Wrangler West 2010 Capex Adds New Production

CALGARY, Aug. 18 /CNW/ - Wrangler West Energy Corp. ("Wrangler West" or the "Company") (TSX-V "WX") announces today's filing on href="http://www.sedar.com/">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, 2010 with comparative data for the three and six months ended June 30, 2009 and the year ended December 31, 2009.

Highlights


  Three months ended Jun 30 Six months ended Jun 30
  2010 2009 % Change 2010 2009 % Change
OPERATIONAL HIGHLIGHTS
Production
Crude oil and NGL (bbls/d) 297 285 4 299 294 (2)
Natural gas (mcf/d) 3,337 4,992 (33) 3,657 5,335 (31)
Total (boe/d) 853 1,117 (24) 909 1,183 (23)
Prices
Crude oil and NGL ($/bbl) 68.96 59.17 17 71.59 49.61 44
Natural gas ($/mcf) 4.18 3.92 7 5.02 4.96 1
Per boe ($)
Petroleum and natural gas revenue 40.36 32.61 24 43.76 34.68 26
Royalties (8.86) (2.81) 215 (8.03) (4.26) 88
Operating expenses (15.77) (15.67) 1 (14.56) (15.00) (3)
Field netback 15.73 14.13 11 21.17 15.41 37
General and administrative (3.51) (2.72) 29 (3.31) (2.80) 18
Interest (0.78) (1.23) (37) (0.96) (1.09) (12)
Funds flow from operations 11.44 10.18 12 16.90 11.53 47
Depletion, depreciation, and accretion (25.72) (22.05) 17 (24.18) (24.32) (1)
Stock-based compensation (0.99) (0.41) 141 (0.88) (0.55) 60
Future income tax 3.11 2.36 32 1.42 3.10 (54)
Net loss (12.17) (9.93) 23 (6.74) (10.25) (34)
FINANCIAL HIGHLIGHTS ($ thousand)
Petroleum and natural gas revenue 3,133 3,315 (5) 7,199 7,425 (3)
Royalties (688) (286) 141 (1,321) (912) 45
Operating expenses (1,224) (1,593) (23) (2,395) (3,212) (25)
General and administrative (273) (277) (1) (545) (599) (9)
Interest (61) (125) (52) (158) (234) (32)
Funds flow from operations 888 1,034 (14) 2,780 2,468 13
Depletion, depreciation, and accretion (1,997) (2,241) (11) (3,977) (5,208) (24)
Stock-based compensation (77) (42) 84 (145) (118) 23
Future income tax 241 240 1 234 664 (65)
Net loss (945) (1,009) (6) (1,108) (2,195) (50)
Outstanding shares
(thousand, except where indicated)
Weighted average - basic 6,441 6,391 1 6,439 6,391 1
Weighted average - diluted 7,189 7,003 3 7,188 7,003 3
Funds flow from operations - basic ($/share) 0.14 0.16 (13) 0.43 0.39 10
Funds flow from operations - diluted ($/share) 0.12 0.15 (20) 0.39 0.35 11
Earnings (loss) - basic ($/share) (0.15) (0.16) (6) (0.17) (0.34) (50)
Earnings (loss) - diluted ($/share) (0.15) (0.16) (6) (0.17) (0.34) (50)
Total assets ($ thousand)       35,145 41,870 (16)
 
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 presents operating and financial results for 2010 second 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.

2010 Six Month Highlights

  • $7.2 million in revenue
  • $2.8 million in funds flow from operations
  • $2.8 million in capital expenditures
  • $3.5 million asset disposition
  • secured new $12 million credit facility

Production 2010 First Half
For the six months ended June 30, 2010, Wrangler West produced 909 barrels of oil equivalent ("boe") per day, lower by 23 percent compared to the same period one year ago. Production volumes were lower immediately following the disposition of our Craigmyle non-operated natural gas property which was producing 153 boe per day. Since the sale, we have increased production month by month which reflects our recent exploration success.

The 2010 second quarter was operationally difficult for several reasons. Primarily, wet weather caused an unusually long spring break-up which limited our ability to accomplish planned field activities until after the end of 2010 second quarter. Other factors included unforeseen pipeline and facility interruptions and surface access negotiations. These constraints delayed the tie-in of new production volumes and postponed some of our seismic exploration activities.

Capital Expenditures
Wrangler West's 2010 capital expenditures program remains at $6 million. In 2010 first half, we invested $2.8 million. Exploration activities resulted in the drilling of six wells year to date: three natural gas wells, two oil wells and one dry hole. We completed the cased wells early in July and recently tied-in two wells. At the time of this report, we have one cased and completed natural gas well awaiting tie-in. Current production is 1,100 boe per day.

Industry Conditions
Crude oil prices continue to be very stable. Oil exploration remains extremely competitive and requires deep pockets especially if there is the potential of a resource play. We continue to build our opportunities and increase our inventory of drillable prospects. We are encouraged by the success of our drilling efforts this year.

Wrangler West is a natural gas-weighted producer and this summer's natural gas prices continue to present a challenge. We look forward to the fall and winter heating season and expect some firming in natural gas markets as 2010 progresses. Daily natural gas injection into storage is below the five year average, while storage volumes still remain above the five year average. As withdrawals from storage increase, we expect natural gas prices should recover.

Outlook for 2010
Weak natural gas prices reduced cash flow and Wrangler West managed capital spending accordingly. We continue to believe in the future of natural gas. We have a proven exploration approach to limit our risk and provide an economic platform that justifies continuing investment. We are pushing hard to get back on track because we believe the future looks promising.

Additional Information
Additional shareholder and public information relating to Wrangler West Energy Corp. is filed on SEDAR and accessible at href="http://www.sedar.com/">www.sedar.com. This includes, among other documents, annual and interim reports to shareholders and the Statement of Reserves Data and Other Oil and Gas Information Form NI 51-101 F1, F2 and F3 effective December 31, 2009.

Alternatively, to obtain copies of published corporate information, contact Crista L. Ferguson, Controller, at 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).

Corporate Profile
Wrangler West is a Canadian junior 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 will continue to reinvest funds flow from operations and other available capital to protect and add future value. Wrangler West trades on the TSX Venture Exchange under the symbol "WX".

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

SOURCE Wrangler West Energy Corp.

For further information: For further information:

Wrangler West Energy Corp.
Steven F. Johnson
President and Chief Executive Officer
Steve@wranglerwest.ca
telephone: (403) 290-6800

Organization Profile

Wrangler West Energy Corp.

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