WestFire Announces Results for the Six Months Ended June 30, 2010

CALGARY, ALBERTA--(Marketwire - Aug. 12, 2010) - WestFire Energy Ltd. ("WestFire" or the "Company") (TSX:WFE) is pleased to announce its financial and operating results for the three and six month period ended June 30, 2010.

FINANCIAL AND OPERATING HIGHLIGHTS

In addition to the "Financial and Operating Highlights" table below, the consolidated financial statements and related management's discussion and analysis (MD&A) for the period ended June 30, 2010 will be available on the company's website and on the SEDAR website.

  ---------------------------------------------------------------------------- Financial                              Three Months              Six Months ($'s except share and                Ended June 30,          Ended June 30,  production information)           2010        2009        2010        2009 ---------------------------------------------------------------------------- Oil and gas revenues          9,290,475   4,224,631  20,108,592   9,001,166 Cash provided by operating  activities                   3,091,852   2,870,677   9,769,469   2,326,004 Funds flow from operations  (1)                          4,545,925   2,054,571   9,814,003   4,040,251  Per share - basic and   diluted(1)                       0.12        0.09        0.27        0.19 Net income (loss)              (842,068) (1,267,400)    384,984  (3,381,083)  Per share - basic and   diluted                         (0.02)      (0.06)       0.01       (0.16) Bank Debt                                                     -  (1,863,447) Working capital  (deficiency)(2)                                     (1,855,288)     47,070 Net debt(3)                                          (1,855,288) (1,816,377) Capital expenditures  (including non-cash)        22,710,771   6,721,746  40,131,478   9,331,090 Common shares outstanding -  basic                       39,035,315  26,512,730  39,035,315  26,512,730 Common shares outstanding -  diluted                     39,447,554  26,512,730  39,437,501  26,512,730 Weighted average common  shares - basic              36,758,831  21,887,153  35,979,044  21,165,280 Weighted average common  shares - diluted            37,171,070  21,887,153  36,381,230  21,165,280 Sales Volumes  Oil and NGL (bbls per day)       1,017         450       1,046         511  Natural gas (Mcf per day)        8,137       5,259       8,149       5,498  Barrels of oil equivalent   (boe per day)(4)                2,374       1,327       2,405       1,427 Average selling prices(5)  Oil and NGL ($/bbl)              66.90       60.10       69.04       49.23  Natural gas ($/Mcf)               4.18        3.68        4.77        4.47  Total ($/boe)                    43.00       34.99       46.20       34.85 Netback ($/boe)  Revenue                          43.00       34.99       46.20       34.85  Realized derivative gains         2.85        4.71        1.89        8.51  Royalties                        (3.59)      (1.21)      (4.65)      (4.33)  Operating expenses              (15.52)     (15.66)     (15.53)     (16.48)  Transportation expenses          (1.21)      (1.35)      (1.17)      (1.14) ----------------------------------------------------------------------------  Netback(1)                       25.53       21.48       26.74       21.41 ----------------------------------------------------------------------------  (1) Non-GAAP (generally accepted accounting principles) measure. See "Non-  GAAP Measurements in WestFire's MD&A.  (2) Working capital does not include the current portion of the risk  management contracts or the future tax asset or the current portion of bank  debt.  (3) Net debt includes bank indebtedness and working capital (deficiency).  (4) Six thousand cubic feet of natural gas is equivalent to one barrel of  oil.  (5) The average selling prices reported are before realized derivatives  gains (losses) and transportation charges.  

During the second quarter of 2010, WestFire continued to delineate the Viking oil resource play. Despite being hampered by wet weather, our accomplishments are as follows:

  --  Produced 2,374 barrels of oil equivalent per day (boepd) during Q2 2010,     compared to 1,327 boepd during Q2 2009, an increase of 79%; --  Funds flow from operations increased 117% to a $4,454,925 during Q2 2010     from $2,054,571 during Q2 2009; --  Funds flow from operations per share improved 33% to $0.12 per share in     Q2 2010 from $0.09 in Q2 2009; --  Reduced net general and administration expenses per boe by 13% to $3.31     in Q2 2010 from $3.82 in Q2 2009; --  Successfully drilled 12 (10.4 net) horizontal oil wells in the second     quarter of 2010; --  Completed an equity issue of 3.75 million shares at $8.00 per share for     gross proceeds of $30 million; --  Increased our bank line to $42 million with all of it undrawn at June     30, 2010; --  WestFire's liquidity remains strong with our $42 million bank line     undrawn at June 30, 2010; --  Closed and integrated a complementary acquisition of Viking oil assets     in the Provost area of Alberta; --  Entered into a lease option and drilling agreement that provides access     to approximately 40 sections of undeveloped land with Viking light oil     potential in the Dodsland/Kerrobert area of West Central Saskatchewan;     and --  Increased its Viking land inventory to 246 (231 net) sections from 183     (161 net) sections at year-end 2009 through acquisitions, crown land     sales and farm-in agreements. This translates into a future drilling     inventory in excess of 500 potential horizontal Viking oil development     locations.  

OPERATIONAL REVIEW

Little new production was brought on stream during the second quarter due to spring break-up and forest fires in the Redwater Area of Alberta followed by an abnormally wet spring in Western Canada. In addition, Q2 2010 was a period of load fluid recovery from the Viking wells drilled in Q1 2010.

A total of twelve (10.4 net) successful horizontal oil wells were drilled in the second quarter. On the Viking play, four (3.0 net) wells were drilled at Redwater, Alberta, and three (3.0 net) wells were drilled in West Central Saskatchewan. In addition, four (4.0 net) wells were drilled in a heavy oil pool in Lloydminster, Alberta and one (0.4 net) Cardium oil well was drilled at Willesden Green, Alberta. Completion and equipping of these wells will occur in the latter part of Q3 2010.

OUTLOOK

In the second quarter of 2010, WestFire upwardly revised its 2010 capital expenditure budget to $80 million. This capital program includes the drilling of 49 (46 net) wells which represents 73% of the total capital expenditures. A total of 25 (21.3 net) wells have been drilled in the first half of 2010. Production additions from wells drilled plus those planned in the last half of the year from this expanded capital budget has allowed the Company to increase its 2010 guidance for average production to 2,750 boepd (greater than 50% oil) and December 2010 average production rate of 3,600 boepd (greater than 60% oil) which is approximately 71% higher than our 2009 exit rate. During Q3 2010, netbacks will be affected by weak gas prices and the additional operating expenses resulting from the annual property tax payments.

The Company believes that it is well positioned to execute its business strategy with an extensive, resource-based drilling inventory focused on the Viking formation. The drilling inventory includes in excess of 500 potential horizontal Viking oil development locations which represent numerous years of drilling. WestFire is in the enviable position of having a clean balance sheet, unused bank lines, a large inventory of light oil drilling opportunities and a growing production base that is oriented towards light oil.

Cautionary Statements

Forward-looking information and statements

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following; the timing for completion and equipping of wells; the volume and product mix of WestFire's oil and gas production; 2010 production guidance, per share growth, the number of wells to be drilled and potential development drilling and number of potential horizontal Viking oil development locations.

In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of WestFire which have been used to develop such statements and information but which may prove to be incorrect. Although WestFire believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because WestFire can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: results from drilling and development activities consistent with past operations; the continued and timely development of infrastructure in areas of new production; continued availability of debt and equity financing and cash flow to fund WestFire's current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which WestFire operates; the timely receipt of any required regulatory approvals; the ability of WestFire to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which WestFire has an interest in to operate the field in a safe, efficient and effective manner; the ability of WestFire to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of WestFire to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which WestFire operates; the ability of WestFire to successfully market its oil and natural gas products that all necessary regulatory approvals will be obtained as and when required, that there will be no material adverse change in the Company's affairs or laws, rules or regulations relating to the Company, its securities or business, there will be no regulatory proceedings involving the Company or any of its directors or officers, or any cease trade or other order prohibiting or restricting trading in the Company's securities, no major national or international event will have occurred that has or would reasonably be expected to have a material adverse effect on financial markets or the business, operations or affairs of the Company.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statement, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of WestFire's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of WestFire or by third party operators of WestFire's properties, increased debt levels or debt service requirements; inaccurate estimation of WestFire's oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in WestFire's public disclosure documents, (including, without limitation, those risks identified in this news release and WestFire's Annual Information Form filed on SEDAR).

The forward-looking information and statements contained in this news release speak only as of the date of this news release, and WestFire does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

BOE Equivalent

Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

 FOR FURTHER INFORMATION PLEASE CONTACT:         WestFire Energy Ltd.         Lowell Jackson         President and CEO         (403) 718-3601         Fax: (403) 261-9658(FAX)          WestFire Energy Ltd.         Stephen Burtt         Vice President Finance and CFO         (403) 718-3603         Fax: (403) 261-9658(FAX)  Source: WestFire Energy Ltd.