Robert A. Kadane, President of KFG Resources Ltd., announced today that KFG's subsidiary, KFG Petroleum Corporation (the "KFG Petroleum") is moving in and preparing to drill the first two wells on the Barton Lease, East Feliciana Parish, Louisiana. The #1 and #2 Barton wells, each consisting of 160 acre drill site units, are both scheduled to be drilled to a depth of 4500' to evaluate 3D seismic anomalies in the Frio and Miocene formations. Both of the wells are located within 3000' of a pipeline connection. KFG Petroleum's working interest in the Barton #1 and #2 is 88.75% (a 66.56% net interest) which is an increase from the 63.75% working interest (a 47.8% net interest) previously reported. In all remaining acreage outside of the #1 and #2 Barton Wells KFG Petroleum's working interest remains 63.75% (a 47.8% net interest). The Barton Lease consists of 8543 acres.

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."