KFG Runs Production Casing On Spring Hill No. 2

KFG Resources President, Robert A. Kadane, reported that KFG Resources Ltd.'s wholly owned subsidiary, KFG Petroleum Corporation, has drilled to completion and is running production casing on its Spring Hill No. 2 well in the Fayette Field, Jefferson County, Mississippi.

An east offset to the Company's Spring Hill No. 1 well, the Spring Hill No. 2 well, encountered nine feet of 4,600-foot oil sand from 3,942 feet to 3,951 feet and, if successfully completed, will go on production in early September 2009. The Company's Spring Hill No. 1 well went on production in late July, 2009, and is presently producing at a stabilized rate of 50 barrels of oil per day. The Company's Spring Hill No. 4, a north offset to the No. 1 well, was completed a dry hole. Casing has been set in this well to 3,300 feet for conversion to a salt water disposal well.

KFG has approximately 4,100 acres of leases in the area and owns a 100% working interest (79.16% net revenue interest) in the Spring Hill No. 2 well, reverting to a 74.9% working interest (59.4% revenue interest) after payout of all drilling, seismic, land, exploration, development, taxes, and operating costs.