Stonefire Energy Corp. Announces 2009 Third 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 nine month periods ended September 30, 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

----------------------------------------------------------------------------
                           Three months ended             Nine months ended
                  Sep 30, 2009   Sep 30, 2008   Sep 30, 2009   Sep 30, 2008
----------------------------------------------------------------------------
($ except share
 amounts)           (unaudited)    (unaudited)    (unaudited)    (unaudited)
FINANCIAL
Petroleum and
 natural gas
 revenue            $3,577,003    $ 5,385,975  $  11,993,627  $  12,796,008
Funds flow from
 (used in)
 operations (1)      1,964,972      2,795,950      5,880,523      5,945,661
 Per share, basic (1)     0.08           0.12           0.23           0.25
Net income
 (loss)                (37,193)       781,426       (368,391)     1,343,673
 Per share, basic         0.00           0.03          (0.01)          0.06
Capital
 expenditures       $3,618,177    $ 8,688,403      9,951,068     16,364,955
Working capital
 deficit (end of
 period)                                       $ (23,438,763) $ (18,111,215)
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                                           1,785,000      1,775,000
Weighted average
 shares
 outstanding
 Class A            18,202,500     18,202,500     18,202,500     18,202,500
 Class B             1,012,000      1,012,000      1,012,000      1,012,000
 Conversion of
  Class B shares
  (2)                6,165,305      4,458,270      6,165,305      4,458,270
                   ---------------------------------------------------------
Weighted average
 basic shares
 outstanding        25,379,805     23,672,770     25,379,805     23,672,770
Class A share
 trading
 High                                          $        2.00  $        2.75
 Low                                                    0.95           0.65
 Close                                         $        1.41  $        1.85
----------------------------------------------------------------------------
OPERATIONS
Production
 Crude oil
 (bbls/d)                  183             81            232             27
 Natural gas
  liquids (bbls/d)         177            137            185            121
 Natural gas
  (mcf/d)                5,325          4,318          5,418          3,369
 Total (boe/d at
  6:1)                   1,247            938          1,320            710
Average selling
 price
 Crude oil (per
  bbl)              $    68.38    $    111.14  $       55.64  $      111.14
 Natural gas
  liquids (per
  bbl)                   49.67          95.89          45.32          92.90
 Natural gas
  (per mcf)               3.29           8.42           4.18           9.63
Operating
 netback (per boe
 at 6:1)                 20.63          37.54          20.05          37.62
Funds flow
 netback (per boe
 at 6:1)            $    17.13    $     32.40  $       16.32  $       30.56

(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 September 30, 2009, the Class B shares are
    converted at the period-end Class A share price of $1.41 (2008 - $1.85)
    and added to the Class A shares to calculate basic shares outstanding.
(3) Sales of crude oil by the Corporation commenced in August 2008.



2009 Third Quarter Corporate Highlights


- Third quarter production averaged 1,247 boe per day, a 33 percent increase
over Q3 2008 production of 938 boe per day.


- The Corporation continued to achieve very low operating and cash costs
(operating, transportation, interest and general and administrative costs),
which came in at $4.55 per boe and $9.44 per boe, respectively, in the third
quarter. The operating cost per boe represents a decline of 5 percent on a
unit-of-production basis from the third quarter of 2008 and is inline with our
target of $4.50 per boe for 2009.


- Funds flow from operations for the third quarter was $2 million or $17.13 per
boe in spite of some of the lowest natural gas prices seen in the last seven
years, which averaged just $2.79 per gigajoule at AECO for the quarter.


- The Corporation's credit facilities were reviewed in September and remain
unchanged at a total of $30 million, which is comfortably above the
Corporation's combined net debt and working capital deficiency of $23.4 million
at September 30, 2009.


- The Corporation drilled two 100 percent working interest wells at Edson during
the third quarter. The first, a natural gas well, was tied in and is currently
producing approximately 110 boe per day of liquids-rich sweet natural gas. The
second well has been equipped as a pumping oil well and is producing at modest
rates of 10 to 20 barrels per day. Although not prolific, the well has confirmed
a 1.5-mile extension of Stonefire's 2008 light oil pool discovery at Edson which
may lead to further drilling with vertical and/or horizontal wells. 


- Added five gross (3.5 net) sections of undeveloped land during the quarter,
which has increased the Corporation's current total land base to approximately
60 sections with an average working interest of approximately 73 percent.


- Exiting the third quarter Stonefire's drilling inventory stands at 42 gross
(31.5 net) drilling locations. Along with these vertical drilling locations
Stonefire has identified the potential for 30 gross (26 net) horizontal drilling
locations on its lands. These horizontal locations target five Deep Basin sweet
natural gas zones and two light oil zones. 


President's Message

It is my pleasure to deliver what will likely be my last President's message to
the shareholders of Stonefire Energy Corp., due to the recently announced
acquisition agreement with Angle Energy Inc. Over the last four years it has
been a privilege and an honour to be CEO of a full-cycle exploration company
that has gone from a standing start with no land or production, through
exploration and development drilling that included several substantial natural
gas and oil discoveries, to a very focused, high-quality Deep Basin production
company generating solid cash flow with low costs and manageable debt.    


The Corporation is pleased to report continued operational success in the third
quarter in spite of very low natural gas prices. Production averaged 1,247 boe
per day, an increase of 33 percent over the third quarter of 2008 but lower than
the 1,369 boe per day average for the second quarter of 2009. Third quarter
production was reduced in part by our decision to shut-in approximately 45 boe
per day at Bronson for September due to low natural gas prices, by a third-party
gas plant's outage in July at McLeod and due to general production declines not
being fully offset by new production. The tie-in of two low-rate gas wells at
McLeod was also deferred due to low natural gas prices. In spite of the lowest
natural gas prices seen in nearly seven years the Corporation achieved very
respectable operating netbacks of $20.63 per boe for the quarter, thanks in part
to our low cost structure, declining royalties and high liquids content of our
natural gas. 


Operating costs for the quarter averaged $4.55 per boe, in line with our
full-year target of $4.50 per boe. Total cash costs averaged $9.44 per boe and
total royalties were 14.7 percent of sales revenue. Funds flow from operations
for the quarter totalled $2 million or $17.13 per boe.  During the quarter the
Corporation's credit facilities were reviewed and were left unchanged at $30
million. Total capital spent during the quarter was $3.6 million bringing total
net debt and working capital deficit to $23.4 million at the end of the quarter.
This is still comfortably within the Corporation's $30 million total credit
facilities. 


OPERATIONS

During the third quarter the Corporation's main focus of activity was the
drilling and completion of two 100 percent working interest wells at Edson. The
first well was completed in two Deep Basin natural gas zones and is currently
producing liquids-rich sweet natural gas at approximately 110 boe per day. This
well lies close to and has been tied-in to Stonefire's 100 percent working
interest Edson gas plant. 


The second well targeted a light oil zone and was a 1.5-mile step-out to the
Corporations mid-2008 Edson light oil pool discovery. The oil zone was completed
in this new well and is producing at approximately 10 to 20 barrels per day of
39 degrees API oil. This oil rate is lower than expected due to fewer natural
fractures and lower than expected permeability in the reservoir. More
importantly, though, the well has proven up a large extension to the light oil
pool with the potential for additional development oil wells including a
possible horizontal oil well. This well also encountered three highly
prospective natural gas zones that can be completed as gas prices recover.  


The Corporation continued to expand its land base with the purchase of five
gross (3.5 net) sections of undeveloped land at Crown land sales in the Edson
and McLeod fields. The Corporation's total land base currently stands at
approximately 60 gross sections with an average working interest of 73 percent.
Our drilling inventory has grown to 42 gross (31.5 net) high-quality, multi-zone
drilling locations all Stonefire-operated. During the third quarter Stonefire
conducted a technical review of its lands and identified potential for up to 30
gross (26 net) horizontal wells targeting five sweet natural gas zones and two
light oil zones. Many of these locations are covered by 3D seismic and benefit
from adjoining vertical well control. 


THE TRANSACTION 

On November 19, 2009 Stonefire entered into an agreement to sell the Corporation
subject to certain conditions. This all-cash purchase offer of $2.00 per A share
and $10.00 per B share represents a significant premium of 25.6 percent and 43.7
percent over the 10 day trading average for the A and B shares respectively. The
nature of this transaction offers Stonefire's shareholders maximum liquidity
without exposure to market and commodity price risk going forward. We believe
that amidst the current low commodity price environment and uncertain equity
markets this provides our shareholders a timely and profitable moment to exit
and redeploy capital. 


Accordingly Stonefire's board has unanimously approved the proposed transaction
and has recommended that shareholders accept the offer. All of the directors,
senior officers, management and certain other shareholders have entered into
lock-up agreements which represent approximately 48 percent of the issued and
outstanding class A shares on a diluted basis. Full details of the offer will be
included in a takeover bid circular and a directors circular to be mailed to
shareholders on or about December 4, 2009.  The take-over is expected to close
in early to mid January 2010.   


Looking back Stonefire has enjoyed many successes and highlights over the last
four years. The start-up of our 100 percent working interest gas plant at Edson
in September 2007, the drilling of our light oil pool discovery at Edson in July
2008 which came on production as a flowing oil well at test rates in excess of
350 bbls per day, the drilling of Edson gas wells with four to six gas zones per
well are a few of them.


These accomplishments and the value created for our shareholders were made
possible by the skilled and dedicated Stonefire management and technical team,
the finest that I've worked with in my 23 years of experience in the industry.
As an exploration-focused company recognition must be given to Stonefire's
explorationists, Fred Laudel, V.P. Exploration, and Bruce Shepard, Exploration
Manager, who together are responsible for discovering over 7 million boe of
light oil and natural gas reserves for Stonefire, all at industry leading
finding and development costs. I'd also like to thank the Board of Directors for
their guidance and wise counsel and Cormark Securities Inc, our financial
advisors. The shareholders of Stonefire showed great patience and support
through what have been especially challenging times for the junior oil and
natural gas industry over the last three years. We thank all of you for your
support. 


Stonefire Energy Corp. is an Alberta-based corporation formed to participate in
oil and gas exploration, development and acquisitions focusing in the West
Central region of Alberta. The Corporation's shares trade on the TSX Venture
Exchange under the symbols SFE.A and SFE.B. The Corporation 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 September 30, 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,
uncertainties, and assumptions certain of which are beyond Stonefire's control.
Such risks, uncertainties, and assumptions 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.


Not for distribution to United States newswire services or for dissemination in
the United States.


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].