K2 said the well would be drilled vertically to 4000 feet to log multiple conventional oil and gas zones before drilling a 2000ft lateral leg into the Woodford shale.

Jones-1 is the first of several wells planned to test the Woodford and Caney shale resources, with the potential of up to 81 billion cubic feet of net gas.

The company said it plans to use multistage fracture stimulation techniques, applied successfully by other operators in the play adjacent to the Bad Creek project.

According to K2, the Woodford and Caney shale play is proven to be one of the fastest developing unconventional gas plays in the US, with many large independents mounting aggressive drilling programs on the back of successful wells in adjoining areas.

"These wells generally produce over 1 million cubic feet of gas per day and reserves of 2-4 billion cubic feet of gas per well," K2 said.

Managing director Peter Moore said the company has numerous wells planned for the year, targeting conventional and unconventional hydrocarbons at Bad Creek.

"K2 has identified a large prospective gas resource in its Bad Creek area and, if drilling proves successful, it can start booking these resources into the proven and probable reserves category which will create significant value for our company," he said.

K2 holds about 5500 acres in the Bad Creek Project.