"KFG Resources Announces Participation in Two Wells

Mr. Robert A. Kadane, President of KFG Resources Ltd., announced today that its announced today that its wholly-owned subsidiary, KFG Petroleum Corporation, Natchez, Mississippi, will participate in the drilling of two exploratory wells, both in Adams County, Mississippi.  The first well, the ROC-New Era Plantation #1, is a re-entry in the Pentagon Field, on an 80 acre lease.  Shamrock Drilling Company, also a wholly-owned subsidiary of the Company, will act as contract driller on this well, which is expected to be drilled to 3,350 feet.  The Company will retain a 30% working interest (22.5% net revenue interest) in this well.

The second well, the Ayers 6A in the LaGrange Field, will also be drilled by Shamrock on a 40 acre unit.  This well is expected to be drilled to a depth of 6,400 feet.  The Company will retain an 8.5% working interest (6.375% net revenue interest) in this well.

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."