KFG Resources to Test Fayette Offset's Production

Mr. Robert A. Kadane, President of KFG Resources announced the Company's subsidiary, KFG Petroleum Corporation of Natchez, Mississippi, has run 4,137 feet of production casing in its Spring Hill No. 5 Well, Fayette Field, Jefferson County, Mississippi. The Spring Hill No. 5, a south offset to the Company's Spring Hill No. 1 Well, is structurally flat to the No. 1 Well and has all three of the production zones found in the No. 1 Well and in the Company's second well, the Spring Hill No. 2, also in the Fayette Field. KFG Petroleum will attempt to complete and production test the No. 5 well in the '4,600 Foot Sand' at a depth of 3,930 feet. If successful, it is anticipated that the No. 5 well will be producing pipeline oil by early April, 2010. Mr. Kadane noted that the No. 1 and No. 2 wells will continue to produce a total between 60 and 70 bopd.

KFG Petroleum Corporation has approximately 4,100 acres of leases in the area and owns a 100% working interest (79.16% net) in the Spring Hill wells including this offset location No. 5 reverting to 74.9% working interest (59.4% interest) after payout of all drilling, seismic, land, exploration, development, taxes and operating expenses.