Mr. Robert A. Kadane, President of KFG Resources Ltd., reported today that KFG Petroleum Corporation, a wholly-owned subsidiary of the Company, completed its No.18-1 Ransom, SE/4 Section 18, T34S-RI9W, Comanche County, Kansas. The well was completed in the Pawnee and Fort Scott formations for an open flow potential of 6,950,000 cubic feet of gas per day. The Company owns a 24.7% working interest (20.08% net revenue interest) in the well and surrounding 1,692 acres. The well will be on production in early January, 2002, for approximately 1,000,000 cubic feet of gas per day.

In a related development, Mr. Kadane announced the drilling of the Ransom 9-1, NW/4 of Section 9, T34S-RI9W, Comanche County, Kansas. The Ransom 9-1 is a 6,600 foot Arbuckle test and will be started immediately. The Company's interest in this well is identical to the Ransom 18-1 well.

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."