Stonefire Energy Corp. Announces 2007 Second Quarter Financial Results

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES.


Stonefire Energy Corp. (the "Corporation" or "Stonefire") (TSX VENTURE:SFE.A)
(TSX VENTURE:SFE.B) is pleased to announce that it has filed on SEDAR its
unaudited financial statements and related management's discussion and analysis
("MD&A") for the three month and six month periods ended June 30, 2007. Selected
operational and financial results are outlined below and should be read in
conjunction with Stonefire's unaudited financial statements and related MD&A
which can be found at www.sedar.com.




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Financial and Operating Highlights
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                                       Three months ended  Six months ended
                                            June 30, 2007     June 30, 2007
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($ except share amounts)                       (unaudited)       (unaudited)
FINANCIAL
Petroleum and natural gas revenues           $    354,852      $    747,264
Cash flow from (used in) operations(1)              9,702           (17,507)
Per share, basic and diluted(1)                      0.00              0.00
Capital expenditures                         $  4,362,435         8,302,638
Working capital deficit (end of period)                            (206,365)
Shareholders' equity (end of period)                           $ 17,189,599
Shares outstanding
 Class A                                                         15,265,000
 Class B                                                          1,012,000
Options                                                           1,421,000
Weighted average shares outstanding
 Class A                                       15,265,000        13,604,669
 Class B                                        1,012,000         1,012,000
Conversion of Class B shares(2)                 7,084,000         7,084,000
Weighted average shares outstanding
 - basic                                       23,361,000        21,700,669
Class A share trading
 High                                                          $       2.29
 Low                                                                   1.05
 Close                                                         $       1.25
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OPERATIONS
Production
 Natural gas liquids (bbls/d)                          20                19
 Natural gas (mcf/d)                                  361               391
 Total (boe/d @ 6:1)                                   80                85
Reference prices
 WTI (US$ per bbl)                           $      65.03      $      61.65
 AECO (Cdn$ per GJ)                                  6.70              6.86
Average selling price
 Natural gas liquids (per bbl)                      55.61             53.98
 Natural gas (per mcf)                               7.73              7.87
Operating netback (per boe @ 6:1)                   25.58             23.48
Cash flow netback (per boe @ 6:1)            $       1.33      $      (1.14)

(1) Management uses cash flow from operations (before changes in non-cash
    working capital) to analyze operating performance and leverage. Cash
    flow from operations as presented does not have any standardized meaning
    prescribed by Canadian generally accepted accounting principles (GAAP)
    and, therefore, may not be comparable with the calculation of similar
    measures by other entities.
(2) For the period ended June 30, 2007, the Class B shares are converted at
    the period-end Class A share price of $1.25 and added to the Class A
    shares to calculate basic shares outstanding.



2007 Second Quarter Corporate Highlights

- Added 2,880 gross acres of highly prospective Crown land. The Corporation's
gross land base increased by 15 percent to 21,600 gross acres (33.75 sections)
with an average working interest of 66 percent, all in the Edson exploration
area.


- In support of its drilling success in the second half of 2006 and first
quarter of 2007   and a growing land base, Stonefire approved the construction
of a 100 percent working interest, 5.5 mmscf per day capacity,
Stonefire-operated sweet gas plant in the Edson area at 10-28-53-16W5M.


- Plant design, major equipment orders, public and industry notification were
completed in Q2 2007 with all regulatory approvals received in July 2007.


- Licensed and made preparations to drill a 50 percent working interest,
Stonefire operated, 2,000 metre deep exploratory multi-zone natural gas well in
the McLeod area. This well was spud July 6, 2007.


- Averaged 80 boe per day net production (80 percent natural gas) and generated
positive cash flow from operations of $9,702 for the quarter.


- Spent $4.4 million of capital in the quarter with the majority spent on Crown
land ($1.9 million), natural gas plant equipment and compressors ($1.6 million)
and drilling and completions ($0.7 million).


- Initiated increases to the Corporation's bank credit lines in Q2. Approvals
obtained in July 2007 for an increase of $3 million to help finance the
construction of the Edson 10-28 gas plant.


President's Message

The second quarter of 2007 saw the Corporation continue to lay the foundation
for production growth and drilling success in its core Edson area. The
Corporation increased its land base in the Edson area by 15 percent through
Crown land sales. Stonefire announced its decision to proceed with the
construction of a 5.5 mmscf per day design capacity, 100 percent working
interest sweet gas plant in the Edson area at 10-28-53-16W5M. At the time of
this report, plant construction is well underway with a target start-up date of
late August 2007, which will allow previously drilled and tested, liquids-rich,
natural gas production of approximately 400 boe per day net to Stonefire to be
brought on production.


Also during the quarter Stonefire acquired an additional three sections of Crown
land at 100 percent working interest in the immediate vicinity of the 10-28 gas
plant, and negotiated an additional farm-in covering one section. Our drilling
inventory of multi-zone exploration and development wells adjacent to the 10-28
gas plant now stands at 17 wells, all at 100 percent working interest.


At McLeod a 50 percent working interest, Stonefire-operated, 2,000 meter deep
exploratory well was licensed and prepared for drilling in June 2007. Wet spring
weather delayed spud until early July 2007. Stonefire's year-to-date drilling
success rate is 100 percent for the two gross (1.5 net) exploratory wells
drilled and the company is on track to achieve its 2007 exit target production
rate of 600+ boe per day.


Subsequent to the quarter-end bank credit lines were expanded by $3 million to
$6 million total to help finance the 10-28 gas plant. Going forward the
Corporation will remain focused on expanding its production and operations in
its core Edson area. The addition of our first natural gas processing plant is a
significant milestone and a strategic measure that we fully expect will allow
Stonefire to achieve low operating costs, high netbacks and allow the orderly
development of the Corporation's growing inventory of multi-zone drilling
locations.


Stonefire Energy Corp. is an Alberta-based company formed to participate in oil
and gas exploration, development and acquisitions focusing in the West Central
region of Alberta. The Company's shares trade on the TSX Venture exchange under
the symbols SFE.A and SFE.B. The Company currently has 15,265,000 Class A shares
and 1,012,000 Class B shares outstanding.


As referred to above, to view a full copy of the Corporation's unaudited interim
financial results for the three-month and six-month periods ended June 30, 2007,
including the Corporation's unaudited financial statements and accompanying
MD&A, please refer to the SEDAR website at www.sedar.com.


Reader Advisory

This news release contains certain forward-looking statements, including
management's assessment of future plans and operations, and capital expenditures
and the timing thereof, that involve substantial known and unknown risks and
uncertainties, certain of which are beyond Stonefire's control. Such risks and
uncertainties include, without limitation, risks associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks, competition
from other producers, inability to retain drilling rigs and other services,
delays resulting from or inability to obtain required regulatory approvals and
ability to access sufficient capital from internal and external sources, the
impact of general economic conditions in Canada, the United States and overseas,
industry conditions, changes in laws and regulations (including the adoption of
new environmental laws and regulations) and changes in how they are interpreted
and enforced, increased competition, the lack of availability of qualified
personnel or management, fluctuations in foreign exchange or interest rates,
stock market volatility and market valuations of companies with respect to
announced transactions and the final valuations thereof, and obtaining required
approvals of regulatory authorities. Stonefire's actual results, performance or
achievements could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits, including the amount
of proceeds, that Stonefire will derive therefrom. Readers are cautioned that
the foregoing list of factors is not exhaustive. All subsequent forward-looking
statements, whether written or oral, attributable to Stonefire or persons acting
on its behalf are expressly qualified in their entirety by these cautionary
statements. Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and Stonefire does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required by applicable securities laws."


Petroleum and natural gas volumes are converted to an equivalent measurement
basis referred to as a "barrel of oil equivalent" (boe) on the basis of 6
thousand cubic feet of natural gas equalling 1 barrel of oil. This is based on
an energy equivalency conversion method applicable at the burner tip and does
not necessarily represent a value equivalency at the wellhead. Readers are
cautioned that boe figures may be misleading, particularly if used in isolation.


To request a free copy of Stonefire's financial report or if you would like to
be put on Stonefire's mailing list please contact Ronald Williams, Vice
President, Finance and CFO at [e-mail].