Robert A. Kadane, President of KFG Resources Ltd., announced today that KFG Petroleum Corporation, a subsidiary of the Company, has staked a location for the #1 Brown-Dunn well in SW /4 Section 34, T34S-R17W, Comanche County, Kansas. This well is a 5,400 foot Mississippian test and will be drilled immediately. The Company owns an 18% working interest (14.4% net revenue interest) in this well and the surrounding 1,280 acres. At payout, the farmor of this prospect has the option to convert a 5% overriding royalty interest to a 25% working interest.

In addition, the Company will drill the #4-21 Acres, a development well in the NE/4 Section 21, T32S-R18W, Comanche County, Kansas. The Company has a 20.625% working interest (17.72% net revenue interest) in this well. The #4-21 Acres well will fInish development of the Acres lease prospect.

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."