KFG Resources Announces Operations Update

NATCHEZ, Miss., June 6, 2012 /CNW/ - Fayette Field, Jefferson County, Mississippi

Current production from the Fayette Field is approximately 100 BOPD from six producing wells. A new and experimental production enhancement technique was recently performed on the Spring Hill #1 well. Four laterals were drilled into the 4600' Sand using coiled tubing and water under high pressure. There was a modest improvement in production to approximately 10 BOPD from this zone. We continue to monitor this well and will decide in the coming months if results justify further attempts in the 4600' Sand, which is present in many other wells in the area. Meanwhile the Stewart A Sand remains behind pipe in the Spring Hill #1 well.

The Spring Hill #7 is back on production after it was repaired and is currently producing between 8 and 10 BOPD. The Spring Hill #9 well was drilled at the extreme south end of the Spring Hill feature and was plugged and abandoned as a dry hole. The 26-1 well drilled 2 miles south of Spring Hill is currently averaging 15 BOPD. As previously stated the 3D Seismic is being reprocessed and KFG will drill two obligation wells based on the new survey in the fall of 2012.

Concordia Parish, Louisiana

The Roundtree #1 well finally received all permits for salt water disposal and was put on production----- currently producing about 25 BOPD. The recently drilled Roundtree 1A is currently being completed. A salt water disposal well will also be required for this well. The permitting process will start as soon as it is determined there is a sufficient oil cut for commercial production. KFG owns a 12.5% working interest in the Roundtree wells which will increase to 29.375% working interest at payout.

New Projects

KFG has assembled three(3) new lease blocks---two(2) in Concordia Parish, Louisiana and one(1) in Adams County, Mississippi. The plan is to drill test wells on these prospects this summer and early fall of 2012.

The Company's common shares are listed on the TSX Venture Exchange, Vancouver, B. C. trading symbol "KFG".

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

SOURCE KFG Resources Ltd

For further information:

Mr. Robert A. Kadane, President, +1-303-825-7080

Profil de l'entreprise

KFG Resources Ltd

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