LONDON, Ky.–(EMWNews)–Kentucky USA Energy, Inc. (OTCBB: KYUS), an early stage natural

gas exploration and production company, announced today that the

drilling contractor for the Company’s initial

wells has moved a second drilling rig onto the Company’s

second well, Hunter Wells #1 location and has spud-in. Due to mechanical

difficulties on the first rig, there has been a 2 ½

week delay drilling at the Company’s first

well, Francis Grace #1 location. Drilling is presently at the 2000 foot

level and is expected to reach total depth (“TD”)

at the base of the shale formation of approximately 2400 feet. Once TD

is reached at the first well and rig down is completed, the drilling

contractor will move the rig from Francis Grace #1 to the Company’s

third well, Slinker #1B location.

“We have spent these last few months planning

and preparing to tap into the proven, undeveloped reserves in our New

Albany Shale leasehold in western Kentucky, and we are about to achieve

a major milestone – completing the drilling of our first well. With up

to approximately 50 wells to be drilled and potentials of close to 20

billion cubic feet (Bcf) of net undeveloped reserves on our leasehold,

our prospective reserves could be worth substantially more than our

original reserves report estimates, based on current NYMEX gas prices,”

Steven Eversole, CEO of Kentucky USA Energy commented. “Although

we have had a delay on the Francis Grace #1 well, I am pleased with the

progress so far, and I look forward to sharing additional drilling

updates with our investors and shareholders in the coming months.”

About Kentucky USA Energy, Inc.

Headquartered in London, KY, Kentucky

USA Energy, Inc. engages in the acquisition, exploration, and

development of oil and natural gas resource properties, with a primary

focus on New Albany shale gas in the Illinois Basin in western Kentucky.

The Company is a growing independent energy company with the experience

and technological expertise to develop its gas resources in the Illinois

Basin’s New Albany Shale.

More information about the Company may be found at www.kusaenergy.com

Forward-Looking Statements

Certain statements in this news release, which are not historical facts,

are forward-looking statements within the meaning of the Private

Securities Litigation Reform Act of 1995. These statements are subject

to risks and uncertainties. Words such as “expects”, “intends”, “plans”,

“may”, “could”, “should”, “anticipates”, “likely”, “believes” and words

of similar import also identify forward-looking statements.

Forward-looking statements are based on current facts and analyses and

other information that are based on forecasts of future results,

estimates of amounts not yet determined and assumptions of management.

Actual results may differ materially from those currently anticipated

due to a number of factors which may be beyond the reasonable control of

Kentucky USA Energy, including, but not limited to, the availability and

pricing of additional capital to finance operations, including the

drilling of its initial gas wells, longer term drilling programs and

additional leasehold acquisitions, the viability of the shale gas fields

in the Illinois Basin in western Kentucky, the ability of Kentucky USA

Energy to build and maintain a successful operations infrastructure and

to effectively drill and develop producing wells, the successful

negotiation and execution of cost-effective third-party gas drilling and

distribution agreements, the continued commitment of drill rig operators

and future economic conditions and energy prices. Readers are urged not

to place undue reliance on the forward-looking statements, which speak

only as of the date of this release. We assume no obligation to update

any forward-looking statements in order to reflect any event or

circumstance that may arise after the date of this release. Additional

information on risks and other factors that may affect the business and

financial results of Kentucky USA Energy can be found in the filings of

Kentucky USA Energy with the U.S. Securities and Exchange Commission.

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