Stonefire Energy Corp. Announces 2009 First 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 period ended March 31, 2009. 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.




Financial and Operating Highlights

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                                                    Three months ended
                                               Mar 31, 2009    Mar 31, 2008
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FINANCIAL                                        (unaudited)     (unaudited)
($ except share amounts)
Petroleum and natural gas revenue             $   4,424,367   $   2,450,738
Funds flow from operations (1)                    1,878,889         715,059
 Per share, basic (1)                                  0.07            0.03
Net loss                                           (197,535)       (146,273)
 Per share, basic                                     (0.01)          (0.01)
Capital expenditures                              4,869,618       4,021,672
Working capital deficit (end of period)       $ (22,358,947)  $ (10,998,534)
Shares outstanding (end of period)
 Class A, including shares under share 
  purchase loans                                 18,265,000      18,265,000
 Class B                                          1,012,000       1,012,000
 Options                                          1,775,000       1,775,000
Weighted average shares outstanding
 Class A                                         18,202,500      18,202,500
 Class B                                          1,012,000       1,012,000
 Conversion of Class B shares (2)                 9,108,000       8,188,000
                                              ------------------------------
Weighted average basic shares outstanding        28,322,500      27,402,500
Class A share trading
 High                                         $        1.30   $        1.25
 Low                                                   0.95            0.65
 Close                                        $        1.00   $        1.10
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OPERATIONS
Production
 Crude oil (bbls/d)                                     302               -
 Natural gas liquids (bbls/d)                           178              98
 Natural gas (mcf/d)                                  5,175           2,209
 Total (boe/d at 6:1)                                 1,342             466
Reference prices
 WTI (US$ per bbl)                            $       43.08   $       97.90
 AECO (Cdn$ per GJ)                                    4.66            7.49
Average selling price
 Crude oil (per bbl)                                  44.68               -
 Natural gas liquids (per bbl)                        39.45           74.96
 Natural gas (per mcf)                                 5.54            8.88
Operating netback (per boe at 6:1)                    19.75           28.76
Funds flow netback (per boe at 6:1)           $       15.56   $       16.86

(1) Management uses funds flow from operations (before changes in non-cash
    working capital) to analyze operating performance and leverage. Funds 
    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 March 31, 2009, the Class B shares are converted at
    the period-end Class A share price of $1.00 (2008 - $1.10) and added to
    the Class A shares to calculate basic shares outstanding.



2009 First Quarter Corporate Highlights

- Average production for the quarter was 1,342 boe per day, an all time high for
the Corporation and a 188 percent increase over Q1 2008 production of 466 boe
per day. The Q1 2009 production mix was 23 percent light oil, 13 percent natural
gas liquids (NGLs) and 64 percent sweet natural gas.


- Funds flow from operations was $1.88 million, a 163 percent increase over Q1
2008. Quarterly funds flow of $0.07 per share represented a period-over-period
increase of 133 percent. The strong increase in funds flow was due to higher
production, the recent addition of premium priced light sweet crude oil to
Stonefire's product mix and reduced operating costs per unit of production,
offset in part by lower commodity prices period-over-period.


- Continued drilling success with the drilling of one, 100 percent working
interest, multi-zone gas well at Edson in February 2009 to a total measured
depth of 2,391 metres. The well commenced production through Stonefire's Edson
gas plant on April 1, 2009 at approximately 1 mmscfd (million standard cubic
feet per day) plus 25 bbls per mmscf of NGL.


- Operating costs for the quarter were $4.49 per boe, a decline of 52 percent
from Q1 2008 costs of $9.33 per boe and in line with Stonefire's 2009 full-year
target of $4.50 per boe. Transportation costs averaged $1.20 per boe in the
quarter, down by 33 percent from Q1 2008 costs of $1.78 per boe.


- Bank lines were reviewed after the end of the quarter and remain unchanged at
$30 million. Current net debt of $22.4 million is comfortably below the bank
line limit.


- Completed a 6-kilometre addition to the Stonefire-operated gas gathering
system at McLeod and installed a group metering station. Stonefire now operates
approximately 15 kilometres of gas gathering, a group metering station and
wellsite facilities in the McLeod area. The McLeod area contributed
approximately 20 percent of Stonefire's total production during the quarter.


- Completed a 100 percent working interest, proprietary 10.4-square-kilometre 3D
seismic program over a portion of Stonefire's 100 percent working interest lands
at Edson.


- Added 1,600 acres (2.5 sections) of 100 percent working interest land at Edson
bringing Stonefire's total contiguous land holdings in the Edson area to 15.5
sections, all at 100 percent working interest.


- Achieved operating netbacks of $19.75 per boe. Lower netbacks than in previous
quarters resulted mainly from reduced commodity prices. Declining operating
costs helped offset reduced commodity prices.


- Stonefire's high-quality drilling inventory continued to increase through the
quarter and at the end of Q1 stood at 49 gross locations with an average working
interest of 82 percent. All future locations are Stonefire-operated.


President's Message

It is a great pleasure to report on Stonefire's activities during the first
quarter of 2009. Stonefire continued to achieve success in executing its
business growth plan, delivering record production for the seventh consecutive
quarter, continued drilling success and declining operating costs per unit of
production and strong growth in funds flow in both dollar and per share terms.
We're particularly pleased about the latter result given lower commodity prices.


Average production for the quarter was 1,342 boe per day an all-time high, and
included 36 percent light oil and NGL. First quarter production was up by 188
percent over the first quarter of 2008. First quarter production also increased
by 4 percent from the fourth quarter of 2008 even though Stonefire delayed
bringing on new production at Edson beyond the quarter to take advantage of the
Alberta New Well Royalty reduction effective April 1, 2009.


The Corporation had continued drilling success with the drilling of one, 100
percent working interest multi-zone gas well at Edson in the first quarter. The
well was spud February 7 and drilled to a measured depth of 2,391 metres. Five
Deep Basin gas zones were completed with two limited-entry fracture treatments
and the well commenced production on April 1st, 2009 through Stonefire's Edson
gas plant at approximately 1.0 mmscfd plus liquids. Under the new provincial
incentive program the well will be subject to a 5 percent Crown royalty for the
next year.


During the quarter the Stonefire-operated McLeod gas gathering system was
expanded by 6 kilometres and a group metering station was installed. These
projects removed several production bottlenecks and are forecast to reduce the
McLeod area's per unit of production operating costs by approximately 20
percent. Production from the McLeod area now accounts for approximately 20
percent of Stonefire's total production and is expected to continue growing.


At Edson we expanded Stonefire's land base by 2.5 sections in the quarter
through a purchase of Crown mineral rights from a third party. It now stands at
15.5 sections of 100 percent working interest contiguous land. The 3D seismic
program shot at Edson in the first quarter has identified several multi-zone
drilling opportunities and has helped expand the Corporation's drilling
inventory to 49 gross wells.


During the quarter natural gas prices continued to decline reaching six-year
lows largely driven by the world wide economic slowdown, reduced industrial gas
demand in North America and continued supply growth due to prolific results in
U.S. unconventional gas shale plays, resulting in high levels of gas storage
relative to seasonal averages. Along with the decline in commodity prices we've
seen a dramatic drop in drilling in North America, with the drilling rig count
now down by nearly 50 percent from a year ago. This is normally a strong sign
that natural gas supply will soon decline and will help stabilize gas prices in
the near future. The current wild cards, however, are further slides in gas
demand, very high levels of storage and production adds from high-graded U.S.
unconventional shale gas drilling projects that continue amidst the price slump.
These factors are offset by increasing demand for natural gas for electrical
generation in North America, the start of the summer cooling season in the U.S.
and high initial production decline rates for new shale gas horizontal wells.
The interplay of all these factors makes it difficult to predict the exact
timing of a price rebound for natural gas.


In the meantime, therefore, cost control and protecting the corporate balance
sheet become paramount issues for any oil and natural gas company. On both these
fronts Stonefire is well positioned. Stonefire is a low-cost operator, with
first quarter operating costs of $4.49 per boe and transportation costs of $1.20
per boe. These costs will likely enable Stonefire to be in the top decile of
energy companies in Western Canada. In part this stems from our high-quality,
liquids-rich sweet gas production base in the Deep basin area of west central
Alberta. In addition, our control of gas processing facilities, high working
interest and operatorship of 99 percent of our production make a strong
contribution to our efficiencies and we believe will help sustain low operating
costs going forward. Stonefire also operates all its capital projects and can
react quickly to market conditions by either increasing or decreasing capital
spending.


Our bank line with the National Bank of Canada was reviewed after the end of the
first quarter and remains unchanged at $30 million. Net debt at the end of the
first quarter stood at $22.4 million. The Corporation currently has nearly $8
million of unused borrowing capacity available. Our debt level is forecast to
decline over the next several months due to limited second quarter capital
spending that should be exceeded by funds flow.


As we exercise careful balance sheet management and conservative capital
spending through this cyclical down phase, Stonefire nonetheless intends to
remain active in the field in 2009. The economics of our Deep Basin gas and
light oil drilling opportunities are positive even at current commodity pricing.
Stonefire is preparing drilling locations for up to an additional 5 gross (4.5
net) wells in 2009 to be drilled in the third and fourth quarters. These wells
are all close to Stonefire-operated infrastructure and will benefit from the new
Alberta drilling royalty credit and new well incentive program along with
declining service costs. Our capital budget for the year is forecast at
approximately $11.5 million, of which $4.9 million was spent in the first
quarter. The budget will be funded mainly from cash flow and will be adjusted as
dictated by our cash flow and commodity prices. In spite of the current
challenging economic environment the Management team at Stonefire is confident
and is working to achieve continued success in 2009.


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 18,265,000 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
financial results for the period ended March 31, 2009, including the
Corporation's unaudited financial statements and accompanying MD&A, please refer
to the SEDAR website at www.sedar.com or on the Corporation's website at
www.stonefire-energy.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]