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

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


Stonefire Energy Corp. (TSX VENTURE:SFE.A) (TSX VENTURE:SFE.B) ("Stonefire" or
the "Company") is pleased to report that the 2007 year end exit production rate
based on field estimates is approximately 611 boepd (80% natural gas) which is
within previous guidance and an all time high for the Company. Notably this
production rate does not include Stonefire's previously announced Q3 2007
discovery well. The pipeline tie-in for this well encountered 3rd party delays
and first production is now expected later in Q1 2008 at an estimated initial
net rate of 75 boepd. In the 4th quarter of 2007 Stonefire drilled two 100%
working interest exploration wells in the Edson area with a 100% success rate.
Both wells came on production through Stonefire's 100% working interest Edson
Gas Plant late in the quarter. The company is also pleased to report that it has
satisfied it's exploration flow-through spending commitments for 2007.


Highlights for the fourth quarter included the first full quarter of operation
of the Company's 100% working interest Edson Gas Plant. After start-up in late
September the plant has experienced excellent run time with no significant
operational problems. As a result of the new Edson Gas Plant average production
for the fourth quarter is estimated at 360 boepd (78% natural gas), an all time
high for the company. The fourth quarter also saw continued exploration success
at Edson. Two 100% working interest exploration wells were successfully drilled
to depths of 2363 meters and 2120 meters. A total of six gas zones were
completed in the two new wells. These two wells were tied-in to Stonefire's 100%
working interest gathering system and gas plant in December 2007 and are
currently producing at a combined rate of approximately 300 boepd comprised of
80% natural gas and 20% natural gas liquids. Based on these significant
exploration results Stonefire initiated plans for a 16 square kilometer 3D
seismic program over a portion of the Company's 100% working interest lands at
Edson. This seismic program is currently underway and will be completed by late
January 2008. The 3D seismic results are expected to help delineate numerous
deep basin gas zones prevalent in the Edson area, firm up exploration and
development drilling locations for 2008 and identify down- spacing
opportunities.


2008 Guidance

The company expects to drill one to two 100% working interest wells at Edson
based on the 3D seismic results prior to the end of the first quarter. In
addition, a Stonefire-operated, 50% working interest offset well to the
previously announced Q3 2007 discovery well is being prepared for drilling in
February 2008.


A preliminary capital budget for 2008 has been set at $12 MM with forecast
average production of 800 boepd for 2008 (80% natural gas). Cashflow for 2008 is
forecast at $7.0 MM with a year-end 2008 exit debt to annualized exit cash flow
ratio of 1.2. The majority of the 2008 capital spending will be directed towards
drilling and completions primarily in the Edson area where Stonefire has 100%
working interest in 3200 hectares (12.5 sections) of land, control of gas
processing facilities and has had significant exploration success to date. Up to
six gross (5.5 net) new wells are budgeted for 2008. All wells to be drilled are
Stonefire-operated, high working interest, and high impact multi-zone deep basin
gas prospects. These wells will typically be drilled to depths between 2200 and
2500 meters and will thereby qualify as deep gas under the proposed new royalty
structure for Alberta. The remaining flow through spending obligation for 2008
is approximately $6.0MM which the Company expects to easily satisfy with the
forecast budget and the Company's exploration drilling inventory. The capital
budget will be continuously reviewed and adjusted on a quarterly basis as
circumstances dictate.


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.


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.