Wrangler West Reports 2011 Nine Months Operating and Financial Results

    




 CALGARY, Nov. 17, 2011 /CNW/ - Wrangler West Energy Corp. ("Wrangler West" or the "Company")  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 and nine  months ended September 30, 2011 with comparative data for the three and  nine months ended September 30, 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. 

  





                                                                    

                         Three months ended Sep 30 Nine months ended Sep30

                            2011    2010  % Change    2011    2010 % Change

    OPERATIONAL                                                            
    HIGHLIGHTS

    Production                                                             

    Crude oil and NGL        146     254      (43)     210     284     (26)
    (bbls/d)

    Natural gas (mcf/d)    4,058   4,120       (2)   4,354   3,813       14

    Total (boe/d)            822     941      (13)     936     920        2

                                                                           

    Prices                                                                 

    Crude oil and NGL      86.48   67.29        29   85.61   70.29       22
    ($/bbl) 

    Natural gas ($/mcf)     3.85    3.85         -    3.92    4.59     (15)

                                                                           

    Per boe($)                                                             

    Petroleum and          34.34   35.01       (2)   37.44   40.74      (8)
    natural gas revenue

    Royalties             (7.34)  (5.17)        42  (6.50)  (7.05)      (8)

    Operating expenses   (11.02) (12.31)      (10) (13.70) (13.78)      (1)

    Field netback          15.98   17.53       (9)   17.24   19.91     (13)

    General and           (4.88)  (2.94)        66  (3.96)  (3.23)       23
    administrative

    Interest              (0.21)  (0.69)      (70)  (0.56)  (0.87)     (36)

    Current income tax         -    0.17     (100)       -    0.06    (100)
    benefit

    Funds flow from        10.89   14.07      (23)   12.72   15.87     (20)
    operations

    Share-based payments  (1.08)  (0.95)        14  (0.32)  (0.88)     (64)

    Depletion and        (15.21) (17.59)      (14) (14.82) (16.24)      (9)
    depreciation

    Impairment of
    property, plant and        - (10.64)     (100)       -  (3.67)    (100)
    equipment

    Gain (loss) on sale     1.43  (0.02)   (7,250)  (3.65)  (0.09)    3,956
    of assets

    Accretion             (0.17)  (0.22)      (23)  (0.20)  (0.23)     (13)

    Deferred income tax     1.10    3.73      (71)    1.60    0.76      111
    benefit

    Net loss              (3.04) (11.62)      (74)  (4.67)  (4.48)        4

                                                                           

    FINANCIAL HIGHLIGHTS                                                   
    ($ thousand)

    Petroleum and          2,596   3,029      (14)   9,562  10,228      (7)
    natural gas revenue

    Royalties              (555)   (447)        24 (1,660) (1,768)      (6)

    Operating expenses     (833) (1,065)      (22) (3,500) (3,459)        1

    General and            (369)   (254)        45 (1,011)   (813)       24
    administrative

    Interest                (16)    (59)      (73)   (143)   (218)     (34)

    Current income tax         -      15     (100)       -      15    (100)
    benefit

    Funds flow from          823   1,219      (32)   3,248   3,985     (18)
    operations

    Share-based payments    (82)    (82)         -    (82)   (222)     (63)

    Depletion and        (1,150) (1,522)      (24) (3,784) (4,076)      (7)
    depreciation

    Impairment of
    property, plant and        -   (921)     (100)       -   (921)    (100)
    equipment

    Gain (loss) on sale      108     (2)   (5,500)   (932)    (23)    3,952
    of assets

    Accretion               (13)    (19)      (32)    (50)    (57)     (12)

    Deferred income tax       83     323      (74)     409     191      114
    benefit

    Net loss               (231) (1,004)      (77) (1,191) (1,123)        6

                                                                           

    Funds flow from
    operations - basic      0.13    0.19      (32)    0.50    0.62     (19)
    ($/share)

    Funds flow from
    operations - diluted    0.13    0.18      (28)    0.50    0.60     (17)
    ($/share)

    Net loss - basic and  (0.04)  (0.16)      (75)  (0.18)  (0.17)        6
    diluted ($/share)

                                                                           

    Total assets ($                                 27,322  33,303     (18)
    thousand)

                                                                           






 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 third quarter and first nine  months.  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 Nine Month Highlights 




        --  $9.6 million of revenue
        --  $3.2 million of funds flow from operations
        --  $3.2 million in capital expenditures




 Review of 2011 Nine Months For the nine months ended September 30, 2011, Wrangler West produced 936  barrels of oil equivalent ("boe") per day, an increase of two percent  compared to the same period one year ago.  To date in 2011, field  netbacks were lower by 13 percent as the price Wrangler West received  for natural gas declined 15 percent compared to the same period in  2010.  For the nine months ended September 30, 2011, crude oil prices  were 22 percent higher, compared to the same period one year ago.   Operating costs for the three months ended September 30, 2011, were  $11.02 per boe, reflecting the sale of the Grand Forks oil pool at the  end of the second quarter. 

 Capital Expenditures  During the nine months ended September 30, 2011, Wrangler West's total  capital expenditures were $3.2 million with the focus of our  exploration activities being oil-prone prospects.  We have been active  at crown land sales and continue to expand Wrangler West's land  inventory.  In 2011, the Company has drilled two oil wells and one  natural gas well. 

 Credit Facility  Subsequent to the 2011 third quarter, Wrangler West amended its credit  facility arrangement and now has in place a credit agreement totaling  $13.4 million, of which $8.4 million is a revolving operating demand  loan and $5.0 million is a non-revolving demand loan dedicated to  acquisitions and development.  At September 30, 2011, Wrangler West had  drawn $1.7 million on the credit facility. 

 Changing Business Environment  Over the last several years, there has been a change in the business  environment for conventional junior oil and natural gas producers.  The  shift from conventional exploration to resource play development is  consuming most of the capital available to this sector because  exploration in tight reservoirs requires massive investment.  Junior  conventional exploration companies do not have the critical mass to  participate in these capital-intensive resource plays.  From the  historical peak of approximately 20,000 wells drilled annually, the  current forecast is for approximately 12,500 wells in 2012.  Almost 70  percent of the forecasted well count will involve horizontal drilling  which will likely result in a record number of meters drilled.  Most  resource-play wells require complex completion programs to achieve  production.  The rates of return on this invested capital are evolving  but, generally, require the support of higher commodity prices. 

 We are seeing a significant supply of conventional oil and natural gas  assets coming to market. Junior producers interested in pursuing these  opportunities will require access to capital to transact.  As natural  gas prices improve, conventional exploration has lucrative potential  but it remains critical to manage through the current and prolonged  uncertain business environment. 

 Outlook During 2011, Wrangler West's natural gas price has averaged $3.92 per  mcf and, in the 2011 third quarter, experienced a modest decrease from  the price received during the 2011 second quarter.  These weak prices  persist even as the winter heating season begins and in spite of the  early colder weather cycling through North America's eastern seaboard.   Supply continues to overrun current demand.  The opinion of industry  pundits and price forecasters remains bearish for this continent's  natural gas production.  For the near term, production of natural gas  without a significant liquids component, or "dry" gas, remains a  difficult business in terms of attracting capital and garnering  investment.  Like most junior oil and natural gas explorers, Wrangler  West believes in the ultimate value of natural gas. 

 To manage responsibly through this pervasively weak natural gas market,  Wrangler West has limited exploration efforts for natural gas with the  objective of replacing the natural gas reserves we produce and focusing  new exploration activities toward crude oil.  We have been active at  land sales and continue to build a range of opportunities.  The oil  side of conventional exploration remains extremely competitive as the  entire industry is focused on adding oil production. 

 In the 2011 third quarter, we cased three newly-drilled wells.  We are  currently tying-in a natural gas well which we expect to commence  production during December 2011.  Testing and completing of the  remaining two wells continues.  We plan to underspend the approved 2011  capital budget of $8.0 million and expect to allocate future capital to  following up any successful exploration efforts heading into 2012. 

  

  





    WRANGLER WEST ENERGY CORP.                                          

    STATEMENTS OF FINANCIALPOSITION                                     

    (Stated in thousands of dollars) (Unaudited)                        

                                               September30, December 31,

                                                       2011         2010

    Assets                                                              

    Current assets                                                      

      Accounts receivable                       $       851  $     1,406

      Income tax receivable                               -           74

      Prepaid expenses                                  150          144

                                                      1,001        1,624

                                                                        

    Property, plant and equipment (note 6)           26,321       33,335

                                                $    27,322  $    34,959

                                                                        

    Liabilities and shareholders' equity                                

    Current liabilities                                                 

      Bank indebtedness (note 9)                $     1,726  $     6,354

      Accounts payable and accrued liabilities        2,156        3,260

                                                      3,882        9,614

                                                                        

    Decommissioning obligations (note 11)             2,247        2,705

                                                                        

    Deferred income tax                               2,994        3,403

                                                      9,123       15,722

                                                                        

    Shareholders' equity                                                

      Share capital (note 7)                         12,402       12,402

      Contributed surplus                             4,691        4,538

      Retained earnings                               1,106        2,297

                                                     18,199       19,237

                                                                        

                                                $    27,322  $    34,959






   





    WRANGLER WEST ENERGY CORP.                                             

    STATEMENTS OF OPERATIONS AND COMPREHENSIVELOSS                         

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

                                                                           

                                  Three monthsended      Nine monthsended
                                     September 30          September 30

                                     2011       2010       2011        2010

    Revenue                                                                

      Petroleum and natural gas                       $   9,562  $   10,228
      sales                      $  2,596  $   3,029

      Royalties                     (555)      (447)    (1,660)     (1,768)

                                    2,041      2,582      7,902       8,460

                                                                           

    Expenses                                                               

      Operating                       833      1,065      3,500       3,459

      General and                                         1,011         813
      administrative                  369        254

      Share-based payments                                   82         222
      (note 10)                        82         82

      Depletion and                                       3,784       4,076
      depreciation                  1,150      1,522

      Impairment of property,                                 -         921
      plant and equipment               -        921

      (Gain) loss on sale of                                932          23
      assets                        (108)          2

    Results from operating                              (1,407)     (1,054)
    activities                      (285)    (1,264)

                                                                           

    Finance                                                                

      Interest and accretion                                193         275
      (note 4)                         29         78

                                                                           

    Loss before income tax          (314)    (1,342)    (1,600)     (1,329)

                                                                           

    Current income tax benefit          -       (15)          -        (15)

    Deferred income tax benefit      (83)      (323)      (409)       (191)

                                                                           

    Net loss and comprehensive                        $ (1,191)  $  (1,123)
    loss                         $  (231)  $ (1,004)

                                                                           

    Net loss per share (note 8)                                            

      Basic and diluted          $ (0.04)  $  (0.16)  $  (0.18)  $   (0.17)






   

  

  





    WRANGLER WEST ENERGY CORP.                                            

    STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

    (Stated in thousands of dollars and shares)
    (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

      Share-based
      payments            -         -         153          -           153

      Net loss            -         -           -    (1,191)       (1,191)

    Balance at
    September 30,
    2011              6,466  $ 12,402  $    4,691  $   1,106  $     18,199

                                                                          

                                                                          

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

      Options
      exercised          25       112        (55)          -            57

      Share-based
      payments            -         -         321          -           321

      Net loss            -         -           -    (1,123)       (1,123)

    Balance at
    September 30,
    2010              6,441  $ 12,306  $    4,579  $   2,404  $     19,289






  

  





    WRANGLER WEST ENERGY CORP.                                            

    STATEMENTS OF CASH FLOWS                                              

    (Stated in thousands of dollars) (Unaudited)                          

                                                                          

                                                         Ninemonthsended
                                                          September 30 

                                                           2011        2010

    Cash provided by (used in):                                           

                                                                          

    Operating                                                             

      Net loss                                        $ (1,191)  $ (1,123)

      Items not involving cash:                                           

        Depletion and depreciation                        3,784      4,076

        Impairment of property, plant and equipment           -        921

        Accretion                                            50         57

        Share-based payments                                 82        222

        Loss on sale of assets                              932         23

        Deferred income tax benefit                       (409)      (191)

                                                          3,248      3,985

      Change in non-cash operating working capital     
      (note 5)                                              111        406

                                                          3,359      4,391

    Financing                                                             

      Decrease in bank indebtedness, original credit
      facility                                                -    (8,897)

      Increase (decrease) in bank indebtedness, new
      credit facility                                   (4,628)      6,189

      Issuance of common shares                               -         56

                                                        (4,628)    (2,652)

    Investing                                                             

      Property, plant and equipment expenditures        (3,203)    (4,545)

      Proceeds on sale of assets (note 6)                 5,064      3,509

      Change in non-cash investing working capital     
      (note 5)                                            (592)      (703)

                                                          1,269    (1,739)

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

                                                                          

    Supplementary cash flow information                                   

      Interest paid                                       (157)      (247)

      Income tax refund                                      74        472






 Reader Advisory  

 This news release contains forward-looking statements ("FLS") about  potential new crude oil and natural gas drilling, tie-ins, production  operations, sources and use of capital, asset purchases or dispositions  and expected future operations. Although Wrangler West believes the  expectations reflected in these FLS are reasonable, undue reliance  should not be placed on them because the Company can give no assurance  the FLS will prove to be correct. Since FLS address future events and  conditions, by their very nature they involve inherent risks and  uncertainties. A more detailed discussion of FLS is provided in  Wrangler West's Management's Discussion and Analysis for the three and  nine months ended September 30, 2011 which is filed on SEDAR (www.sedar.com).  The FLS contained in this news release are made as of the date  hereof and Wrangler West undertakes no obligation to update publicly or  revise any FLS 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, the Company's  mandate has been to use the drill bit to add shareholder value.  Disciplined management of operations and the 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. 

   

   

Wrangler West Energy Corp.


CONTACT:  Wrangler West Energy Corp.Steven F. JohnsonPresident and Chief Executive [e-mail]:  [phone] 


    

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