K2 Energy Makes Major Development in Horizontal Drilling

K2 Energy has a patent pending on "Reverse Circulation Horizontal Drilling", for natural gas, coalbed methane and oil well drilling. This technology will allow both low pressured and under pressured reservoirs to be horizontally drilled with minimum formation damage.

Jim Livingstone, President & CEO of K2 Energy said, "reservoir damage from conventional horizontal drilling in low and under pressured reservoirs carried out on our Montana properties resulted in very low production. We believe that other companies are having similar production problems from horizontal drilling. Current horizontal drilling technology pushes the drill cuttings to surface with drilling mud or air pressure. The cuttings pass between the outside of the drill pipe and wall of the formation."

Mr. Livingstone explained, "Reverse circulation horizontal drilling is different in that double wall drill pipe or coiled tubing is used. When the drill bit enters the pay zone, the formation experiences no pressure from the drilling operations. All the drill cuttings are discharged to surface through the inside string of the double wall drill pipe or coiled tubing. The pay zone is exposed to minimum damage from the drilling operations. A specially developed downhole blow out preventer designed for dual wall drill pipe and coil tubing allows this reverse circulation horizontal drilling system to meet regulatory requirements."

K2 Energy now has patent pending protection on five applications of reverse circulation technology in the United States with reserved rights to obtain patent protection around the world for the use of this technology in natural gas, coalbed methane and oil well drilling. Once issued, patents will give K2 Energy a legal monopoly on this technology and it's applications for up to 20 years, which represents a significant barrier to its competitors.

The ability to drill and produce from both low and under pressured reservoirs provides K2 Energy with a tremendous opportunity to lease or farm-in on lands where conventional drilling have not yielded economic production rates, particularly coalbed methane.