KFG's 26-1 Well Completed at Fayette

NATCHEZ, Miss., Jan. 18, 2012 /CNW/ - Fayette Field, Jefferson County, Mississippi

KFG Resources President, Robert A. Kadane, reported that KFG's wholly-owned subsidiary, KFG Petroleum Corporation, has opened up a new area within the limits of the old Fayette Field. Located two miles southwest of Spring Hill, the Company's 26-1 well has been completed in the Stewart B Sand of the Wilcox formation at 3900'. Eight feet of oil sand was encountered and the well was completed pumping 29 BOPD of 41 gravity sweet crude oil. Production appears to be improving and further updates will be provided. A virgin reservoir in the 4600' Sand is behind pipe. A north offset will be drilled in the Spring of 2012. Also, at Fayettte a complete review of all seismic is being done with all the new well control. Another shallow Wilcox well due south of Spring Hill will be drilled in the spring of 2012 to test a new shallow feature.

Louisiana
The Company is waiting for approval of its salt water disposal well before the Roundtree #1 well can be produced to its full potential. It is expected by March 1, 2012. Also, in Louisiana several new projects are being leased for a new program to start by the summer 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:

CONTACT: Robert A. Kadane, President of KFG Petroleum Corporation, +1-303-825-7080


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