A method of fracturing a formation while drilling a wellbore includes the steps of: providing a bottomhole assembly (“BHA”) having a reamer positioned above a pilot hole assembly; connecting the BHA to a drill string; actuating the BHA to drill a first wellbore section with the reamer and to drill a pilot hole with the pilot hole assembly; hydraulically sealing the pilot hole from the first wellbore section; and fracturing the formation proximate the pilot hole.