SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM 8-K

                              CURRENT REPORT
                    PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934

    Date of Report (Date of Earliest Event Reported): January 24, 2002

                           KESTREL ENERGY, INC.
          (Exact Name of Registrant as Specified in its Charter)

       Colorado                   0-9261                     84-0772451
(State of Incorporation)    (Commission File)             (IRS Employer ID
                                 Number)                      Number)

                        999 18th Street, Suite 2490
                          Denver, Colorado  80202
                 (Address of Principal Executive Offices)

                              (303) 295-0344
                      (Registrant's Telephone Number,
                           including Area Code)

ITEM 5.  OTHER EVENTS

On January 24, 2002, the Board of Directors of Kestrel Energy, Inc.(the
"Company") agreed to extend the Warrant exercise period for its Common
Stock Purchase Warrants from February 4, 2002 to March 10, 2003 and to
reduce the exercise price from $2.50 to $1.25.  Except as set forth below,
each Warrant, when exercised, entitles the registered holder to purchase
from the Company one share of Common Stock at a price of $1.25 per share.

The Company filed a registration statement on Form S-3 which 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.  The Warrants will
now expire on March 10, 2003, unless earlier redeemed by the Company.

On February 1, 2002, the Company announced the foregoing extension of the
exercise period for the Common Stock Purchase Warrants and the reduction
in the exercise price in a press release, a copy of which is attached
hereto as Exhibit 99.1 and incorporated by reference herein.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

  (a)     None

  (b)     None

  (c)     Exhibits

          99.1      Press Release dated February 1, 2002


Date:  February 1, 2002            KESTREL ENERGY, INC.


                                   By:/s/Barry D. Lasker
                                      Barry D. Lasker, President