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 

KFG Resources Ltd


CONTACT:  Mr. Robert A. Kadane, President, [phone] 


    

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