Stonefire Energy Corp.
TSX VENTURE : SFE.A
TSX VENTURE : SFE.B

Stonefire Energy Corp.

October 29, 2007 12:58 ET

Stonefire Energy Corp. Announces Corporate Update

CALGARY, ALBERTA--(Marketwire - Oct. 29, 2007) -

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 provide a corporate update as of October 29th, 2007.

Stonefire is pleased to report that in October 2007 the Company successfully drilled and cased two 100% Working Interest (W.I.) exploration wells in the Company's core Edson area. This maintains year to date exploration drilling success at 100% on 4 gross (3.5 net) wells drilled in the Edson and Mcleod areas. The two wells drilled in October in the Edson area targeted multiple Deep Basin gas zones. Both wells were successfully drilled to total depths of 2428 and 2195 meters. A total of six potential liquids rich natural gas zones were encountered in the two wellbores and completion operations have commenced on the first well. Preliminary results from the first well are very positive and suggest sustained deliverability of approximately 200 barrels oil equivalent per day (boepd) comprised of 80% natural gas and 20% natural gas liquids. The Company will be proceeding with the completion of the second well in early November. Both wells are scheduled to be connected by pipeline to Stonefire's new 100% W.I. Edson 10-28 Gas Plant and on production prior to year end.

Current production is at approximately 350 boepd with an additional net 75 boepd awaiting tie-in in the Mcleod field. The latest Edson exploration drilling and preliminary completion results put the Company on track to meet or exceed it's 2007 year end production target of 600 - 700 boepd.

Stonefire is also pleased to announce that in September 2007, as a result of increased production and exploration drilling success, the Company's operating and development credit lines with the National Bank of Canada have been increased from $6.0 million to a total of $9.0 million effective September 28th, 2007. As of September 30th, 2007 the Company's net debt was estimated at $5.8 million.

Stonefire's gross land base in the greater Edson area stands at 39.25 sections (25,120 acres) with an average working interest of 68%. Stonefire has a drilling inventory of over 40 gross (30 net) high impact exploration and development wells targeting multi-zone deep basin type natural gas prospects.

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 15,265,000 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 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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.

Contact Information

  • Stonefire Energy Corp.
    Mr. Richard Dahl
    President & Chief Executive Officer
    (403) 262-9885 ext 222
    (403) 262-9887 (FAX)
    or
    Stonefire Energy Corp.
    Mr. Ronald Williams
    Vice President Finance and CFO
    (403) 262-9885 ext 228
    (403) 262-9887 (FAX)
    or
    Stonefire Energy Corp.
    Suite 320, 333 - 5th Avenue SW
    Calgary, Alberta T2P 3B6