Kentucky USA Energy Corp.

The Appalachian Basin is the largest onshore basin in the U.S. in terms of area, and much of the basin remains relatively unexplored. Cumulatively the Appalachian and Illinois Basins, which together span ten eastern states, have produced more than 50 TCF of natural gas. Yet after more than a century of production, equal or greater quantities are still waiting to be tapped. Current estimates of remaining technically recoverable resources (including proved reserves) are in the range of 79 to 96 TCF. The majority of the remaining hydrocarbons exist in unconventional settings, primarily coal seams, Devonian-age shales and tight gas sands, as well as deeper formations. [Interstate Oil and Gas Compact Commission (IOGCC) & DOE, March 2006]

The USGS estimates as much as 1.9 TCF of technically recoverable reserves exist in the region’s New Albany Shale. The formation is drawing significant interest. Several companies are consolidating large lease blocks or obtaining gas production permits. Companies successfully drilling New Albany wells in Kentucky include Inexco Oil Company (Butler County) and Endeavor Energy Resources LP (Breckinridge County), with Quicksilver Resources (Meade County) and El Paso Production Co. (Daviess County) having success in Indiana (IOGCC, March 2006). Chesapeake Energy Corporation is also active in the area.

LEARN ABOUT THE WESTERN KENTUCKY SHALE PLAY

Chesapeake Energy Corporation, the 3rd largest independent producer of natural gas in the U.S., from its 2006 Annual Report states that it acquired Columbia Natural Resources for $3 billion in 2005. This acquisition was for future growth and value creation in Appalachia, where Chesapeake’s 2006 reserve and production growth “exceeded our expectations”, according to the company’s Annual Report. Chesapeake reports it is pursuing new initiatives to develop unconventional shales in western Kentucky, Illinois and Alabama and expects to drill its first operational horizontal shale well in Appalachia this year.

Certain statements made during this presentation are forward looking and are subject to risks and uncertainties forward-looking statements made are uncertainties. The forward based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to us. Actual results could differ materially from the forward-looking statements mad during this presentation. When we use the words “believe,” “expect,” “anticipate,” “plan,” “ will,” “ intend” or any similar expressions, we are identifying forward-looking statements.

The forward-looking statements made during this presentation are subject to the safe harbor of the Private Securities Litigation Reform Act of 1995