Operations Update: Natchez Island Field and Fayette Field

NATCHEZ, Miss., July 25, 2011 /CNW/ -- 
    



    NATCHEZ, Miss., July 25, 2011 /CNW/ --

    NATCHEZ ISLAND FIELD

    

Robert A. Kadane, President of KFG Resources Ltd, reported today that the Roundtree #1 well has successfully reestablished production in the field. The well was completed in the Nichols Sand of the Wilcox formation at 5775' flowing 101 BOPD, No Water, Flowing Tubing Pressure 550# on a  6/64th inch choke. It is planned to produce the well between 75 and 80 BOPD. KFG owns a 12.5% working interest in the well along with a 2.5% overriding royalty. At payout of all costs, KFG's working interest increases to 29.375% and the overriding royalty ceases. A decision will be made in about 60 days concerning drilling an offset. On another part of the 1500 acre lease the Roundtree #2 was drilled to 6000' and abandoned as a dry hole. KFG had virtually no financial exposure in the #2 well. A third well, the Roundtree #3, will be drilled in about 2 months in a different area of the acreage.

    

    FAYETTE FIELD

    

KFG has moved in and is drilling the Spring Hill L-T #1 to 9900' to test the Lower Tuscalossa formation. KFG owns a 100% working interest in the well(79.16% net) reverting to a 74.6% working interest (59.1%) at payout of all costs incurred to date. At the conclusion of the deep test the rig will drill a shallow Wilcox test-The Spring Hill #8--an east offset to the Company's #7 well completed in April 2011 for 70 BOPD.

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.

    




    




Mr. Robert A. Kadane, President of KFG Resources Ltd, [phone]

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