KFG Resources Ltd. is pleased to announce that it's subsidiary, KFG Petroleum Corporation, has signed a contract with International Paper Company (IP), Houston, Texas, regarding an oil and gas Lease in T10N-R5E and T10N-R6E, Catahoula Parish, Louisiana involving 8,340 acres. KFG has one year from March 10, 2000 to drill two (2) wells to 4500' at locations of its own choosing to earn the right to shoot a 3D seismic survey on 8340 of IP fee lands. KFG will earn a 75% net revenue interest lease in the production unit around each well (40 acres for oil and 160 acres for gas ) and IP will have the option to backin after payout of each well for a 25% working interest. After the second well is drilled, KFG will have earned the right, but not the obligation, to shoot a 3D seismic program on the acreage.

If the 3D survey is completed and processed by September 2001, KFG will earn a 75% working interest in IP's 8340 acres for a primary tenn of two years with an automatic extension of one additional year if a total of four (4) wells have been drilled. IP retains the right to participate for a 25% working interest at costs in any project identified by 3D seismic. If IP declines to participate in any prospect, KFG will own 100% of the interest in that prospect with no reversionary interest to IP .In addition, after the first 3D survey is finished, KFG will have the right to shoot another 3D survey on additional IP lands in the area if started within 6 months after finishing the first survey.

It is anticipated that funding for the two earning wells will come from a previously announced private placement and that the drilling of the two wells will be in June 2000 by KFG Petroleum's subsidiary, Shamrock Drilling Co.

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."