Wrangler West Energy Corp (TSXV:WX)
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CALGARY, Aug. 24, 2011 /CNW/ --
CALGARY, Aug. 24, 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 and six
months ended June 30, 2011 with comparative data for the three and six
months ended June 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.
HIGHLIGHTS
Three months ended June 30 Six months ended June 30
2011 2010 % Change 2011 2010 % Change
OPERATIONAL
HIGHLIGHTS
Production
Crude oil and NGL 238 297 (20) 243 299 (19)
(bbls/d)
Natural gas (mcf/d) 4,308 3,337 29 4,505 3,657 23
Total (boe/d) 956 853 12 994 909 9
Prices
Crude oil and NGL 92.47 68.96 34 85.34 71.59 19
($/bbl)
Natural gas ($/mcf) 3.98 4.18 (5) 3.95 5.02 (21)
Per boe ($)
Petroleum and 40.96 40.36 1 38.74 43.76 (11)
natural gas revenue
Royalties (6.95) (8.86) (22) (6.14) (8.03) (24)
Operating expenses (14.26) (15.77) (10) (14.84) (14.56) 2
Field netback 19.75 15.73 26 17.76 21.17 (16)
General and (3.85) (3.59) 7 (3.57) (3.40) 5
administrative
Interest (0.78) (0.78) - (0.70) (0.96) (27)
Funds flow from 15.12 11.36 33 13.49 16.81 (20)
operations
Share-based - (1.00) (100) - (0.85) (100)
payments
Depletion,
depreciation, and (13.11) (17.11) (23) (14.65) (15.52) (6)
amortization
Loss on sale of (11.98) (0.13) 9,115 (5.79) (0.13) 4,354
assets
Accretion (0.22) (0.23) (4) (0.21) (0.24) (13)
Deferred income tax 2.58 0.83 211 1.81 (0.80) (326)
benefit (expense)
Net loss (7.61) (6.28) 21 (5.35) (0.73) 633
FINANCIAL
HIGHLIGHTS ($
thousand)
Petroleum and 3,564 3,133 14 6,966 7,199 (3)
natural gas revenue
Royalties (605) (688) (12) (1,105) (1,321) (16)
Operating expenses (1,240) (1,224) 1 (2,668) (2,394) 11
General and (335) (279) 20 (642) (559) 15
administrative
Interest (67) (60) 12 (126) (159) (21)
Funds flow from 1,317 882 49 2,425 2,766 (12)
operations
Share-based - (78) (100) - (139) (100)
payments
Depletion,
depreciation, and (1,141) (1,329) (14) (2,634) (2,554) 3
amortization
Loss on sale of (1,042) (10) 10,320 (1,040) (21) 4,852
assets
Accretion (20) (18) 11 (37) (39) (5)
Deferred income tax 225 64 252 325 (132) (346)
benefit (expense)
Net loss (661) (489) 35 (961) (119) 708
Funds flow from
operations - basic 0.20 0.14 43 0.38 0.43 (12)
($/share)
Funds flow from
operations - 0.20 0.13 54 0.37 0.42 (12)
diluted ($/share)
Net loss - basic
and diluted (0.10) (0.08) 25 (0.15) (0.02) 650
($/share)
Total assets ($ 26,982 34,755 (22)
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 second quarter and first six
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 Six Month Highlights
-- $6.97 million in revenue
-- $2.43 million in funds flow from operations
-- $1.68 million in capital expenditures
-- $4.93 million sale of Grand Forks oil pool
Review of 2011 Six Months
For the six months ended June 30, 2011, Wrangler West produced 994 boe
per day, higher by nine percent when compared to the same period one
year ago. However, the Company's field netback fell significantly as
Wrangler West experienced a 21 percent decrease in the natural gas
price received. A 19 percent increase in crude oil price somewhat
offset the impact of the lower natural gas price. Operating costs
increased 11 percent overall, generally in line with our growth in
production. Funds flow from operations, at $2.43 million, declined 12
percent year-over-year due to lower commodity prices and higher costs.
However, Wrangler West experienced a 19 percent improvement in funds
flow for 2011 second quarter, compared to 2011 first quarter.
Capital Expenditures
Wrangler West invested $1.68 million in capital expenditures during the
first six months of 2011. The Company's capital was directed toward
the development of oil-prone exploration and development
opportunities. The capital invested during the six months was
primarily allocated to the acquisition of land and seismic to define
new and existing prospects. We expect to continue to build an
inventory of quality, seismically-defined drilling prospects throughout
2011 and, on completion of this exploratory work, intend to commence
drilling and testing our plays to confirm their commercial viability.
At June 30, Wrangler West's 2011 capital expenditures budget of $8.0
million was approximately 20 percent deployed. An extremely wet summer
following a prolonged spring break-up has prevented Wrangler West from
undertaking our usual summer drilling program. Standing water on our
drill-ready prospects will push much of Wrangler West's exploration
activity into the last half of 2011.
Commodity Prices
For 2011, Wrangler West's natural gas price has averaged almost $4.00
per mcf. During the first six months of 2011, natural gas prices
continued to disappoint producers and their shareholders. Natural gas
injection into storage is above the five year average and consumption
is lagging supply. The current AECO spot natural gas price is hovering
under $3.50 per mcf. We expect weak prices will continue until the
arrival of the 2011-2012 winter heating season. Fundamentally, there
is little margin for producers in $4.00 per mcf natural gas.
The United States industrial market and a more stable economy is
critical to a healthier natural gas market. An improvement in the
economic outlook south of the 49th parallel would likely foreshadow a
rather quick recovery in the North American natural gas price. Efforts
to establish new infrastructure to ship natural gas outside of North
America, if successful, should open up new markets for natural gas.
The timing to accomplish this potentially positive initiative to create
additional demand for natural gas is yet to be defined.
Crude oil price continues to be reasonably strong despite the recent
weakness resulting from the United States debt ceiling negotiations and
the pending European bank restructuring. During this period of global
uncertainty, oil prices have retreated.
In volatile markets, even a junior producer must factor world events
into day-to-day management of producing assets. During 2011 second
quarter, a period of strong oil prices, Wrangler West solicited bids to
maximize the value of the Grand Forks oil property which culminated in
the sale of this asset for $4.9 million. On completion of the sale,
the proceeds were applied to bank indebtedness which leaves the Company
with a significantly stronger balance sheet. Over the next few months,
we will focus on drilling our prospects with the intention of replacing
the production sold at Grand Forks.
Outlook for 2011
Wrangler West is working daily to build a solid inventory of drillable
oil-prone targets to fuel future growth. However, as global economies
restructure, managing and building a small conventional producer in
this unpredictable business climate is challenging. The Company has a
strong balance sheet and the positive cash flow to act on
opportunities. We have a significant portion of capital remaining in
our 2011 budget of $8.0 million. During the last half of 2011, we
expect to deploy capital to exploration prospects that meet Wrangler
West's risk/reward criteria.
________________________________________
WRANGLER WEST ENERGY CORP.
STATEMENTS OF FINANCIAL POSITION
(Stated in thousands of dollars)
(Unaudited)
June 30, December 31,
2011 2010
Assets
Current assets
Accounts receivable $ 1,152 $ 1,406
Income tax receivable - 74
Prepaid expenses 144 144
1,296 1,624
Property, plant and equipment 25,686 33,335
$ 26,982 $ 34,959
Liabilities and shareholders' equity
Current liabilities
Bank indebtedness $ 1,996 $ 6,354
Accounts payable and accrued liabilities 1,583 3,260
3,579 9,614
Decommissioning obligations 2,050 2,705
Deferred income tax 3,077 3,403
8,706 15,722
Shareholders' equity
Share capital 12,402 12,402
Contributed surplus 4,538 4,538
Retained earnings 1,336 2,297
18,276 19,237
$ 26,982 $ 34,959
WRANGLER WEST ENERGY CORP.
STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Stated in thousands of dollars, except
per share amounts)
(Unaudited)
Three months ended Six months ended
June 30 June 30
2011 2010 2011 2010
Revenue
Petroleum and natural $ 3,564 $ 3,133 $ 6,966 $ 7,199
gas sales
Royalties (605) (688) (1,105) (1,321)
2,959 2,445 5,861 5,878
Expenses
Operating 1,240 1,224 2,668 2,394
General and 335 279 642 559
administrative
Share-based payments - 78 - 139
Depletion, depreciation 1,141 1,329 2,634 2,554
and amortization
Loss on sale of assets 1,042 10 1,040 21
Results from operating (799) (475) (1,123) 211
activities
Finance
Interest and accretion 87 78 163 198
Earnings (loss) before (886) (553) (1,286) 13
income tax
Deferred income tax (225) (64) (325) 132
expense (benefit)
Net loss and $ (661) $ (489) $ (961) $ (119)
comprehensive loss
Net loss per share
Basic and diluted $ (0.10) $ (0.08) $ (0.15) $ (0.02)
WRANGLER WEST ENERGY CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
(Stated in thousands of
dollars and shares)
(Unaudited)
Number Total
of
common Share Contributed Retained shareholders'
shares capital surplus earnings equity
Balance at
January 1, 6,466 $ 12,402 $ 4,538 $ 2,297 $ 19,237
2011
Net loss - - - (961) (961)
Balance at 6,466 $ 12,402 $ 4,538 $ 1,336 $ 18,276
June 30, 2011
Balance at
January 1, 6,416 $ 12,194 $ 4,313 $ 3,527 $ 20,034
2010
Options 25 112 (55) - 57
exercised
Share-based - - 201 - 201
payments
Net loss - - - (119) (119)
Balance at 6,441 $ 12,306 $ 4,459 $ 3,408 $ 20,173
June 30, 2010
WRANGLER WEST ENERGY CORP.
STATEMENTS OF CASH FLOWS
(Stated in thousands of dollars)
(Unaudited)
Six months ended
June 30
2011 2010
Cash provided by (used in):
Operating
Net loss $ (961) $ (119)
Items not involving cash:
Depletion, depreciation and amortization 2,634 2,554
Accretion 37 39
Share-based payments - 139
Loss on sale of assets 1,040 21
Deferred income tax expense (benefit) (325) 132
2,425 2,766
Change in non-cash operating working 169 (242)
capital
2,594 2,524
Financing
Increase (decrease) in bank indebtedness, - (2,728)
original credit facility
Decrease in bank indebtedness, new credit (4,358) -
facility
Issuance of common shares - 56
(4,358) (2,672)
Investing
Property, plant and equipment expenditures (1,677) (2,817)
Proceeds on sale of assets held for sale 4,959 3,509
Change in non-cash investing working (1,518) (544)
capital
1,764 148
Cash and cash equivalents, beginning and end $ - $ -
of period
Supplementary cash flow information
Interest paid 124 208
Income tax paid (received) (74) 6
Reader Advisory
This news release contains forward-looking statements ("FLS") about
potential new crude oil and natural gas drilling, 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
six months ended June 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 +1 403 290 6800 or e-mail info@wranglerwest.ca).
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/August2011/24/c6068.html
p align="justify" bWrangle/bbr West Energy Corp./bbr/ Steven F. Johnsonbr/ President and Chief Executive Officerbr/ a href="mailto:info@wranglerwest.ca"info@wranglerwest.ca/abr/ telephone: (403) 290-6800 /p