Fayette Field Update

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NATCHEZ, Miss., Jan. 18, 2011 /CNW/ -- KFG Resources President Robert A. Kadane reported that KFG's wholly-owned subsidiary, KFG Petroleum Corporation, continues to produce net to the company, before royalty and severance taxes, 135 BOPD from the Fayette Field, Jefferson County, Mississippi. December 2010 was the best month in the Company's history, grossing approximately $277,000 US. KFG owns a 100% working interest (79.16% net) in all of the Spring Hill wells and surrounding acreage reverting to a 74.6% working interest (59.1% net) after payout of all seismic, drilling, land, exploration, development, taxes and operating costs...currently $1,600,00 US.

The Company is currently re-entering the Smith #30 well, about 1.5 miles southwest of Spring Hill, in an attempt to put the well on production from the 4600' Sand -- the zone cored virgin oil sand between shale but was never produced. Also, the Company has staked location and will drill, when weather permits, another shallow Wilcox test at Spring Hill--the Spring Hill #7. At present, a deep test (10,000') is planned to test the Lower Tuscalossa formation in the late Spring of 2011.

The Company's common shares are listed on the TSX Venture Exchange, Vancouver, B.C. trading symbol "KFG". For additional information please contact Mr. Kadane at (303) 825-7080.

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

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SOURCE KFG Resources Ltd.

For further information: Robert A. Kadane, President of KFG Resources Ltd., +1-303-825-7080 Web Site: http://www.kfgresources.com


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