K2 Energy Begins 5-Well Drilling Program in Montana

K2 Energy has commenced drilling of the Spring Creek No. 6-35 well targeting shallow Bow Island natural gas immediately north of its Palmer field, on the Blackfeet Indian Reservation in northern Montana, in which a pipeline exists in the immediate area. Following the drilling of this well, the rig will then move to commence drilling of the Spring Creek No. 9-27 well targeting the same formation and the Kipp No. 1 well targeting the Horsethief and Two Medicine formations within the Company's "Central Block" prospect area.

Following the completion of the above referenced wells, the drilling of two wells by an industry partner in the "Triangle Zone" prospect area will commence.

Drilling of the five well program is expected to continue through to the middle of April, 2004.