EXHIBIT 99.1


FOR IMMEDIATE RELEASE:                                               NEWS
February 1, 2002                                              Nasdaq-KEST


            KESTREL ENERGY EXTENDS EXERCISE PERIOD FOR WARRANTS

     Denver, Feb. 1 - Kestrel Energy, Inc. (Nasdaq, SmallCap-KEST), an oil
and gas exploration and production company, today announced that its Board
of Directors approved the extension of the exercise period for its Common
Stock Purchase Warrants from February 4, 2002 to March 10, 2003, and
reduced the exercise price for the Warrants from $2.50 to $1.25.  The
Warrants were issued to holders of the Company's common stock as dividends
in February of 2000.

Each warrant entitles the holder to purchase one share of Kestrel common
stock at an exercise price of $1.25.  The Company filed a registration
statement on Form S-3 that was declared effective by the Securities and
Exchange Commission on March 10, 2000.  The Form S-3 registered the
subsequent resale of the Warrants and the sale of the shares of Common
Stock underlying the Warrants.

Under certain circumstances, the Company may redeem the Warrants for $0.01
per Warrant at any prior to the expiration date, provided that a
registration statement covering the Warrant shares is in effect.

"This extension of the Warrant exercise period will give our shareholders
an additional period of time for them to have the opportunity to increase
their ownership participation in the Company," said Barry D. Lasker,
president.


Headquartered in Denver, Kestrel has producing properties in Louisiana,
New Mexico, Oklahoma, South Dakota, Texas and Wyoming.

Statements made in this press release that are not historical facts may be
forward-looking statements.  Actual results may differ materially from
those projected in any forward-looking statement.  There are a number of
important factors that could cause actual results to differ materially
from those anticipated or estimated by any forward-looking information.
In addition, while the Company's current plans are to drill a well and
develop the property cited herein at the time and in the manner described,
various factors, including but not limited to actual drilling results,
equipment availability or breakage, financial or other problems, could
change those plans  A description of the risks and uncertainties which are
generally attendant to Kestrel  Energy and its industry and other factors
which could affect the Company's financial results are included in the
Company's report to the Securities and Exchange Commission on Form 10-K.



                                 CONTACTS:
                           Kestrel Energy, Inc.
                          Barry Lasker, President
                              (303) 295-0344
                                  E-mail:
                         mtemple@kestrelenergy.com