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   Quaterra Resources Inc.: Correspondence - Filed by newsfilecorp.com

September 26, 2012

SENT BY COURIER

Division of Corporation Finance
U.S. Securities &
Exchange Commission
100 F Street, NE
Washington, D.C. 20549

Attention: Tia L. Jenkins
Senior Assistant Chief Accountant

Office of Beverages, Apparel and Mining

    Re: Quaterra
      Resources Inc. – Form 40-F for Fiscal Year Ended December 31, 2011 Filed March 30, 2012 File No. 001-33965

Dear Sirs:

I have been asked to reply to your letter of September 18,
2012. As requested, our response will be partially in narrative form herein and
included in an amended AIF to be annexed to a revised Form 40F when all issues
have been settled. We expect that the response will be completed within the time
limited in your letter but request your forbearance in allowing minimal
additional time if the exchange of correspondence is not completed within the
stated ten business days.

In reference to the noted items we advise:

Form 40-F for Fiscal Year Ended December 31,
2011

Exhibit 99.1

Annual Information Form

Mineral Resource Estimate, page
20

    1.

We note your disclosure of resource estimates below your
current economic cutoff grade in this section of your filing. Mineral resources
must have reasonable prospects for economic extraction for both operating mines
and undeveloped properties with the reportable resources delimited using an
economically based cutoff to segregate resources from mineralization. Please
remove all resource estimates from your filing which are not based on an
economically derived cutoff.

The current Indicated and Inferred Mineral Resources of the
Concordia and San Gregorio North veins, reported at various Ag ranges
(g/t)1 are shown in the following table:

… 2/

Division of Corporation Finance
U.S. Securities and
Exchange Commission
September 26, 2012
Page 2

    Ag Range (g/t)
    Vein
    Zone
    Classification
    Tonnes (t)
    Au (g/t)
    Ag (g/t)
    Au (oz) 2
     Ag (oz) 2

    > 45.0
    Concordia
    La Quinta
    Indicated
    4,590,000
    0.10
    103.4
    14,757
    15,259,171

    Concordia
    La Quinta
    Inferred
    10,516,000
    0.08
    85.5
    27,048
    28,907,758

    San Gregorio

    North
    Inferred
    4,005,000
    0.15
    79.4
    19,315
    10,223,998

    > 60.0
    Concordia
    La Quinta
    Indicated
    3,625,000
    0.11
    117.0
    12,820
    13,636,144

    Concordia
    La Quinta
    Inferred
    6,319,000
    0.09
    107.8
    18,285
    21,901,045

    San
      Gregorio
    North
    Inferred
    2,608,000
    0.16
    94.3
    13,416
    7,907,096

    > 75.0
    Concordia
    La Quinta
    Indicated
    2,757,000
    0.13
    132.6
    11,523
    11,753,792

    Concordia
    La Quinta
    Inferred
    3,734,000
    0.11
    136.3
    13,206
    16,363,187

    San
      Gregorio
    North
    inferred
    1,792,000
    0.17
    107.1
    9,795
    6,170,569

    > 90.0
    Concordia
    La Quinta
    Indicated
    2,057,000
    0.14
    149.8
    9,259
    9,907,038

    Concordia
    La Quinta
    Inferred
    2,506,000
    0.12
    163.1
    9,669
    13,141,131

    San
      Gregorio
    North
    Inferred
    1,383,000
    0.17
    114.6
    7,559
    5,095,708

    > 120.0
    Concordia
    La Quinta
    Indicated
    1,106,000
    0.16
    189.8
    5,689
    6,749,150

    Concordia
    La Quinta
    Inferred
    1,454,000
    0.14
    206.6
    6,545
    9,658,117

    San
      Gregorio
    North
    Inferred
    460,000
    0.17
    137.8
    2,514
    2,038,003

    > 150.0
    Concordia
    La Quinta
    Indicated
    655,000
    0.19
    229.0
    4,001
    4,822,525

    Concordia
    La Quinta
    Inferred
    904,000
    0.15
    251.2
    4,360
    7,301,058

    San
      Gregorio
    North
    Inferred
    72,000
    0.19
    169.4
    440

    392,142

1Tonnes have been rounded up to the nearest 1,000.
Au is reported to 2 decimal places and Ag to 1 decimal place.
21
troy ounce = 31.103 grams.

… 3/

Division of Corporation Finance

U.S. Securities and Exchange Commission

September 26, 2012

Page 3

Measured resources could not be estimated for the La Quinta and San Gregorio North zones because metallurgical testing is only in the preliminary stages and drill spacing is still considered too broad to confidently estimate. Material was
reclassified from Indicated to Inferred Mineral Resource category in areas where the classification was supported by only one drill hole. The classification of material in the area of the historic Concordia mine was also reduced in its
classification because the actual 3D location and extents of the workings are not accurately known.  Based on a historic long section circa 1954, development appears to have been completed down to 200m below surface, and mining carried out only to
approximately 100m depth.

A conceptual analysis of the resource model using mine planning software assisted the development of an appropriate exploration program to advance the Nieves Project. Gemcom Whittle software was used in this process with conceptual costs forecast by
Quaterra, the Mineral Resources (Indicated and Inferred) and two (2) pit slopes (45 and 50°) to create a number of scenarios.  The resulting pit shells were examined in 3D and drill holes proposed that would test the area between the shells,
along strike outside the shells and potentially upgrade Inferred Mineral Resources to the Indicated Mineral Resources classification.

The analysis showed that the La Quinta zone needs additional drill testing in the area between the shells to potentially upgrade the Inferred Mineral Resources to Indicated Mineral Resources and that additional drill testing should be completed
along strike (both directions) of the extents of the larger conceptual pit to potentially increase the tonnage of the Ag mineralization. Similarly, drilling needs to be completed along strike, in both directions of the San Gregorio Zone to determine
the extent of the mineralization that occurs along this trend. Drilling also needs to be closer spaced in the area drilled in the last exploration program to potentially increase to resource class from Inferred Mineral Resource to Indicated Mineral
Resource.

Specific recommendations by Caracle Creek for the Nieves project include step out drilling to close off the strike extent of the Concordia and San Gregorio vein systems and infill drilling to upgrade mineral resource classification in San Gregorio
North and to the SW of the high grade La Quinta resource. Additional recommendations include drill testing geophysical anomalies in the Dolores, Santa Rita, California and Orion areas and a continuation of metallurgical test work on the Concordia
and the San Gregorio mineralization with additional specific gravity determinations to more accurately estimate the deposit tonnage along both vein systems.

On August 10, 2010, Caracle Creek completed an updated NI 43-101 compliant independent resource estimate for Nieves silver property. The updated resource estimate for the San Gregorio North zone was just over 4 million tonnes of Inferred Mineral
Resources with an estimated grade of 79.4 g/t Ag and 0.15 g/t Au equating to almost 10.25 million ounces of Ag and over 19,000 ounces of Au.  Resources estimated for the La Quinta zone include almost 4.6 million tonnes of Indicated Mineral Resources
averaging 103.4 g/t silver (~15.26 million Ag ounces) and 0.10 g/t Au in addition to just over 10.5 million tonnes of Inferred Mineral Resources grading 85.5 g/t Ag (~ 28.9 million Ag ounces) and 0.08 g/t Au.

           … 4/

Division of Corporation Finance
U.S. Securities and
Exchange Commission
September 26, 2012
Page 4

    2.

      Please disclose the metal price assumptions, all
      other key assumptions and parameters used to prepare all your resource
      estimates.

The updated resource estimate uses a base case cut-off of 45g/t
Ag. Although the mineralization occurs at both open pit and underground working
depths, preliminary Whittle pit shells suggest that a significant proportion of
material could be mined through open pit operations using a mining cost of
$1.50/tonne, processing costs of $12/tonne, assuming a 95% recovery and a silver
price of $15 per troy ounce minus $1.00 for refinery and marketing. At the 45/t
Ag (base case) cut-off grade, the Nieves resources are favorable with respect to
selectivity and other factors when considering mining options and are considered
to exhibit reasonable prospects for economic extraction.

Current Indicated and Inferred Mineral Resources for the
Concordia and San Gregorio vein systems reported at a 45 g/t Ag cut-off grade
(base case)1 are shown in the table below:

     Vein

    Zone

    Resource Class

    Tonnes (t)

    Au (g/t)

    Ag (g/t)

    Au (oz) 2

    Ag (oz)2

     Concordia

    La Quinta

    Indicated

    4,590,000

    0.1

    103.4

    14,757

    15,259,171

     Concordia

    La Quinta

    Inferred

    10,516,000

    0.08

    85.5

    27,048

    28,907,758

     San Gregorio

    North

    Inferred

    4,005,000

    0.15

    79.4

    19,315

    10,223,998

1 Tonnes have been rounded up to the nearest 1,000.
Au is reported to 2 decimal places and Ag to 1 decimal place.
21
troy ounce = 31.103 grams.

    3.

      Disclosure using non-SEC reserve definitions and
      resource estimates is allowed for Canadian incorporated companies under
      the exception in Instruction 3 to Paragraph (b)(5) of Industry Guide 7.
      However, all mineral reserves or resource estimates that you disclose
      under this provision must meet the standards of National Instrument
      43-101. Please note disclosure of a non-compliant historical estimate may
      be disclosed using the historical terminology if the
  filer:

    Identifies the source and state of the historical estimate;

    Comments on the relevance and reliability of the historical
  estimate;

    To the extent known, provides the key assumptions, parameters and
  methods used to prepare the historical estimate;

… 5/

Division of Corporation Finance
U.S. Securities and
Exchange Commission
September 26, 2012
Page 5

    States whether the historical estimate
      uses categories other than those prescribed by NI 43- 101;
      and

    Includes any more recent estimates or
      data available.

History, page 23

Metech Pty. Ltd., of Perth, Australia was commissioned to
prepare an ore reserve and mining planning study of the MacArthur deposit in
1989 The Metech study initiated the purchase of the Anaconda Yerington district
properties by Arimetco International (“Arimetco”). Arimetco mined a total of six
million tons at an estimated grade of 0.36 % total copper using open pit methods
from the MacArthur deposit in the period of 1995 to 1998. Due to financial
difficulties resulting primarily from the low price of copper, Arimetco sought
protection under Chapter 11 of the U. S. bankruptcy Code in January 1997 and
suspended all operations in 2000. After Arimetco’s departure, the mining claims
over the deposit were allowed to expire. No consistent, large-scale mining has
occurred on the site.

History, page 32

In 1976, all assets of The Anaconda Company, including the
Yerington Mine, were purchased by the Atlantic Richfield Company (ARCO) who in
1979 shut down dewatering pumps in the pit and closed the Yerington Mine due to
low copper prices. In 1982, ARCO sold the entire Yerington Mine complex and Weed
Heights town site to Mr. Don Tibbals of Yerington, Nevada, who scrapped the
plant and equipment. At closure, before dewatering pumps were shut off, the
Yerington mine plan hosted a pre-stripped, non NI 43-101 compliant historic
“reserve” of 98 million tons averaging 0.36% Cu containing approximately 696
million pounds of copper (K. L. Howard, Jr., Anaconda Internal Memo, 1979)within
the ultimate pit design. The (Howard, 1979) historic estimate was prepared from
a geologic section calculation using a 0.2 %TCu cut-off grade. Although the 1979
estimate contained no classification for measured, indicated, or inferred
resources as defined by NI 43-101, the total estimate compares favorably to
Tetra Tech NI43-101 compliant independent resource estimate completed in
February 2012. An additional 22.8 million tons of material containing 136.8
million pounds copper was identified adjacent to the pit in this historic
estimate. The (Howard, 1975) memo addressing this material is considered a
reliable historic estimate because it cites mine reconciliation calculations and
geologic projections from drill holes using a 0.2% Cu grade cut-off in an
internal Anaconda memo by T. Leigh to W.C. Norem (1979).

History, page 33

The Bear Deposit, located partially in the northeast corner of
the Yerington Mine property, was discovered in 1961 by Anaconda during
condemnation drilling in the sulfide tailings disposal area. The program
identified chalcopyrite mineralization hosted in a porphyry system below 500 to
1,000 feet of valley fill and unmineralized bedrock. The mineralization is
related to micaeous veining rather than type quartz veining common in the
Yerington Mine porphyry system. Historic (not NI 43-101-compliant) resources
estimated for the Bear Deposit are more than 500 million tons of material
averaging 0. copper (Dilles and Proffett, 1995). The reference for this estimate
does not include information regarding cut-off grade or methods used for the
calculation and does not delineate categories for the resource. estimate is
considered reliable as it was calculated by the author who was the principal
geologist Anaconda (one of the world’s premiere copper companies of the time)
responsible for the Bear drilling program in 1967. The Bear deposit is known to
extend beyond the boundaries of SPS properties and percentage of the estimated
resource controlled by SPS is unknown.

… 6/

Division of Corporation Finance
U.S. Securities and
Exchange Commission
September 26, 2012
Page 6

Exhibit 99.2

Audited Consolidated Financial
Statements

Notes to Consolidated Financial
Statements

Note 2 Significant accounting
policies

Mineral Properties, page 12

    4.

      We note you capitalize costs related to exploration
      and development expenditures, net of any recoveries. Please describe to us
      and revise future filings to disclose the nature of these recoveries and
      provide the total amount included in the capitalized asset for the fiscal
      years presented.

Going forward, we will amend the mineral properties accounting
policy to include the following:

“Proceeds from the sale of properties or cash proceeds received
from farm-out agreements are recorded as a reduction of the related mineral
interest, with any excess proceeds accounted for in profit or loss.”

The recovery of $1,231,151 (2010 - $1,464,076) represents
consideration received and reimbursement of expenses incurred on the Company’s
Mexican properties.

We will continue to separately present recoveries on the
mineral properties continuity table.

… 7/

Division of Corporation Finance
U.S. Securities and
Exchange Commission
September 26, 2012
Page 7

17. Transition to IFRS, page 40

    5.

      Please provide us with the date you used to
      determine which accounting policies to apply. Please refer to the guidance
      in IFRS I, particularly paragraphs 7 and
8.

As required by IFRS 1 paragraph 7 and 8, the significant
accounting policies applied by the Company for the years ended December 31, 2011
and December 31, 2010 and as at January 1, 2010, comply with all IFRS standards
that were effective as at December 31, 2011.

    6.

      We note that you do not address the mandatory
      exceptions, as set forth in paragraphs 14-17 and Appendix B of IFRS I,
      that you applied upon the adoption of IFRS. To the extent that your
      primary financial statements reflect the use of mandatory excepti