Robert A. Kadane, President of KFG Resources Ltd. announced today that the Company's subsidiary, KFG Petroleum Corporation, has completed a new well in the East Colter Field, Comanche County, Kansas. The Lousch "D" #l located in the SW/4 Section 31, T32S-R18W, was completed in the Mississippian, Pawnee and Altamont for an Absolute Open Flow Potential of 1,950,000 cubic feet of natural gas. The well went on production the first week of February, 2000, and is currently producing 400 Mcf of gas per day on an 8/64th choke, FTP 650 psi.

The Loush "D" #1 is the third successful completion drilled at East Colter along with the Lousch "B" #1 and "C" #1. There are no dry holes. The wells were drilled on a farmout, which has been temporarily put in abeyance while an offset operator drills a well offsetting the Lousch Unit to the northeast. After this offset is drilled in March, 2000, KFG will have 120 days to decide whether or not to drill another well on the Lousch Unit. The Lousch "B", "C" and "D" wells are currently producing a total of 1200 Mcf of gas per day. The Company has a 10.625% working interest in all wells (8.25% net revenue interest). At payout of each well, the farmor has the option to convert an overriding royalty interest to a 30% working interest, reducing the Company's net revenue interest to about 6.1 %.

The Company's common shares are listed on the Canadian Venture Exchange, trading symbol "KFG". For additional information, please contact Mr. Robert A. Kadane, President, at (303) 825- 7080.

The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release."