Stonefire Energy Corp. Announces Year End 2008 Financial Results and Files Its NI 51-101 Disclosure

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
audited financial statements, related management's discussion and analysis
("MD&A") and its Annual Information Form for the year ended December 31, 2008.
The Corporation has also filed today its reserves data and other oil and gas
information for the year ended December 31, 2008 as mandated by National
Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Selected
operational and financial results are outlined below and should be read in
conjunction with Stonefire's audited financial statements and related MD&A.
Copies of these filings can be found at www.sedar.com.




Financial and Operating Highlights

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                         Three months ended               Year ended       
                     Dec 31, 2008  Dec 31, 2007  Dec 31, 2008  Dec 31, 2007
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($ except
 share amounts)        (unaudited)   (unaudited)     (audited)     (audited)
FINANCIAL
Petroleum and natural
 gas revenues         $ 5,684,332   $ 1,720,144  $ 18,480,340   $ 2,880,146
Funds flow from
 (used in)
 operations(1)          3,493,187       673,994     9,438,848       632,351
  Per share, basic(1)        0.13          0.03          0.36          0.03
Net income (loss)       1,052,428       343,164     2,396,101      (399,404)
  Per share, basic           0.04          0.01          0.09         (0.02)
Capital expenditures  $ 4,750,190   $ 4,850,234    21,115,145    18,731,496
Working capital
 deficit (end of
 year)                                           $(19,368,218)  $(7,691,921)
Shares outstanding
 (end of year)
  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    16,701,821    18,202,500    14,803,815
  Class B               1,012,000     1,012,000     1,012,000     1,012,000
  Conversion of Class
   B shares(2)          6,772,615     9,108,000     6,772,615     9,108,000
                       -----------------------------------------------------
Weighted average shares
 outstanding - basic   25,987,115    26,821,821    25,987,115    24,923,815
Class A share trading
  High                                           $       2.75   $      2.29
  Low                                                    0.65          0.72
  Close                                          $       1.30   $      0.80
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OPERATIONS
Production
  Crude oil (bbls/d)          248             -            83             -
  Natural gas liquids
   (bbls/d)                   185           102           137            42
  Natural gas (mcf/d)       5,148         1,629         3,816           735
  Total (boe/d at 6:1)      1,291           373           856           164
Average selling price
  Crude oil (per bbl) $     59.36   $         -  $      72.13   $         -
  Natural gas liquids
   (per bbl)                45.89         70.72         76.92         65.90
  Natural gas (per mcf)      7.49          7.07          8.91          7.00
Operating netback (per
 boe at 6:1)                33.36         25.68         36.01         23.88
Funds flow netback (per
 boe at 6:1)          $     29.41   $     19.64  $      30.13   $     10.56

(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 year ended December 31, 2008, the Class B shares are converted
    at the year-end Class A share price of $1.30 (2007 - $1.00) and added
    to the Class A shares to calculate basic shares outstanding.



- Average production for 2008 was 856 boe/d, an all-time high for the
Corporation and a 422 percent increase over 2007 average production of 164
boe/d. Average production for 2008 also exceeded the production target of 800
boe/d set early in 2008.


- Stonefire achieved a December 2008 production rate of 1,342, an all-time high
for the Corporation and a 248 percent increase over December 2007 production of
386 boe/d.


- Increased production volumes drove strong growth in funds flow from
operations. Annual funds flow was $9.4 million, a year-over-year increase of
1,390 percent in dollar terms and 1,100 percent on a per share basis. Fourth
quarter 2008 funds flow was $3.5 million ($0.13 per share), an increase of 418
percent in dollar terms and 333 percent per share over Q4 2007.


- The Corporation delivered continued drilling success in 2008 with the drilling
of eight gross (seven net) wells, resulting in seven gross (six net) producing
wells for a success ratio of 88 percent.


- Stonefire added corporate reserves of 3.709 million boe on a proved plus
probable (P+P) basis and 2.240 million on a proved basis at December 31, 2008.


- All-in finding and development costs for 2008 reserve additions, including
future development capital, are highly competitive at $8.42 per boe P+P and
$13.08 per boe proved.


- Continued improvement in operating efficiencies, with operating costs
averaging $5.48 per boe in 2008, a decrease of 38 percent from 2007 operating
costs of $8.88 per boe. Q4 2008 operating costs averaged $3.91 per boe, a
decrease of 51 percent from Q4 2007 operating costs of $7.98 per boe.


- Capital spending totalled $21.1 million with $15.5 million or 74 percent spent
on drilling and completions. The Corporation has no outstanding flow-through
spending obligations.


- Stonefire generated revenue of $18.5 million in 2008 an increase of 542
percent over 2007 revenue of $2.9 million.


- The Corporation's gross land base grew from 24,800 acres entering 2008 to
31,852 acres at year-end, an increase of 28 percent, all in the greater Edson
area.


- The Corporations drilling inventory increased substantially through 2008 and
stood at 44 gross (33 net) locations at year-end 2008. All wells in inventory
are Stonefire-operated.


President's Message

It is a great pleasure to report on Stonefire's activities for 2008. In what
could be described as a "break-out" year for Stonefire we continued to execute a
drilling-based business growth plan with significant success. The results for
2008 included record production, record reserve growth, record revenue and
record cash flow. Our strong reserve growth generated what we believe will prove
to be top-decile finding and development costs and top-decile operating costs in
the western Canadian oil and natural gas industry. We continue to build a solid
foundation of growth opportunities for the Corporation and have maintained our
operating strategy of controlling each element of the exploration and production
cycle in order to maximize the success rate, control costs and maximize
netbacks. The cornerstones of this business strategy are operatorship, high
working interest, control of facilities and an exploration focus on multi-zone,
Deep Basin drilling prospects. With these proven operating principles we expect
to show growth and added value in 2009, despite the downturn in commodity prices
and the industry's tighter access to capital. We are mindful of the turmoil and
uncertainty in the capital markets, and will carry out a conservative capital
spending program in 2009 that maintains prudent debt ratios.


In 2008 the majority ($15.5 million) of our $21.1 million of capital spending
was directed to drilling and completions. Stonefire operated all of its capital
projects in 2008 and plans to do the same for 2009. Of the eight gross wells
drilled in 2008, seven are economic producers for an 88 percent success ratio.
Our drilling program of high-working-interest wells resulted in significant
reserve additions and several high-impact new pool discoveries. On a proved plus
probable basis, 3.7 million boe of reserves were added, according to our
independent December 31, 2008 reserves evaluation. These additions replaced the
year's production 11.8 times. The resulting proved plus probable finding and
development costs were $8.42 per boe including all future development capital.
We think this result will place Stonefire in the most efficient 10 percent of
the industry in 2008.


One of the exploration highlights for the year was the discovery of a sweet
light oil pool at our core Edson property. This 100 percent working interest
pool currently has two wells producing approximately 270 bbls per day of clean
(no water) 39 degrees API sweet crude oil, which incurs low operating costs and
generates solid netbacks even at today's lower prices. Further delineation
drilling is planned in 2009 with the potential for up to three additional 100
percent working interest oil wells.


Our control of gas processing at Edson, along with our high average working
interest and the operatorship of 98 percent of our production, allowed Stonefire
to achieve low operating costs of $5.48 per boe of production in 2008. Operating
costs trended lower through the year with increasing production volumes and the
resulting operating efficiencies. By the fourth quarter of 2008 operating costs
had declined to average only $3.91 per boe. Our operating costs for 2009 have
been forecast to average $4.50 per boe which will likely enable Stonefire to be
top-decile within the industry in this important category.


Efficient operations and strong commodity pricing through much of 2008 generated
a funds flow netback averaging $30.13 per boe for the year. These strong
netbacks, in combination with the low proved plus probable finding and
development costs mentioned above, gave a recycle ratio for the year of 3.6
times. The recycle ratio is a measure of the Corporation's ability to turn
invested capital into cash flow measured on a boe basis. The greater the recycle
ratio, the greater the profit margin generated for shareholders.


Balance sheet integrity is a crucial element in these financially uncertain
times, and through 2008 Stonefire's credit facilities expanded with our drilling
success and production base. At year-end credit lines available to Stonefire
totalled $30 million, which was well in excess of the Corporation's net debt and
working capital deficiency of $19.4 million. This credit facility with the
National Bank of Canada was reviewed and re-approved in early 2009, and we are
confident that it will remain intact throughout the year. Stonefire has set a
conservative budget for 2009 largely financed with its cash flow. This is
prudent and will allow for some growth while maintaining financial flexibility
for the Corporation to pursue opportunities that may arise.


We have set a modest $11.5 million capital budget for 2009 focused mainly on
drilling and completion of up to six gross (4.5 net) wells in the Edson and
McLeod fields. This budget is expected to be funded mainly from cash flow.
Activity in the first quarter included the drilling of one 100 percent working
interest multi-zone gas well at Edson, a 10.4 square kilometre 3D seismic
program also at Edson and a pipeline project to remove production bottlenecks at
McLeod. The 2009 budget will be roughly balanced between the first and second
halves rather than weighted to the first quarter. This will give Stonefire the
flexibility to accelerate or slow down spending as market conditions dictate,
and to benefit from declining field service cost.


The rapid slowdown in industrial activity in North America has led to a
significant decline in industrial gas demand, which helped to create a near-term
oversupply of natural gas despite the very cold winter in much of North America.
The oversupply was reflected in U.S. natural gas storage levels moving to well
above the five-year average during February and early March, and has put
downward pressure on natural gas prices. As in past cycles, I believe the
situation will correct itself through reduced drilling, declining supply and
perhaps a recovery in industrial demand later in 2009 and into 2010. Crude oil
prices also remain low compared to 2008 but it appears the rebalancing of world
oil supply and demand is bringing some stability to oil prices. In spite of
these wider challenges, Stonefire is in a sound position. We have complete
control over our production and capital spending, a high-quality long-life Deep
Basin production base, very low operating costs, financial flexibility with $10
million of unused bank line available and high-quality operated drilling
prospects with an inventory that has grown to 44 gross locations entering 2009.


Stonefire's management team is dedicated, hard-working and motivated. We will
make every effort to continue adding value while maintaining the flexibility to
react to changing market conditions.


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 audited financial
results for the year ended December 31, 2008, including the Corporation's
audited 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].