"Mr. Robert A. Kadane, President of KFG Resources Ltd., announced today that the Company had participated in a successful wildcat well in Forest County, Mississippi, the #1 Weyerhauser.  The well, which was contract drilled by the Company's wholly-owned subsidiary, Shamrock Drilling, Inc., Natchez, Mississippi, was completed in the Lower Tuscalosa formation from 8,290 feet to 8,302 feet, with flowing tubing pressure of 2,500 pounds on a 12/64^th choke, at 1,900,000 cubic feet of gas per day.  It is anticipated that this well will be on production by mid-December, 2004, and it is planned to produce the well at a rate of 1,200,000 cubic feet of gas per day, plus an undetermined amount of condensate.  The Company's wholly-owned subsidiary, KFG Petroleum Corporation, also of Natchez, will act as operator of the well.  The Company has a 8.2% working interest before payout (7.0125% after payout) and a net interest of 6.1875% before payout (5.2594% interest after payout) in this well and 525 acres surrounding the wellsite.  It is not contemplated that additional development wells will be drilled.

Mr. Kadane also reported that the Company had participated in a second well, the #1 Harvey in Pearl River County , Mississippi, which also was contract drilled by Shamrock, which the company had a 6.25% working interest, which resulted in a dry hole.

The Company's common shares are listed on the TSX Venture Exchange, Vancouver, B.C., trading symbol "KFG".  For additional information, please contact Mr. Robert A. Kadane, President, at (303) 825- 7080.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release."