Mr. Robert A. Kadane, President of KFG Resources Ltd., reported today that the Company has earned an interest in the No. I Duval well, Section 5, T2N-R1W, Wilkinson County, Mississippi, completed in sixteen feet of Frio Sand between shale at 3,431-3,447 feet, flowing 231,000 cubic feet of gas per day on a 6/64th coke, flowing tubing pressure 1,130 psi. The well was drilled by the Company's subsidiary, Shamrock Drilling Company under contract with unrelated parties, earning an 8% working interest (6% net revenue interest) in the well and 320 acre unit. It is anticipated that Shamrock will act as drilling contractor on additional wells, in this area, commencing in the next 30 to 45 days, and will earn a similar interest in these additional wells.

Mr. Kadane also noted that the Company has staked location for its #1 Howell well, East Feliciana Parish, Louisiana ( the Barton area). The Company has retained a 88.75% working interest (66.5% net revenue interest) in this well and its 160 acre drillsite. The #1 Howell is a 4,000 foot Frio test and will be drilled as soon as weather in the area permits.

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."