WestFire Energy Ltd. provide an update of its 2011 capital budget, its 2010 activities and production guidance, and a corporate overview.

2011 Capital Budget & Production Guidance WestFire's Board of Directors has approved the 2011 capital budget of $55 million. This budget is expected to provide an average production rate of approximately 3,750 boepd for the year and an exit rate of approximately 4,200 boepd, with oil exceeding 65 percent of the volumes.

Approximately 80 percent of the capital will be allocated to the drilling of 37 (37.0 net) wells. The primary focus will be on drilling 24 (24.0 net) horizontal wells on the Viking light oil resource play at Redwater and Provost in Alberta and across several areas in west central Saskatchewan. A further 12 (12.0 net) wells will be directed to the continued development of the heavy oil pools at Lloydminster. The remaining one (1.0 net) well will target liquids-rich natural gas at Bashaw, Alberta.

2010 Update During 2010, WestFire drilled 53 (47.7 net) wells resulting in 48 (43.5 net) crude oil wells, four (3.2 net) liquids- rich natural gas wells and one (1.0 net) dry hole for an overall success rate of 98 percent.

Field-reported production for the last ten days of December, 2010 exceeded 3,500 barrels of oil equivalent per day ("boepd") as a result of the most active drilling program in the Company's history, with oil comprising approximately 60 percent of the volumes. During December, a total of 14 (14.0 net) wells were tied in and placed on production leaving only one (1.0 net) well awaiting completion and tie in at year-end.

Fourth quarter production will be approximately 2,850 boepd versus the third quarter average of 2,437 boepd. Based on these field estimates WestFire expects to average approximately 3,100 boepd for December and 2,525 boepd for 2010.

Viking Oil Resource Play The majority of WestFire's 2010 drilling program was focused on the Viking light oil resource play at Redwater, Alberta and at Plato and Lucky Hills in west central Saskatchewan. Initial production results from the 29 (25.8 net) oil wells drilled have shown steady improvement. WestFire continued to refine its drilling and completion techniques while identifying regions of higher quality reservoir. The Company has implemented its internally-generated hot fluid fracture stimulation ("hot-frac") completion procedure on its most recent Viking horizontal wells with encouraging results. The hot-frac will be the completion technique of choice as WestFire embarks on harvesting its extensive Viking resource.

At Redwater, drilling by WestFire and other operators has identified several high-quality reservoir sweet spots. WestFire holds 15 (11.9 net) sections of land on one such sweet spot, yielding over 135 net risked potential horizontal development locations on current spacing of 16 wells per section. The Company is making application to increase the well density in this area to 32 wells per section. WestFire's recent wells in this area have averaged 85 boepd during the first month of production.

WestFire's Viking production at Redwater has grown from 250 to 700 boepd over the course of 2010. Future drilling at Redwater will focus on both development drilling in the sweet spot and on identifying additional high quality reservoir on our extensive acreage position.

In west central Saskatchewan, drilling activity has also identified an area of higher quality reservoir between the Plato North and Plato South fields. WestFire holds 27 (27.0 net) sections of land along this trend. WestFire's latest well drilled in this area was hot-fraced resulting in an initial two week average production rate of 70 boepd with a high fluid level. Additionally, an existing Viking horizontal well was re-stimulated using the hot-frac technique. The original treatment produced about one bopd per interval whereas hot-fracing yielded in excess of three bopd per interval treated. Horizontal wells in this area are now being completed with upwards of 30 frac intervals per well.

WestFire also has 15 (15.0 net) sections of land containing a vertically-developed Viking oil pool at Provost, Alberta. Horizontal drilling by industry in greater Provost has demonstrated encouraging results to date. WestFire has just received regulatory approval to drill up to 16 Viking horizontal wells per section and will commence drilling during the first quarter of 2011.

Currently our average all-in costs for a Viking horizontal well are approximately $1.2 million.

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