FORM 10-QSB - Quarterly Report Under Section 13 or 15(d)
                 of the Securities Exchange Act of 1934

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

                           FORM 10-QSB

[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the period ended:          March 31, 1999
or
[   ] Transition Report Pursuance to Section 13 or 15(d) of the
Securities Exchange act of 1934.
For the transition period from                   to

Commission File Number                  33-16820-D

                    ARETE INDUSTRIES, INC.
     (Exact name of registrant as specified in its charter)

          Colorado                             84-1063149
 (State or other jurisdiction of            (I.R.S. Employer
   incorporation or organization           Identification No.)

   2305 Canyon Blvd., Suite 103 Boulder, CO            80302
          (Address of principal executive offices)  (Zip Code)

                              (303) 247-1313
        (Registrant's telephone number, including area code)

                       NOT APPLICABLE
          (Former name, former address and former fiscal year,
                 if changed since last report.)

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.

             [ X  ] Yes     [  ] No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Indicated by check mark whether the registrant has filed all
 documents and reports required to be filed by Sections 12,
13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed
by a court.

               [ X ] Yes     [   ] No

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of May 21, 1999, Registrant had 274,615,516 shares
of common stock, No par value, outstanding.

                          INDEX

                                                    Page
                                                  Number

Part I.       Financial Information

Item I.     Financial Statements

Balance Sheet as of March 31, 1999                     2

Statements of Operations, Three Months
  Ended March 31, 1999 and 1998                        3

Statements of Cash Flows, Three Months
  Ended March 31, 1999 and 1998                        4

Notes to Financial Statements                          5

Item 2.     Management's Discussion and Analysis
 of Financial Conditions and Results of Operations     6

Part II.  Other Information                            7


<TABLE>
<CAPTION>
                           ARETE INDUSTRIES, INC.
                                BALANCE SHEET

March 31, 1999
 (Unaudited)
<S>                                                            <C>


Current Assets
     Cash                                                             41,823
     Accounts receivable, net of allowance for
     doubtful accounts of $25,000                               $     20,131
        Total Current Assets                                          61,954

Furniture and equipment, net of accumulated
  depreciation  (Note 2)                                                  -

Prepaid Expenses                                                      19,416

Other Investments                                                     15,000

     Total Assets                                               $     96,370





Current Liabilities

     Accounts payable                                               161,529

     Customer deposits (Note 1e)                                      7,274
     Other accrued expenses                                          210,006

         Total Current Liabilities                                   386,809
     Total Liabilities                                               386,809




Stockholders' (Deficit) Equity:
     Redeemable convertible preferred stock - no par
      -Series A, 3,000 shares issued and outstanding,
     $30,000 face value                                               30,000
     Common stock - No par value,
      500,000,000 shares authorized;
      279,865,516 shares issued and
      outstanding as of 3/31/99     (Note 3)                       7,090,213
     Accumulated deficit                                          (7,320,345)
     Current Period Deficit                                          (82,307)
       Total Stockholders' Equity (Deficit)                         (352,789)

Total Liabilities and Stockholders' (Deficit)                   $     96,370

      The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
                                   ARETE INDUSTRIES, INC.
                                   STATEMENTS OF OPERATIONS

                             For the Three Months Ended March 31,
                                        (Unaudited)
<S>                                             <C>                   <C>


     1999                    1998

Sales  (1c)                                      $    257,484          $     276,706

Cost of goods sold (exclusive of
depreciation shown separately
below)  (1c)                                          226,151                215,948
  Gross Profit                                         (2,101)                60,757

Operating Expenses
Depreciation    (1d)                                        -                 15,782
Bad debts                                                   -                 74,065
Rent                                                   23,765                 21,500
Salaries                                               64,805                 83,722
Other operating expenses                               63,796                113,969
  Total Operating Expenses                            152,366                309,038
Net Operating (Loss)                             $   (154,467)          $   (248,281)

Other Income (Expenses)                                                            -
Interest Income                                           312                      -
Miscellaneous  Income                                       -                      -
Gain on sale of investment                             40,061                     -
Interest (expense)                                     (1,647)                (5,827)
 Total Other                                       $   38,726            $    (5,827)

Net (Loss)                                      $     (82,307)        $     (254,108)

Net (Loss) per Share                                $     nil              $     nil

Weighted Average Shares Outstanding               249,864,804             136,675,873



The accompanying notes are an integral part of the financial statements.
</table.

</TABLE>
<TABLE>
<CAPTION>


                                    ARETE INDUSTRIES, INC.

                                    STATEMENTS OF CASH FLOWS

                               For the Three Months Ended March 31
                                          (Unaudited)


                                                          1999                  1998

<S>                                                   <C>                <C>
Cash Flows from Operating Activities:
Net (loss)                                            $     (82,307)     $    (254,108)
Adjustments to reconcile net
 income (loss) to net cash used
 in operating activities
    Depreciation                                                 -               15,782
    Increase (Decrease) in Prepaid Expenses                (8,437)               (2,763)
    Stock Issued for Services                              54,127               272,335
    Increase (Decrease) in Customer Deposits (Note 1e)     (3,517)              116,539
    Increase (Decrease) in Accounts
     Payable, Accrued Expenses and
     Other                                                 74,073               (93,519)
    (Increase) Decrease in Accounts
     Receivable                                            (5,413)              (40,604)

Net Cash Provided by Operating
 Activities                                                28,526                13,662

Cash Flows from Investing Activities                            -                     -

Cash Flows from Financing Activities:
   Repayment of Note Payable and Advances                 (48,800)                   -
   Proceeds from Issuance of Common Stock                  42,050                    -

Net Cash (Used by) Financing
 Activities                                                (6,750)                   -

Increase (Decrease) in cash                                12,776               13,662

Cash, beginning of period                                  20,047               (1,464)

Cash, end of period                                 $      41,823          $     12,198

Interest paid                                       $       1,647          $      5,287

Income taxes paid                                   $           -          $         -

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

</TABLE>

                         ARETE INDUSTRIES, INC.
                     NOTES TO FINANCIAL STATEMENTS

                              March 31, 1999
                                (Unaudited)





(1) Summary of Significant Accounting Policies


 (a)     Condensed Financial Statements

The financial statements included herein have been prepared by
Management of Arete Industries, Inc. without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and management believes that
the disclosures are adequate to make the information presented not
misleading.

The management of Arete Industries, Inc. believes that the
accompanying unaudited condensed financial statements contain all
adjustments (including normal recurring adjustments) necessary to
present fairly the operations and cash flows for the periods
presented.

     (b)     Change in Fiscal Year End.

Effective the period ended December 31, 1998, the Company changed
its fiscal year end to December 31, from March 31.

     (c)      Revenue Recognition.

The Company recognizes revenue when goods are shipped and/or
 services are provided and when expenses are incurred. Prior
 period financial statements include a reclassification of
postage expenses from cost of goods sold to a reduction of
sales to be consistent with the presentation for the period
 ended March 31, 1999.

     (d)      Furniture and Equipment.

A majority of the Company's operating equipment has been
either liquidated or relocated to Denver, Colorado during
the current period.  The Company's equipment is being carried
at a fully depreciated value, or zero at this time, due to
 this equipment being held after the end of its depreciable
life.

     (e)     Reclassification of Certain Liability.

Following the end of the second quarter of fye 12/31/98,
the Company reclassified certain Current Liabilities to
Current Liabilities - Customer Deposits to account for
advance customer payments received for services which
were held pending completion of work as of the end
of the reporting period.

     (f)     Basis of Presentation - Going Concern

The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles,
which contemplates continuation of the Company as a going concern.
  However, the Company has sustained recurring operating losses,
has a net capital deficiency, and is delinquent on certain payroll
taxes and on payment of creditor liabilities pursuant to its
Chapter 11 plan of reorganization. In view of these matters,
 realization of certain of the assets in the accompanying
balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability
to meet its financing requirements, raise additional capital,
and the success of its future operations.  Management believes
that actions planned and presently being taken to revise the
Company's operating and financial requirements provide the
opportunity for the Company to continue as a going concern.

(2)     Recent Sale of Assets.

The Company sold a substantial portion of its operating assets
and office furnishings as a part of the move of operations into
facilities of SourceOne Worldwide, LLC.  for $40,061 recorded as
a long term gain from sale of equipment.  The balance of operating
assets are at the end of their depreciable lives, are fully
depreciated and are carried at $0 book value.


(3)      Common Stock Issued

During the three month period ended March 31, 1999, 8,262,500
common shares were issued to officers and employees for direct
compensation including 4,625,000 to the CEO and 937,500 to the
CFO for unpaid and accrued salary/management fees accrued during
 fye 12/31/98.  Included in this number was 1.5 million shares
issued to the General Manager of Aggression Sports, Inc. booked
as an advance to Aggression Sports.  Also, 200,000 shares were
issued to a departing employee as severance pay. Also,
1,000,000 common shares were issued during the period to
 the Company's bookkeeper/accountant in Omaha Nebraska
for services rendered during previous periods.

During the same period, 21,136,842 shares were issued on
conversion of the balance of Class B Preferred Stock, and
8,500,000 shares were issued in a private placement for cash.
The Company cancelled 6,750,000 shares during the period
including 5,000,000 shares originally issued as an incentive
 to the Company's General Manager in Council Bluffs and the
 balance for cancellation of consulting agreements.

(4)     Preferred Stock.

During the period ended March 31, 1999, 3,000 shares or
$30,000 in face value of Class A Preferred shares were
issued to the Company's CEO and CFO in payment of deferred
 salary.  Also, 21,136,842 shares of Class B Preferred were
 converted to common stock and cancelled.  This cancellation
 retired the entire class of Class B Preferred and the
$528,421 in capital associated with the Class B Preferred
was converted into Common.


ITEM 2

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL
CONDITION AND RESULTS OF OPERATIONS



Arete Industries, Inc. (the "Company") was organized as a Colorado
corporation on June 21, 1987 under the name Travis Investments, Inc.
The Company is in the business of printing advertising materials and
coupons and mailing them to its customers.  During 1995, the Company
filed a plan of reorganization which was approved by the United
States Bankruptcy Court.  The Company emerged from its Chapter 11
bankruptcy with its coop coupon franchise business intact along with
a small captive coupon printing and mailing operation located in
Council Bluffs, Iowa.

During the current period, the Company closed its Council Bluffs
operations and moved them to Denver, Colorado in a space leased from
SourceOne Worldwide, LLC. pursuant to a Joint Venture Agreement
between the Company and SourceOne.  The Company now outsources all
its printing and mailing services to SourceOne, which outsourcing is
contemplated to be transferred to a jointly owned company
contemplated to be formed in the near future.

The Company generated operating revenues of approximately $257,484
with cost of goods sold of $226,151 (or 88% of sales) during the
quarter ended March 31, 1999.  This is compared to operating
revenues of $276,706 and cost of goods sold of approximately
$215,948 (or 78% of sales) during the quarter ended March 31, 1998.
These increases are mainly attributable to the transitional expenses
incurred during the move to SourceOne including severance and
incentive pay to operating employees, moving expenses and start-up
costs. Operating expenses of approximately $152,366 (or 59% of
sales) were incurred during the quarter ended March 31, 1999,
compared to $309,038 (or 112% of sales) in the quarter ended March
31, 1998.  The Company had a net loss of $82,037 (or 32% of sales)
during the quarter ended March 31, 1999.  With respect to the loss,
when adjusting for certain non-recurring items, the loss is $122,680
(or 48% of sales) as compared to a net loss of $254,108 (or 92% of
sales) during the 3 month period ending March 31, 1998.  Management
anticipates that for the next several months the significant amount
of operating losses eliminated by the outsourcing agreement will be
diminished in part by losses incurred in adjusting to the new
operating environment  and because for the time being, SourceOne is
operating with less efficient equipment than was used in Council
Bluffs.  Otherwise, management believes that this move will greatly
enhance efficiencies and improve cash flow as well as allow the
Company to accumulate working capital to fund growth of its current
business and expand into other more profitable lines of business.

The Company had liabilities in excess of assets at March 31, 1999 of
$282,439.

At March 31, 1999, the Company had no material commitments for
capital expenditures.

                      PART II. OTHER INFORMATION


Item 1.     Legal Proceedings.

During the period ended March 31, 1999, there were no material legal
proceedings initiated by or against the Company or any of its
officers, directors or subsidiaries.

Item 2.     Changes in Securities

(a)  As of approximately March 26, 1999 all 28,400,000 outstanding
shares of Class B Preferred Stock had been converted into a like
number of common shares at a revised conversion price of $0.0025 per
share.  This price was renegotiated from $0.125 per share as an
incentive to the holder to invest $100,000 into the Company for
17,000,000 shares of Common Stock.  On September 1, 1998 pursuant to
amendments to the Articles of Incorporation approved by shareholders
on such date, common shares of the Registrant were converted from
shares with par value to shares without par value.  These two events
allowed stated capital and paid in capital to be combined into a
single amount for all outstanding securities as of 12/31/98.  In
October, 1998, the Board of Directors approved a new class of
preferred shares, the "Class A Convertible Preferred" shares which
are redeemable, convertible into common shares at a discount to
market and have a liquidation preference as well as super voting
rights on default of payment of dividends.  The Certificate of
Designation of the Class A Preferred has been filed with the
Colorado Secretary of State and is incorporated herein by reference.
Other than the impact on accounting for capital of the Registrant,
there is no material impact on the rights of holders of such
securities.

(b) Not Applicable.

(c) Item 701 Reg. SB.

During the period covered by this report, the Company sold 8,500,000
shares to a non affiliated party for $50,000 cash in a private
transaction under Rule 504 of Regulation D promulgated by the
Securities and Exchange Commission.  The Company also converted
21,136,842 shares of Class B Preferred Stock for unaffiliated
parties into a like number of common shares.  The Conversion Shares
were issued under the general exemption of Section 4(2) as
conversion of an outstanding security and were free trading under
Rule 144(k).

Item 3.     Defaults upon Senior Securities

None.

Item 4.     Submission of Matters to a Vote of Security Holders

No meetings of shareholders or actions by consent were taken during
the period ended March 31, 1999.  An Annual Meeting of Shareholders
is scheduled for June 11, 1999


Item 5.     Other Information.  Effective April 20, 1999, Mr. Fred
Boethling and Mr. Steven E. Reichert resigned as officers and
directors of the Company, due to personal and professional
employment reasons.  There have been no substitute directors located
and the board of directors have been reduced to three members
pending recruitment of at least two additional members.  Messrs
Raabe, Talbot and Gorman have agreed to stand for reelection as
directors at the upcoming annual meeting of shareholders.

None.

Item 6.     Exhibits and Reports on Form 8-K

The following exhibits are attached:

There were no Reports on Form 8-K filed during the period covered by
this report.

                             SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                         ARETE INDUSTRIES, INC.



Date: May 21, 1999               By:  /s/  Thomas P. Raabe, CEO
                                  Principal Executive Officer,
                                  Principal Financial and Accounting
                                  Officer