantees outstanding at December 31, 2002 or June 30, 2003.



- 17 -

Factors That May Affect Future Results

This report may contain forward-looking statements and other
prospective information relating to future events. These forward-looking statements and
other information are subject to certain risks and uncertainties that could cause results
to differ materially from historical or anticipated results, including the following:

We have a working capital deficiency at June 30, 2003; our Credit facilities can be
called at any time.

At June 30, 2003, we had a working capital deficiency of $16.7 million,
which means our current liabilities exceeded our current assets by that amount. Our credit
facilities are all on a demand basis and, although we are not subject to principal
repayments under our current banking arrangement, they could be called for repayment at
any time. Other than in the event of a default or a breach of covenants, the Company does
not expect any principal payments in 2003.

Our assets are highly leveraged.

We have incurred a high amount of debt relative to our assets. A
decrease in the amount of our production or the price we receive for it could make it
difficult for us to service our loan or may cause the bank that issued our loan to
determine that our assets are insufficient security for our bank debt.

Our operations are subject to numerous risks of crude oil and natural
gas drilling and production activities.

Crude oil and natural gas drilling and production activities are
subject to numerous risks, many of which are beyond our control. These risks include the
following:

> that no commercially productive crude oil or natural gas reservoirs
>       will be found;
>     that crude oil and natural gas drilling and production activities may
>       be shortened, delayed or canceled; and
>     that our ability to develop, produce and market our reserves may be
>       limited by:title problems,
>         weather conditions,
>         compliance with governmental requirements, and
>         mechanical difficulties or shortages or delays in the delivery of
>           drilling rigs and other equipment.

In the past, we have had difficulty securing drilling equipment in
certain of our core areas. We cannot assure you that the new wells we drill will be
productive or that we will recover all or any portion of our investment. Drilling for
crude oil and natural gas may be unprofitable. Dry wells and wells that are productive but
do not produce sufficient net revenues after drilling, operating and other costs are
unprofitable. In addition, our properties may be susceptible to hydrocarbon draining from
production by other operations on adjacent properties.



- 18 -

Our industry also experiences numerous operating risks. These operating
risks include the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured
formations and environmental hazards. Environmental hazards include oil spills, gas leaks,
ruptures or discharges of toxic gases. If any of these industry operating risks occur, we
could have substantial losses. Substantial losses also may result from injury or loss of
life, severe damage to or destruction of property, clean-up responsibilities, regulatory
investigation and penalties and suspension of operations. In accordance with industry
practice, we maintain insurance against some, but not all, of the risks described above.
We cannot assure you that our insurance will be adequate to cover losses or liabilities.
Also, we cannot predict the continued availability of insurance at premium levels that
justify its purchase.

We operate in a highly competitive industry which may adversely affect
our operations.

We operate in a highly competitive environment. Competition is
particularly intense with respect to the acquisition of desirable undeveloped crude oil
and natural gas properties. The principal competitive factors in the acquisition of such
undeveloped crude oil and natural gas properties include the staff and data necessary to
identify, investigate and purchase such properties, and the financial resources necessary
to acquire and develop such properties. We compete with major and independent crude oil
and natural gas companies for properties and the equipment and labor required to develop
and operate such properties. Many of these competitors have financial and other resources
substantially greater than ours.

The principal resources necessary for the exploration and production of
crude oil and natural gas are leasehold prospects under which crude oil and natural gas
reserves may be discovered, drilling rigs and related equipment to explore for such
reserves and knowledgeable personnel to conduct all phases of crude oil and natural gas
operations. We must compete for such resources with both major crude oil and natural gas
companies and independent operators. Although we believe our current operating and
financial resources are adequate to preclude any significant disruption of our operations
in the immediate future we cannot assure you that such materials and resources will be
available to us.

Our ability to replace production with new reserves is highly dependent
on acquisitions or successful development and exploration activities.

The rate of production from crude oil and natural gas properties
declines as reserves are depleted. Our proved reserves will decline as reserves are
produced unless we acquire additional properties containing proved reserves, conduct
successful exploration and development activities or, through engineering studies,
identify additional behind-pipe zones or secondary recovery reserves. Our future crude oil
and natural gas production is therefore highly dependent upon our level of success in
acquiring or finding additional reserves. We cannot assure you that our exploration and
development activities will result in increases in reserves. Our operations may be
curtailed, delayed or cancelled if we lack necessary capital and by other factors, such as
title problems, weather, compliance with governmental regulations, mechanical problems or
shortages or delays in the delivery of equipment. Our ability to continue to acquire
producing properties or companies that own such properties assumes that major integrated
oil companies and independent oil companies will continue to divest many of their crude
oil and natural gas properties. We cannot assure you that such divestitures will continue
or that we will be able to acquire such properties at acceptable prices or develop
additional reserves in the future.



- 19 -

Crude oil and natural gas price declines and volatility could adversely
affect our revenue, cash flows and profitability.

Our revenue, profitability and future rate of growth depend
substantially upon prevailing prices for crude oil and natural gas. Crude oil and natural
gas prices fluctuate and until recently have declined significantly. Prices also affect
the amount of cash flow available for capital expenditures and our ability to borrow money
or raise additional capital. In 1998 and 1999, we reduced our capital expenditures budget
because of lower crude oil and natural gas prices. In addition, we may have ceiling test
write-downs when prices decline. At December 31, 2001 the Company would have realized a
U.S. GAAP ceiling test write-down of C$17.5 million (after tax). Lower prices may also
reduce the amount of crude oil and natural gas that we can produce economically.

We may enter into hedge agreements and other financial arrangements at
various times to attempt to minimize the effect of crude oil and natural gas price
fluctuations. We cannot assure you that such transactions will reduce risk or minimize the
effect of any decline in crude oil or natural gas prices. Any substantial or extended
decline in crude oil or natural gas prices would have a material adverse effect on our
business and financial results. Hedging activities may limit the risk of declines in
prices, but such arrangements may also limit additional revenues from price increases.

Lower crude oil and natural gas prices increase the risk of ceiling
limitation write-downs.

The Company uses the "full cost" method of accounting for
petroleum and natural gas properties. All costs related to the exploration for and the
development of oil and gas reserves are capitalized into a single cost centre representing
the Companys activity which is undertaken exclusively in Canada. Costs capitalized
include land acquisition costs, geological and geophysical expenditures, lease rentals on
undeveloped properties and costs of drilling productive and non-productive wells. Proceeds
from the disposal of properties are applied as a reduction of cost without recognition of
a gain or loss except where such disposals would result in a major change in the depletion
rate. Capitalized costs are depleted and depreciated using the unit-of-production method
based on the estimated gross proven oil and natural gas reserves before royalties as
determined by independent engineers. Units of natural gas are converted into barrels of
equivalents on a relative energy content basis. Capitalized costs, net of accumulated
depletion and depreciation, are limited to estimated future net revenues from proven
reserves, based on year-end prices, undiscounted, less estimated future abandonment and
site restoration costs, general and administrative expenses, financing costs and income
taxes. Estimated future abandonment and site restoration costs are provided for over the
life of proven reserves on a unit-of-production basis. The annual charge is included in
depletion and depreciation expense and actual abandonment and site restoration costs are
charged to the provision as incurred. The amounts recorded for depletion and depreciation
and the provision for future abandonment and site restoration costs are based on estimates
of proven reserves and future costs. The recoverable value of capital assets is based on a
number of factors including the estimated proven reserves and future costs. By their
nature, these estimates are subject to measurement uncertainty and the impact on financial
statements of future periods could be material.

The Company performs a cost recovery ceiling test which limits net
capitalized costs to the undiscounted estimated future net revenue from proven oil and gas
reserves plus the cost of unproven properties less impairment, using year-end prices or
average prices in that year, if appropriate. In addition, the value is further limited by
including financing costs, administration expenses, future abandonment and site
restoration costs and income taxes. Under U.S. GAAP, companies using the "full
cost" method of accounting for oil and gas producing activities perform a ceiling
test using discounted estimated future net revenue from proven oil and gas reserves using
a discount factor of 10%. Prices used in the U.S. GAAP ceiling tests performed for this
reconciliation were those in effect at the applicable year-end. Financing and
administration costs are excluded from the calculation under U.S. GAAP.



- 20 -

The risk that the Company will be required to write down the carrying
value of crude oil and natural gas properties increases when crude oil and natural gas
prices are low or volatile. The Company may experience additional ceiling test write-downs
in the future.

We may undertake acquisitions that could limit our ability to manage
and maintain our business, result in adverse accounting treatment and are difficult to
integrate into our business.

A component of future growth will depend on the ability to identify,
negotiate, and acquire additional companies and assets that complement or expand existing
operations. However we may be unable to complete any acquisitions, or any acquisitions we
may complete may not enhance our business. Any acquisitions could subject us to a number
of risks, including:

> diversion of management's attention;
>     amortization of substantial goodwill, adversely affecting our
>       reported results of operations;
>     inability to retain the management, key personnel and other employees
>       of the acquired business;
>     inability to establish uniform standards, controls, procedures and
>       policies;
>     inability to retain the acquired company's customers;
>     exposure to legal claims for activities of the acquired business
>       prior to acquisition; and inability to integrate the acquired company and its employees
>       into our organization effectively.

We may be subject to environmental liability claims that could result
in significant costs to us.

We may be subject to claims for damages related to any impact that our
operations have on the environment. An environmental claim could materially adversely
affect our business because of the costs of defending against these types of lawsuits, the
impact on senior management's time and the potential damage to our reputation. Our oil and
gas operations are subject to government regulations and control. Failure to comply with
applicable government rules could restrict our ability to engage in further oil and gas
exploration and development opportunities.

Our revenue is subject to volatile oil and gas prices that could reduce
our revenue and profitability.

The price we receive for oil and gas production is subject to
significant volatility. Our revenue, cash flow and profitability are substantially
dependent on prevailing prices for oil and gas. Historically oil and gas prices and
markets have been volatile and they are likely to continue to be volatile in the future.
Some factors that contribute to volatility include:

> political conditions in the Middle East, the former Soviet Union and
>       other regions;
>     domestic and foreign supplies of oil and gas;
>     the level of consumer demand;
>     weather conditions;
>     domestic and foreign government regulations;
>     the availability and prices of alternative fuels; and
>     overall economic conditions.
>   - 21 -

To counter this volatility from time to time we may enter into
agreements to receive fixed prices on its oil and gas production to offset the risk of
revenue losses if commodity prices decline; however, if commodity prices increase beyond
the levels set in such agreements, We will not benefit from such increases.

As a Canadian oil and gas company, we may be adversely affected by
changes in the exchange rate between U.S. and Canadian dollars.

The price we receive for oil and gas production is expressed in U.S. dollars, which is
the standard for the oil and gas industry worldwide. However, we pay operating expenses,
drilling expenses and general overhead expenses in Canadian dollars. Changes to the
exchange rate between U.S. and Canadian dollars can adversely affect us. When the value of
the U.S. dollar increases, we receive higher revenue and when the value of the U.S. dollar
declines, we receive lower revenue on the same amount of production sold at the same
prices.

We depend on key personnel for critical management decisions and
industry contacts but have no employment contracts or key person insurance.

We are dependent upon the continued services of our management team. We
do not have employment contracts with any of these executives and do not carry key person
insurance on their lives. The loss of the services of our executive officers, through
incapacity or otherwise, could have a material adverse effect on our business and would
require us to seek and retain other qualified personnel.

We have not paid dividends (except to our preferred shareholders), do
not intend to pay dividends in the foreseeable future and are currently restricted from
paying dividends pursuant to the terms of our credit facility and Alberta corporate law.

We have not paid any cash dividends on our common stock and do not
expect to pay any cash or other dividends in the foreseeable future. We have paid
dividends of $11,380 to our preferred shareholders in the quarter ended June 30, 2003 and
$23,368 for the six months ended June 30, 2003. Dividends will be paid to our preferred
shareholders at a rate of $0.85 per share (on an annual basis). This dividend will
decrease over time as the Company is gradually redeeming these preferred shares. At June
30, 2003 there were 677,277 preferred shares outstanding. The terms of our current banking
credit facility prohibit us from declaring and paying dividends except from assets that
are in excess of the required amount of security under our credit facility, and Alberta
corporate law prohibits the payment of dividends unless stated solvency tests are met. The
Companys banker is aware of the dividends being paid to the preferred shareholders
and will allow such payments as long as all our bank covenants are being met.

Our stock is thinly traded and is subject to price volatility.

Trading volume in our common stock has historically been limited.
Accordingly, the trading price of our common stock could be subject to wide fluctuations
in response to quarterly variations in operating results, changes in financial estimates
by securities analysts, an imbalance of purchasers and sellers, or other factors.



- 22 -

ITEM 3. CONTROLS AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer have evaluated our disclosure
controls and procedures. They concluded that our disclosure controls and procedures were
adequate and effective in ensuring that material information relating to the Company is
properly recorded, processed, summarized and reported within the time periods specified in
the SECs rules and forms, and that such information is accumulated and communicated
to allow timely decisions regarding required disclosure.

We currently have in place systems relating to internal controls and procedures with
respect to our financial information. Management reviews and evaluates these internal
control systems on an on-going basis. Based on these evaluations, there were no
significant deficiencies or material weaknesses in these internal controls requiring
corrective actions. As a result, no corrective actions were taken. There have been no
significant changes in these internal controls or in other factors that could
significantly affect these internal controls subsequent to the review and evaluation.



- 23 -





Not Applicable.

ITEM 2. CHANGES IN SECURITIES.

Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

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

Not Applicable

ITEM 5. OTHER INFORMATION.

Not Applicable.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

> Exhibits

|31.1 | Certification of Chief
    Executive Officer (Section 302 certification)  
|---- | --------------------------------------------------------------------------
|31.2 | Certification of Chief Financial Officer
    (Section 302 certification)  
|32   | Certification of Periodic
    FInancial Report (Section 906 Certification)

> Reports on Form 8-K  None
>     
>     - 24 -





Date: August 15, 2003

Enterra Energy Corp.



Luc Chartrand

Chief Financial Officer

(Duly Authorized Officer and Principal

Financial and Accounting Officer)



- 25 -