Wrangler West Reports 2011 First Quarter Operating and Financial Results

CALGARY, June 16, 2011 /CNW/ -- 
CALGARY, June 16, 2011 /CNW/ - Wrangler West Energy Corp. ("Wrangler West" or the "Company") (TSXV: WX) announces today's filing on SEDAR (www.sedar.com) of the Company's unaudited Financial Statements and related
 Management's Discussion and Analysis ("MD&A") for the three months
 ended March 31, 2011 with comparative data for the three months ended
 March 31, 2010 and the year ended December 31, 2010.( )Effective January 1, 2011, Wrangler West has prepared interim financial
 statements and comparative information according to International
 Financial Reporting Standards. Previously, the Company prepared
 financial statements according to Canadian generally accepted
 accounting principles. All documents may be viewed at www.sedar.com.






 

                                             HIGHLIGHTS

Three months ended March 31                       2011    2010 % Change

OPERATIONAL HIGHLIGHTS                                                 

Production                                                             

Crude oil and NGL (bbls/d)                         247     302     (18)

Natural gas (mcf/d)                              4,704   3,980       18

Total (boe/d)                                    1,031     965        7

                                                                       

Prices                                                                 

Crude oil and NGL ($/bbl)                        78.39   74.21        6

Natural gas ($/mcf)                               3.92    5.72     (31)

                                                                       

Per boe ($)                                                            

Petroleum and natural gas revenue                36.66   46.80     (22)

Royalties                                       (5.39)  (7.28)     (26)

Operating expenses                             (15.38) (13.47)       14

Field netback                                    15.89   26.05     (39)

General and administrative                      (3.31)  (3.22)        3

Interest                                        (0.63)  (1.12)     (44)

Funds flow from operations                       11.95   21.71     (45)

Depletion, depreciation, and amortization      (16.09) (14.10)       14

Accretion                                       (0.20)  (0.25)     (20)

Share-based payments                                 -  (0.71)    (100)

Deferred income tax (benefit)                     1.08  (2.26)    (148)

Gain (loss) on sale of assets                     0.02  (0.12)    (117)

Net earnings (loss)                             (3.24)    4.27    (176)

                                                                       

FINANCIAL HIGHLIGHTS ($ thousand)                                      

Petroleum and natural gas revenue                3,401   4,066     (16)

Royalties                                        (500)   (633)     (21)

Operating expenses                             (1,427) (1,170)       22

General and administrative                       (307)   (280)       10

Interest                                          (59)    (97)     (39)

Funds flow from operations                       1,108   1,886     (41)

Depletion, depreciation, and amortization      (1,493) (1,225)       22

Accretion                                         (18)    (22)     (18)

Share-based payments                                 -    (62)    (100)

Deferred income tax (benefit)                      101   (196)    (152)

Gain (loss) on sale of assets                        2    (11)    (118)

Net earnings (loss)                              (300)     370    (181)

                                                                       

Outstanding shares (thousand)                                          

Weighted average - basic                         6,466   6,437        -

Weighted average - diluted                       6,602   6,550        1

                                                                       

Funds flow from operations - basic and diluted
($/share)                                         0.17    0.29     (41)

Net earnings (loss) - basic and diluted
($/share)                                       (0.05)    0.06    (183)

                                                                       

Total assets ($ thousand)                       34,172  35,164      (3)





 


Wrangler West converts petroleum and natural gas reserves and volumes to
 a common unit of measure on a basis of six thousand cubic feet ("mcf")
 of natural gas equals one barrel ("bbl") of oil.  Disclosure using
 barrels of oil equivalent ("boe") may be misleading, particularly if
 used in isolation. The basis for the boe conversion ratio of 6 mcf
 equals one bbl is an energy equivalency conversion method, primarily
 applicable at the burner tip.  This conversion rate does not represent
 a value equivalency at the wellhead. The Company calculates boe per day
 based on total production for the period divided by the number of days
 during the period.


Wrangler West Energy Corp. ("Wrangler West" or the "Company") presents
 operating and financial results for 2011 first quarter.  Wrangler West
 is a Canadian junior oil and natural gas exploration company focused on
 generating shareholder value by exploring for, developing and producing
 natural gas and crude oil from properties located in the Province of
 Alberta.


2011 First Quarter Highlights


    --  $3.4 million in revenue
    --  $1.1 million in funds flow from operations
    --  $0.9 million in capital expenditures
    --  potential asset disposition of Grand Forks oil pool



Review of First Quarter
For the three months ended March 31, 2011, Wrangler West produced an
 average of 1,031 boe per day, higher by seven percent when compared to
 the same period one year ago.  However, our field netback fell
 significantly as Wrangler West experienced a 31 percent decrease in the
 natural gas price received.  A six percent increase in crude oil price
 slightly offset the 2011 first quarter lower netback.  Operating costs
 increased 14 percent on a per boe basis, somewhat higher than expected
 as we battled to keep production moving through an unusually cold
 winter.  Funds flow from operations, at $1.1 million, declined
 year-over-year and compared to 2010 fourth quarter which had funds flow
 of $1.4 million.


Capital Expenditures 
Wrangler West invested $0.9 million in capital expenditures during 2011
 first quarter.  The Company acquired land and conducted multiple
 seismic programs prior to break-up.  Seismic and land acquisitions
 accounted for 72 percent of 2011 first quarter capital expenditures. 
 Wrangler West will continue to build quality, seismically-defined
 drilling targets throughout 2011.  Our capital expenditures forecast is
 $8.0 million for the current fiscal year.


Commodity Prices
During 2011 first quarter, natural gas prices demonstrated unexpected
 seasonal weakness.  Although a long, cold winter persisted throughout
 most of North America, natural gas prices remained weak throughout the
 heating season, a period when, typically, natural gas experiences some
 strength as storage volumes are depleted.


During the winter of 2010-2011, natural gas storage volumes were
 slightly below the five-year average and injection into storage was
 below expectations.  It is likely the lower injection rate is a result
 of the drilling rig fleet being kept busy pursuing crude oil
 exploration and development opportunities.  Drilling for natural gas
 appears to have dropped significantly as much of the drilling to
 maintain land assets in the United States was completed.


The natural gas business remains volatile.  In the near term, we
 continue to expect natural gas prices will remain somewhat range-bound
 between $4.00 and $5.00.  North American natural gas markets are
 showing some signs of life as we move into the summer.  A few
 well-respected analysts are suggesting the bottom may have occurred and
 are indicating positive price projections moving forward.


Crude oil prices continue to be robust with the WTI benchmark hovering
 around $100 per bbl.  World events influence the premium in crude oil
 price although ongoing consumption is relatively stable.  As
 consumption in Asia and other developing economies improves demand,
 prices can be expected to remain strong.  Economic recovery throughout
 North America is still tentative and high energy costs are deemed a
 threat to any potential recovery.  The energy producing countries will
 carefully monitor supply and demand to maximize crude oil prices while
 avoiding the potential destruction of purchasing power.  Their
 objective is to ensure production of adequate volumes to sustain a
 healthy balance in crude oil supply and demand.  This scenario has
 played out many times in recent history as global issues impact world
 energy markets.


Outlook for 2011
Once again, Wrangler West is focused on finding economic crude oil and
 natural gas within the context of the commodity prices we receive.  As
 the crude oil market is quite strong, we are investigating the
 potential asset disposition of our Grand Forks oil producing
 properties.  If we complete this process, the proceeds would be applied
 to bank indebtedness.  We expect to invest most of our 2011 capital
 expenditures budget of $8.0 million in crude oil exploration activity. 
 We have a growing inventory of opportunities that are approaching the
 drill-ready stage and we expect to accelerate activity in the latter
 half of 2011.






                                                                       

WRANGLER WEST ENERGY CORP.                                             

STATEMENTS OF FINANCIAL POSITION                                       

(Stated in thousands of dollars)                                       

(Unaudited)                                                            

                                                                       

                                      March 31, December 31, January 1,

                                           2011         2010       2010

                                                   (note 17)  (note 17)

Assets                                                                 

Current assets                                                         

  Accounts receivable (note 4 (b))      $ 1,307      $ 1,406    $ 1,409

  Income tax receivable                       -           74        531

  Prepaid expenses                          184          144        371

  Assets held for sale (note 9)               -            -      4,084

                                          1,491        1,624      6,395

                                                                       

Exploration and evaluation (note 8)           -            -         44

Property, plant and equipment (note
7)                                       32,681       33,335     32,114

                                       $ 34,172     $ 34,959   $ 38,553

                                                                       

Liabilities and shareholders' equity                                   

Current liabilities                                                    

  Bank indebtedness (note 13)           $ 7,117      $ 6,354    $ 8,731

  Accounts payable and accrued
  liabilities                             2,093        3,260      3,358

  Decommissioning obligations related
  to                                                                   

  assets held for sale (note 9)               -            -        573

                                          9,210        9,614     12,662

                                                                       

Decommissioning obligations (note 15)     2,724        2,705      2,024

                                                                       

Deferred income tax                       3,301        3,403      3,833

                                         15,235       15,722     18,519

                                                                       

Shareholders' equity                                                   

  Share capital (note 11)                12,402       12,402     12,194

  Contributed surplus                     4,538        4,538      4,313

  Retained earnings                       1,997        2,297      3,527

                                         18,937       19,237     20,034

                                                                       

                                       $ 34,172     $ 34,959   $ 38,553





 






WRANGLER WEST ENERGY CORP.                                             

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)                                                                 

(Stated in thousands of dollars, except per
share amounts)                                                         

(Unaudited)                                                            

                                                                       

                                            Three months ended March 31

                                                 2011              2010

                                                              (note 17)

Revenue                                                                

  Petroleum and natural gas sales             $ 3,401           $ 4,066

  Royalties                                     (500)             (633)

                                                2,901             3,433

                                                                       

Expenses                                                               

  Operating                                     1,427             1,170

  General and administrative                      307               280

  Share-based payments                              -                62

  Depletion, depreciation and amortization      1,493             1,225

Results from operating activities               (326)               696

                                                                       

Finance                                                                

  (Gain) loss on sale of assets                   (2)                11

  Interest and accretion (note 5)                  77               119

                                                   75               130

                                                                       

Earnings (loss) before income tax               (401)               566

                                                                       

Deferred income tax (benefit)                   (101)               196

                                                                       

Net earnings (loss) and comprehensive
income (loss)                                 $ (300)             $ 370

                                                                       

Net earnings (loss) per share (note 12)                                

  Basic and diluted                          $ (0.05)            $ 0.06





 






WRANGLER WEST ENERGY CORP.                                             

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY                           

(Stated in thousands of
dollars)                                                               

(Unaudited)                                                            

                                                                       

                 Number of                                        Total

                    common     Share Contributed Retained shareholders'

                    shares   capital     surplus earnings        equity

Balance at
January 1, 2011      6,466  $ 12,402     $ 4,538  $ 2,297      $ 19,237

  Options
  exercised              -         -           -        -             -

  Share-based
  payments               -         -           -        -             -

  Net earnings
  (loss)                           -           -    (300)         (300)

Balance at March
31, 2011             6,466  $ 12,402     $ 4,538  $ 1,997      $ 18,937

                                                                       

                                                                       

Balance at
January 1, 2010      6,416  $ 12,194     $ 4,313  $ 3,527      $ 20,034

  Options
  exercised             25       112        (55)        -            57

  Share-based
  payments               -         -          89        -            89

  Net earnings           -         -           -      370           370

Balance at March
31, 2010             6,441  $ 12,306     $ 4,347  $ 3,897      $ 20,550





 






WRANGLER WEST ENERGY CORP.                                             

STATEMENTS OF CASH FLOWS                                               

(Stated in thousands of dollars)                                       

(Unaudited)                                                            

                                                                       

                                           Three months ended March 31 

                                              2011                 2010

Cash provided by (used in):                                            

                                                                       

Operating                                                              

  Net earnings (loss)                      $ (300)                $ 370

  Items not involving cash:                                            

    Depletion, depreciation and
    amortization                             1,493                1,225

    Accretion                                   18                   22

    Share-based payments                         -                   62

    (Gain) loss on sale of assets              (2)                   11

    Deferred income tax (benefit)            (101)                  196

                                             1,108                1,886

  Change in non-cash operating working
  capital (note 6)                             179                (456)

                                             1,287                1,430

                                                                       

Financing                                                              

  Decrease in bank indebtedness, original
  credit facility                                -              (3,492)

  Increase in bank indebtedness, new
  credit facility                              763                    -

  Issuance of common shares                      -                   56

                                               763              (3,436)

                                                                       

Investing                                                              

  Property, plant and equipment
  expenditures                               (864)              (1,880)

  Proceeds on sale of property, plant and
  equipment                                     26                   10

  Proceeds on sale of assets held for
  sale (note 9)                                  -                3,499

  Change in non-cash investing working
  capital (note 6)                         (1,212)                  377

                                           (2,050)                2,006

                                                                       

Cash and cash equivalents, beginning and
end of period                                  $ -                  $ -

                                                                       

Supplementary cash flow information                                    

  Interest paid                                 57                   79

  Income tax paid (received)                  (74)                    6





 


Reader Advisory 
This news release contains forward-looking statements about potential
 new crude oil and natural gas drilling, production operations, sources
 and use of capital, potential asset purchases or dispositions and
 expected future operations. Although Wrangler West believes the
 expectations reflected in these forward-looking statements are
 reasonable, undue reliance should not be placed on them because the
 Company can give no assurance they will prove to be correct. Since
 forward-looking statements address future events and conditions, by
 their very nature they involve inherent risks and uncertainties. A more
 detailed discussion of forward-looking statements is provided in
 Wrangler West's Management's Discussion and Analysis for the three
 months ended March 31, 2011 which is filed on SEDAR (www.sedar.com).  The forward-looking statements contained in this news release are
 made as of the date hereof and Wrangler West undertakes no obligation
 to update publicly or revise any forward-looking statements or
 information, whether as a result of new information, future events or
 otherwise, unless so required by applicable securities laws.


Corporate Profile
Wrangler West is a Canadian junior crude oil and natural gas producer
 which explores for and develops crude oil and natural gas production
 assets in the Province of Alberta. Since inception, our mandate has
 been to use the drill bit to add shareholder value. Disciplined
 management of our operations and production portfolio creates
 sufficient funds flow to support ongoing operations. Wrangler West
 intends to continue to reinvest funds flow from operations and other
 available capital to protect current and add future value.  Wrangler
 West trades on the TSX Venture Exchange under the symbol "WX".


Additional Information
Wrangler West files additional shareholder and public information on
 SEDAR accessible at www.sedar.com. This includes the Statement of Reserves Data and Other Oil and Gas
 Information Form NI 51-101 F1, F2 and F3 effective December 31, 2010. 
 Alternatively, to obtain copies of published corporate information,
 contact Crista L. Ferguson, Chief Financial Officer, Wrangler West
 Energy Corp., 1950, 444 Fifth Avenue SW, Calgary, Alberta, Canada  T2P
 2T8 (telephone [phone] or e-mail [e-mail]).


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


 


 


To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/June2011/16/c6966.html



p align="justify" bWran/bbgler West Energy Corp./bbr/ Steven F. Johnsonbr/ President and Chief Executive Officerbr/ a href="mailto:[e-mail]"[e-mail]/abr/ telephone:  [phone] /p 

Copyright