Robert A. Kadane, President of KFG Resources Ltd., announced today that the Company's wholly owned subsidiary, KFG Petroleum Corporation, has exercised an option, previously announced from Sien Energy, San Antonio, Texas, to purchase a 75% interest in 75 square miles of 3D seismic, together with a 75% working interest in an 8,468 acres lease (the Barton Lease), in East Feliciana Parish, Louisiana. The consideration paid by KFG for the option and seismic and leasehold interests aggregated US $440,025. The Barton Lease is to the base of the Frio formation, approximately 5,200 feet.

The first two wells have been staked and permitted on the Barton Lease, the KFG Barton # 1, Section 47, TIS/R2E and the KFG Barton #2, Section 50, TIS/R2E, East Feliciana Parish, Louisiana. Drilling operations are scheduled for September, 2000. KFG has retained a 63.75% working interest (47.8% net revenue interest) in both wells. This area of East Feliciana Parish is known for its shallow Miocene/Frio gas reserves down to 5,000 feet.

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."