Stonefire is an exploration-oriented company focused on sweet, liquids-rich natural gas prospects with multi-zone potential. It targets primarily Deep Basin reservoirs at its Edson exploration area in the W5 region of west central Alberta. Stonefire drilled four exploration wells in 2007 with 100 percent success, discovering six new pools including multi-zone discoveries. Three of the wells were brought on-production by year-end at a combined 2.0 mmcf per day, contributing to Stonefire’s 2007 year end exit rate of 611 boe/d. Stonefire plans to tie-in the fourth well in Q1 2008. Stonefire operates and holds 100 percent working interest in the 5.5 mmcf per day capacity 10-28 Gas Plant near Edson, commissioned in Q3 2007.

Stonefire has an active drilling program planned for 2008. The Company intends to use the data from its first 3-D seismic program, covering 16 square kilometers and completed in January 2008, to further define drilling targets for an additional six gross (5.5 net) medium-risk exploration wells to be drilled in 2008. A second 3-D program at Edson is planned for Q3 2008.

Stonefire has adequate capital resources to carry out its planned program. The Company plans to fund the 2008 capex program through a combination of cash flow and bank debt.