Stonefire Energy Corp.

Stonefire Energy Corp.

April 22, 2008 17:36 ET

Stonefire Energy Corp. Provides Q1 2008 Operations Update

CALGARY, ALBERTA--(Marketwire - April 22, 2008) -


Stonefire Energy Corp. (TSX VENTURE:SFE.A) (TSX VENTURE:SFE.B) ("Stonefire" or the "Company") is pleased to report that during the first quarter of 2008 it has successfully drilled, cased and completed two gross, (1.5 net) multi-zone natural gas wells in the Company's core Edson and McLeod fields. This brings 2008 year-to-date drilling success to 100 percent. In addition, the previously announced McLeod discovery well drilled in Q3 2007 was placed on production in March 2008.

Both new wells were drilled and operated by Stonefire. The first well in the quarter was a 50 percent working interest well in the McLeod field spud in late February 2008 and successfully drilled to a total depth of 2,072 metres. The second well drilled in the quarter was a 100 percent working interest well in the Edson field which was drilled to a total depth of 2,373 metres. It was the first well drilled on the Company's 100 percent working interest proprietary 3D seismic data acquired over a portion of the Company's Edson lands in January 2008. The Edson well has been completed in four separate Deep Basin, liquids-rich, natural gas zones and was placed on production April 20th at approximately 300 boe per day.

"The success of the latest Edson well validates the use of our proprietary 3D seismic data over Stonefire's Edson lands and has helped to identify an additional eight, 100 percent working interest, drilling locations within the area of the current 3D coverage alone," reports Fred Laudel, Stonefire's Vice President of Exploration. These additions bring the Company's drilling inventory to over 35 high working interest wells including down spacing locations.

The new Edson well was tied into Stonefire's 100 percent working interest Edson gas plant less than five days after the end of well completion operations and following an inline production test conducted to minimize flared gas volumes. "This quick tie-in and almost immediate production highlights the advantages of having control and ownership of gas processing facilities in a competitive area like Edson," says Darren Kisser, Stonefire's Vice President of Engineering and Operations.

Based on the new 3D seismic and recent well results, Stonefire is currently preparing two additional 100 percent working interest Edson drilling locations to be spud as soon as possible after spring break-up. Both wells will target multi-zone Deep Basin natural gas and will be close to Stonefire's operated gas gathering and processing infrastructure.

The Company's current production rate of more than 700 boe per day is comprised of 80 percent natural gas and 20 percent natural gas liquids and does not include production from the new McLeod well. The Company is forecasting Q2 average production of approximately 750 boe per day. Q1 2008 average production, which did not include the two new wells, was approximately 460 boe per day, based on field estimates. This is a new quarterly record for Stonefire and an increase of 417 percent over Q1 2007 average production of 89 boe per day.

Looking forward, the company is on track to meet or exceed previous guidance for average 2008 production of 800 boe per day and an exit rate of 1,000 boe per day. The company plans to drill at least four additional net wells in the remainder of 2008, mainly in the Edson field.

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.

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)
    Stonefire Energy Corp.
    Mr. Ronald Williams
    Vice President Finance and CFO
    (403) 262-9885 ext 228
    (403) 262-9887 (FAX)
    Stonefire Energy Corp.
    Suite 320, 333 - 5th Avenue SW
    Calgary, Alberta T2P 3B6