Robert A. Kadane, President of KFG Resources Ltd. announced today that the Company's subsidiary, KFG Petroleum Corporation, has completed a new gas well, the Acres #3 in the Nescatunga Field, Comanche County, Kansas, located in the NE/4 Section 21, T32S-R18W. The well was completed in the Pawnee zone at 5,050 feet flowing 1,400,000 cubic feet of gas per day, on a 6/64th choke, flowing tube pressure 1490 psi. The Absolute Open Flow Potential on the well was 25,460,000 cubic feet of gas. In a related development, the Acres #1 well has been recompleted in the Drum zone at 4,690 feet, flowing 1,300,000 cubic feet of gas per day, on a 16/64th choke, flowing tube pressure 1,390 psi. The Absolute Open Flow Potential on this well was 7,900,000 cubic feet of gas. The average BTU content of the gas of both of these wells is 1,040. Two more wells are planned on the Acres lease; first a joint well with Imperial Oil, Wichita, Kansas, should be drilled in March or April, 2000, and second, the Acres #4 in the fall of 2000. As of January, 2000, the Acres #1 well has paid out and the farmor has converted its overriding royalty interest into a 25% working interest, reducing the Company's interest in this well to a 20.625% working interest (17.45% net revenue interest). KFG's working interest in the Acres #3 is 27.5% (21.45% net revenue interest) and the farmor has the same option to convert its overriding royalty to a 25% working interest at payout of the well. The Acres lease is currently producing 2,750,000 cubic feet of gas per day. There have been no dry holes.

In an unrelated development, KFG has started the first well in the Mach Farmout announced in November, 1999. The Woolfolk B #1-32, Section 32, T34S-R19W, Comanche County, Kansas, has been spudded and should be drilled in about 10 days. KFG has a 13.5% working interest (10.8% new revenue interest) in this well. The farmor has reserved the right to convert various overriding royalty interests to a 25% working interest at payout of the well, reducing the interest of KFG.

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."