Quaterra Resources Inc. today reported that a “deep” drilling program has begun at the company’s Arizona uranium project. The current phase of drilling anticipates a total of approximately 3500 metres to be drilled in six to eight deep holes to test six breccia pipe targets. With holes averaging 450 metres deep, the program plans to test the Ollie, EZ 4, EJ and when permits are received, the Rock and Whistler breccia pipes.The first objective of the deep drilling program will be the Ollie pipe, located 10 miles southeast of the Hack Canyon mines that produced 9.5 million pounds of uranium (eU 3 O 8 ). Ollie was the subject of the last deep drilling program conducted by EFN (Energy Fuels Nuclear) before discontinuing operations in 1994 because of low uranium prices. Prematurely halted after completing only six holes, the pipe has remained largely unexplored at the favorable depth for uranium mineralization.

Drilling is also planned to investigate the YS target where 45 metres of vertical structural displacement was defined by shallow drilling. “YS is one of the most attractive targets of the first phase of Quaterra’s drilling on the project,” said company president, Dr.Thomas Patton. He reported that Beeman Drilling Company of Moab , UT has been contracted to implement the drilling program and Geophysical Logging Service of Prescott, Arizona will conduct the down-hole geophysical logging.

Patton noted that Quaterra’s uranium properties in northern Arizona now cover approximately 10 square miles (25.9 square kilometers) over selected areas within the heart of the uranium district. All of the company’s targets are within a few miles of uraniferous breccia pipes. Additional properties are being evaluated for acquisition as the program continues during 2006.

The company also reported completion of an eight hole, 5,894 meter drilling program at its Nieves silver prospect in Zacatecas State, Mexico . Results are expected to be available in the next two to three weeks.

Dr. Thomas Patton is the qualified person responsible for the preparation of this release.

On behalf of the Board of Directors,

“Thomas Patton”
Thomas Patton, President
Quaterra Resources Inc.

Contact Jay Oness at 1-888-456-1112, 604-681-9059 or email: corpdev@mnxltd.com

Statements contained in this news release that are not historical facts are forward-looking statements as the term is defined in the private securities litigation reform act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Quaterra relies upon litigation protection for forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management.