A method of fracturing a downhole formation according to which a plurality of jet nozzles are located in a spaced relation to the wall of the formation to form an annulus between the nozzles and the formation. A non-acid containing stimulation fluid is pumped at a predetermined pressure through the nozzles, into the annulus, and against the wall of the formation, and a gas is introduced into the annulus so that the stimulation fluid mixes with the gas to generate foam before the mixture is jetted towards the formation to form fractures in the formation.