Stonefire Energy Corp. Reports 2008 Year-End Operating Results and 2009 Guidance

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THE UNITED STATES.


Stonefire Energy Corp. (TSX VENTURE:SFE.A) (TSX VENTURE:SFE.B) ("Stonefire" or
the "Company") is pleased to provide details of its operating results in the
fourth quarter of 2008 and to provide details of planned capital spending and
forecast production for 2009.


OPERATIONS UPDATE

Stonefire is pleased to report record production and continued drilling success
in the fourth quarter of 2008. Estimated production for December 2008 was 1,340
boe per day, a monthly Company record. The production mix included 37 percent
light oil and natural gas liquids. Fourth quarter 2008 average production is
estimated at 1,293 boe per day, a quarterly record high and a 247 percent
increase over Q4 2007 production of 373 boe per day. Productive capability at
the end of 2008 was estimated to be in excess of 1,500 boe per day with one new
oil well at Edson awaiting tie-in and with natural gas production at McLeod
restricted by third party gathering restrictions. The Company's current
production rate is approximately 1,450 boe per day with the new Edson oil well
placed on production in mid-January. Optimization of facility restrictions at
McLeod is expected to add a net 100 - 150 boe per day by the end of Q1 2009.


Stonefire drilled two gross (1.5 net) wells in the fourth quarter, both of which
were successful. The first was a 100 percent working interest development oil
well targeting the Company's light oil pool discovery in the Edson area made in
the third quarter of 2008. This step-out well came on production in January 2009
and is currently flowing sweet light (39 degrees API) oil at 170 bbls per day.
The previously reported 100 percent working interest discovery oil well is
currently finishing its sixth month of production and is flowing at
approximately 270 bbls per day of clean oil. Total oil production from this new
oil pool is now 440 bbls per day and Stonefire expects to drill up to three
additional 100 percent working interest wells in this pool. The first of these
is expected to spud in early February 2009. Timing of the additional development
wells will depend on commodity prices.


The second well drilled by Stonefire in the fourth quarter of 2008 was a 50
percent working interest multi-zone natural gas well in the McLeod field. The
well came on production in December 2008 with gross productive capability in
excess of 3.0 mmscf per day (525 boe per day) including natural gas liquids and
is currently producing at a restricted rate of approximately 2 mmscf per day or
175 boe per day net to Stonefire.


With increasing production and control of gathering and gas plant facilities in
its Edson core area, the Company continued to realize lower unit operating
costs. Operating costs in the fourth quarter of 2008 are estimated to be $4.05
per boe.


Total capital expenditures for 2008 are estimated at $21 million, resulting in
year-end net debt of $19.4 million versus current bank lines of $30 million.


2009 CAPITAL PROGRAM AND PRODUCTION GUIDANCE

Stonefire's Board of Directors has recently approved an $11.5 million capital
budget for 2009, to be funded from forecast cash flow. The 2009 budget will be
directed primarily to drilling and completions, with plans to drill up to six
gross (4.5 net) wells in the McLeod and Edson fields. All capital projects in
2009 will be Stonefire-operated with an average working interest of 75 percent.


Full-year average production for 2009 is forecast at 1,500 to 1,600 boe per day,
an increase of 75 to 87 percent over 2008 average production of 856 boe per day.
The 2009 exit rate is forecast to be in the range of 1,700 - 1,800 boe per day.


With significant unused bank lines, increasing cash flow and control of all its
capital projects, Stonefire has financial flexibility and is well positioned to
react to changing market conditions. With its high quality Deep Basin production
base and low operating costs, Stonefire is also well positioned to show
continued growth even in a low commodity price environment. Stonefire has a
high-quality inventory of over 44 gross exploration and development drilling
locations. All are Stonefire-operated with an average working interest of
approximately 78 percent.


Stonefire is an Alberta-based company formed to participate in oil and natural
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.


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 there from. 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.