JayHawk Acquires 16-Mile Pipeline, Adjacent 6,500 Acres

JayHawk Energy, Inc. announced the commencement of its drilling program on the Uniontown Project, and the closing of the Purchase and Sale Agreement with Galaxy Energy Inc., a private company.

The closing of the acquisition completes the purchase of assets in the Crawford and Bourbon counties of Kansas, obtaining a 100% working interest in a 16-mile gas pipeline as well as the gas production within 6,500 acres of contiguous land adjacent to the pipeline, for a total of $2 million. The production consists of a modest 16BOEPD (100Mcf) of Coalbed Methane Gas from seven (7) connected wells out of thirty-four (34) wells. No debt has been assumed from the acquisition, which closed on Monday March 31, 2008, subject to terms and conditions of the Purchase and Sale Agreement.

"Our first step will be to dewater the seven (7) tied-in wells, and then connect the additional 27 wells on our way to maximizing production in this area," stated Lindsay Gorrill, President and CEO of JayHawk Energy Inc. "These assets combined with our Uniontown project provide over 4,100 drilling locations with a net interest of 100% to JayHawk Energy, significantly expanding our South Eastern sector asset base as a 'core area' with the acreage positions adjacent to each other," added Gorrill.

"We have also commenced our drilling program on the previously acquired Uniontown acreage, in which we expect to drill a maximum of four (4) wells per month with, and with weather permitting, tie-in all productive candidates. We anticipate production of approximately 40 Mcf per well, and with increased gas prices, aim to be cash-flow positive on this project by December of this year, with up to 36 new wells, and up to 70 tied-in," concluded Gorrill.

Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Examples of such disclosures would be statements regarding "probable," "possible," or "recoverable" reserves among others.

Management hopes these transactions will bring additional value to the shareholders of JayHawk Energy. There is no guarantee that the projects that JayHawk has recently acquired will increase the value of its shares of common stock, or that JayHawk will acquire rights to explore and operate any other such projects, or that in the event that it acquires rights to explore and operate other such projects, that these actions will be successful or increase the value of JayHawk's common stock.


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