Kentucky USA Energy Corp., London, Ky., (OTCBB: KYUS) reports it has reached a total depth of 2,340 feet on the Francis Grace #2 well and 3,000 feet on the J&J Johnston #2, both in the New Albany Shale in western Kentucky.

Logs from both wells confirmed that the shale formation encountered is comparable to that of wells evaluated in Kentucky USA's original reserves study. The Clear Creek limestone formation, a gas zone not found in the original study, was encountered in the J&J Johnston #2 well between 2,170- and 2,184 feet. Kentucky USA says it will complete the gas zone first before flow testing. Flow tests were scheduled for the last week of December.

The company says it has identified five more wells and will complete permit applications in January.

Kentucky USA has assets in New Albany shale gas in the Illinois Basin in western Kentucky.