K2 Energy Announces Rights Offering

K2 Energy Corp. is making a rights offering (the "Offering") pursuant to which the holders of K2's common shares ("Common Shares") will be able to subscribe for up to an aggregate of 18,497,606 Common Shares at a price of $0.22 per Common Share. K2 has filed a final rights offering circular (the "Circular") in respect of the Offering with the securities commissions in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario (the "Qualifying Jurisdictions"). Each holder of record of Common Shares as at the close of business on April 28, 2004 (the "Record Date") will be issued one right (a "Right") for each Common Share held. A holder of Rights will be entitled to subscribe for one fully paid and non-assessable Common Share for each four Rights held at a price of $0.22 per Common Share at or before 4:00 p.m. (Toronto time) on May 20, 2004 (the "Expiry Time"). Rights not exercised at or before the Expiry Time will be void and have no value. K2's directors and officers, who hold an aggregate of 12,860,767 Common Shares directly and indirectly, have indicated that they intend to exercise all of the Rights they receive under the Offering for Common Shares, resulting in the issuance to them of an aggregate of at least 3,215,192 Common Shares under the Offering. K2's directors and officers may also subscribe for additional Common Shares under the Additional Subscription Privilege of the Offering.

K2 has retained Peters & Co. Limited to act as soliciting dealer/dealer manager with respect to the solicitation of exercises of Rights in the Qualifying Jurisdictions. Peters & Co. Limited will receive a fee for its services, as described in the Circular. Computershare Trust Company of Canada is the subscription agent and custodian for the Offering.

Rights will be evidenced by fully transferable certificates (the "Rights Certificates") and will be listed for trading on the Toronto Stock Exchange (the "TSX") under the symbol "KTO.RT" from the Record Date until 12:00 p.m. (Toronto time) on May 20, 2004. A Rights Certificate evidencing the total number of Rights to which the holder is entitled, together with a copy of the Circular, will be mailed to each holder of record of Common Shares as of the Record Date with an address of record in one of the Qualifying Jurisdictions. The Rights of holders of record of Common Shares as of the Record Date with an address of record outside of the Qualifying Jurisdictions will be dealt with as described in the Circular.

K2 will use a portion of the net proceeds of the Offering towards the retirement of K2's remaining debenture, with any remaining proceeds to be added to K2's working capital and used to fund ongoing overhead and exploration and development costs, including a seismic acquisition program.

K2 also announced today that it has requested an extension of one month to its April 18, 2004 drilling obligation completion date from the Blackfeet tribe, as provided for under its Amended K2/Blackfeet IMDA. K2 is currently drilling its third of three obligation wells, with its industry partner currently drilling their first of two wells. Results from this drill program will be evaluated upon completion of the drilling operations.

Located in Calgary, Alberta, K2 Energy Corp. is an emerging junior oil and gas exploration company with a unique exploration opportunity in northern Montana. Bordering Alberta, K2's lands contain several prospects, which extend south from Alberta, including Bow Island natural gas, 'Triangle Zone' natural gas and thrusted Mississippian deep gas. The Common Shares trade on the TSX under the trading symbol "KTO".

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