Mr. Robert A. Kadane, President of KFG Resources Ltd., announced today that KFG Petroleum Corporation, a wholly-owned subsidiary of the Company, has resumed drilling operations on its Barton Lease in East Feliciana Parish, Louisiana. Drilling has begun on the Barton #3, Section 57, T1S, R1E, and the Barton #4, Section 64, T2S, RlE, East Feliciana Parish, Louisiana. The Company has a 58.75% working interest (44.1% net revenue interest) in both wells. Total depth in both wells will be 4,000 feet, the objective being shallow Frio gas sands that produce in the area. The Barton lease consists of 8,543 acres.

The Company's common shares are listed on the Canadian Venture Exchange, Vancouver, B.C., 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."