Stonefire Energy Corp. Announces 2008 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, 2008. 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
                                                Mar 31, 2008   Mar 31, 2007
----------------------------------------------------------------------------
($ except share amounts)                          (unaudited)    (unaudited)
FINANCIAL
Petroleum and natural gas revenue               $  2,450,738   $    392,412
Funds flow from (used in) operations (1)             715,059        (27,209)
 Per share, basic (1)                                   0.03           0.00
Net loss                                            (146,273)      (299,911)
 Per share, basic                                      (0.01)         (0.02)
Capital expenditures                               4,021,672      3,940,202
Working capital (deficit) (end of period)       $(10,998,534)  $  4,201,368
Shares outstanding (end of period)
 Class A, including shares under share
  purchase loans                                  18,265,000     15,265,000
 Class B                                           1,012,000      1,012,000
 Options                                           1,775,000      1,061,000
Weighted average shares outstanding
 Class A                                          18,202,500     11,925,889
 Class B                                           1,012,000      1,012,000
 Conversion of Class B shares (2)                  8,188,000      5,734,667
                                               -------------- --------------
Weighted average basic shares outstanding         27,402,500     18,672,556
Class A share trading
 High                                           $       1.25   $       2.29
 Low                                                    0.65           1.45
 Close                                          $       1.10   $       1.50
----------------------------------------------------------------------------
OPERATIONS
Production
 Natural gas liquids (bbls/d)                             98             19
 Natural gas (mcf/d)                                   2,209            422
 Total (boe/d at 6:1)                                    466             89
Reference prices
 WTI (US$ per bbl)                              $      97.90   $      58.27
 AECO (Cdn$ per GJ)                                     7.49           7.01
Average selling price
 Natural gas liquids (per bbl)                         74.96          52.25
 Natural gas (per mcf)                                  8.88           8.00
Operating netback (per boe at 6:1)                     28.76          21.56
Funds flow netback (per boe at 6:1)             $      16.86   $      (3.40)

(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, 2008, the Class B shares are converted
    at the period-end Class A share price of $1.10 (2007 -$1.50) and added
    to the Class A shares to calculate basic shares outstanding.



2008 First Quarter Corporate Highlights

- Average production of 466 boe/d, an increase of 424 percent over Q1 2007
production of 89 boe/d and a record quarterly rate.


- Stonefire's production is liquids-rich natural gas with the production mix
comprised of 21 percent natural gas liquids (NGL) and 79 percent natural gas.


- Continued 100 percent exploration success in the quarter with the drilling of
2 (1.5 net) multi-zone exploration wells in the Edson and McLeod fields.


- Funds flow of $715,059 with an average operating netback of $28.76 per boe in
the quarter, both record highs for the Corporation.


- Increased financial capacity, with lines of credit raised from $8.25 million
to $14 million in March.


- First proprietary 3D seismic program with the shooting of 16 square km over a
portion of the Corporation's 100 percent working interest lands at Edson.


- Capital spending of $4 million for the quarter with majority spent on
drilling, completion and tie-in of 1.5 net wells.


- Satisfied approximately $2.9 million of the Corporation's total $5.7 million
in flow-through spending obligations for 2008. Remainder is expected to be
satisfied by the end of Q2 2008.


- Operating costs averaged $9.33 per boe for the quarter, 15 percent lower than
in Q1 2007 but higher than originally forecast due to one-time costs associated
with new wells and facilities brought on line in late Q4 2007 and in Q1 2008.
Operating costs are forecast to average approximately $6.00 per boe for the
remainder of 2008.


- Through Q1 drilling success, Stonefire's drilling inventory has expanded to 36
gross locations with an average working interest of 70 percent including
down-spacing locations. All drilling locations in inventory are Stonefire
operated.


President's Message

It is a great pleasure to report on Stonefire's activities for the first quarter
of 2008. Stonefire continued to execute its business growth plan, achieving 100
percent drilling success, record production and record cash flow in the quarter.
Stonefire exited the quarter and today, mid-way through Q2, continues to be
on-track to achieve its production targets of 800 boe/d average for 2008 and an
exit rate of 1,000 boe/d.


The first quarter of 2008 saw dramatic change for the oil and natural gas
industry. At the start of the quarter the outlook for commodity prices,
especially natural gas, was uncertain. Subsequently, cold winter weather in
North America increased natural gas consumption significantly and resulted in
gas storage inventories declining from unusually high levels back to the
five-year average by the end of the quarter. Greater demand along with reduced
imports of liquefied natural gas and reduced gas deliverability, especially from
Western Canada, resulted in a strong rebound in natural gas prices to levels not
seen since 2005. Similarly, by the end of the quarter benchmark crude oil prices
reached record levels and continue to set new highs as this report is written.
Stonefire's liquids-rich natural gas production benefits from both trends.


Entering 2008 Stonefire had adopted a conservative approach in accordance with
the weaker natural gas prices at the time. The year's capital budget was set at
$12 million, to be funded from cash flow and existing bank lines. Our focus was
to acquire 3D seismic data at our core Edson area to help reduce exploration
risk and to focus our attention on operated, lower-risk, high-reward exploration
wells. The 2 wells (1.5 net) we drilled in the quarter are Stonefire-operated,
targeted multi-zone Deep Basin gas prospects and were both successful.


The first was a 50 percent working interest exploration well in the McLeod field
drilled to a depth of 2,072 metres. This well has been tied-in and is expected
to be on production at 100 boe/d net in May 2008. The second well was a 100
percent working interest well at Edson spud in mid-March on the newly acquired
3D seismic data. This well was drilled to 2,373 metres and encountered four
natural gas zones. It was completed in April and less than five days after the
end of completion operations was tied into Stonefire's operated natural gas
plant and brought on-production. The well is currently producing at 300 boe/d
net with low decline to date. These excellent results validate the use of 3D
seismic and have helped to identify a further eight, 100 percent working
interest drilling locations at Edson.


Production in Q1 averaged 466 boe/d, which was up 424 percent from Q1 2007 and a
quarterly record for the Corporation. The major period-over-period production
increase resulted from Stonefire's steady success in drilling multi-zone natural
gas targets in the Edson exploration area. The higher volumes resulted in record
quarterly funds flow from operations of $715,059. This represents an important
milestone for the Corporation, with cash flow now beginning to fund a material
portion of our capital expenditures. The two latest wells were drilled later in
the first quarter and did not contribute significantly to this period's average
production. Tie-in of the new Edson well has raised Stonefire's corporate
production to over 700 boe/d, with the latest McLeod well yet to come
on-production. Once the McLeod well is on-production Stonefire will have eleven
gross producing wellbores at its three properties in the Edson exploration area.


Looking forward Stonefire is well-positioned to execute its $12 million capital
budget for the year from cash flow and existing bank lines. We plan to drill an
additional four net wells in 2008. All will be high-working-interest and
Stonefire operated and all hold potential for high impact, multi-zone Deep Basin
natural gas. Two are 100 percent working interest wells in the Corporation's
core Edson field and are being prepared for drilling in June 2008. Both of these
are close to Stonefire's 100 percent working interest Edson gas gathering and
gas plant infrastructure. As the year progresses we expect continuing reduction
in unit operating costs as production volumes increase resulting in higher
netbacks and increasing quarterly cash flow.


The initial budget would bring our drilling total to 5.5 net wells for the year.
However, with continued drilling success, our expanding drilling inventory,
ongoing strength in commodity prices and potentially higher than forecasted cash
flow, Stonefire may be in a position later in the year to increase its capital
budget and number of wells to be drilled in 2008.


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, 2008, 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].