K2 Energy Corp. Extends Debenture Due Date

K2 Energy Corp. (TSX: KTO) has entered into an extension agreement with MMI Group Inc., the holder of its 9.5% Debenture due May 31, 2004. This agreement provides for a 1-year extension to the note consisting of $1,925,469 principal amount plus accrued interest owing in the amount of $46,105 for a total revised principal amount of $1,971,574. The note will become due and payable on May 31st, 2005 and, under the terms of the agreement, K2 will issue 1.6 million shares as consideration for extending the maturity date and for payment of costs and 8 million warrants at the closing date of the above note exchange/extension. The term of these warrants will match the 1-year amended term of the note and will expire on May 31st, 2005. The warrants will be exercisable at $0.25 per share for potential proceeds of $2,000,000 if exercised. In addition, K2 Energy Corp. has the ability to repay the MMI Debenture at any time prior to maturity without penalty. The closing of the transactions contemplated by the agreement is subject to receipt of applicable regulatory approvals.

The note will bear cash interest at the rate of 10% per annum, payable quarterly. MMI Group Inc. will also become entitled to one Board seat to which Mr. Jeffrey Francoz, MMI's President & Portfolio Manager will assume. Management and the Board of K2 Energy Corp. are pleased to welcome Mr. Francoz to the Board of Directors. Mr. Francoz brings a strong background in corporate finance, securities valuation and public market regulatory issues to the Company. His contributions as a Director will greatly assist in the Company's continuing efforts to capitalize on the exploration opportunities within its land holdings on the Blackfeet Indian Reservation.

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