Wrangler West Plans Active 2008 Second Half



    CALGARY, Aug. 21 /CNW/ - Wrangler West Energy Corp. ("Wrangler West")
(TSX-V "WX") announces operating and financial results for the three and
six months ended June 30, 2008, together with comparative data for the same
period in 2007 and the year ended December 31, 2007.

    
    Financial and Operations Update

    -   $18.3 million in 2008 six month revenue; 22 percent increase;
    -   $7.8 million in 2008 six month funds flow from operations; 5 percent
        increase;
    -   $11 million remaining in capital program for 2008 second half;
    -   third party engineering analysis and report completed on Wabamun A
        oil pool;
    -   multi-stage fracture of horizontal oil wells planned for 2008 second
        half.
    

    2008 First Half Production

    Wrangler West delivered a production rate of 1,547 boe/d for the 2008
six months, lower by approximately 100 boe/d compared to the same period
one year ago. Production from our Riviere oil pool was curtailed by
approximately 76 boe/d in 2008 second quarter when we shut in wells to obtain
pressure data for our engineering evaluation and to design our horizontal well
multi-stage fracturing program.

    Commodity Prices and Risk Management

    Commodity prices for the 2008 first half have surpassed industry
expectations. Oil peaked above $140 per barrel. Lower natural gas supply,
fewer wells being drilled, reduced LNG deliveries to North America and storage
demand all combined to create stronger summer natural gas prices. Currently,
crude oil prices have softened to the $120 per barrel range and summer natural
gas recently weakened to the $7.00 per GJ range.
    Hedging losses, both realized and unrealized, are the story of the 2008
first half for many Canadian oil and natural gas producers. Wrangler West has
incurred $804,000 of realized hedging loss as result of our committed
commodity contracts. From April 1st to October 31st, 2008, Wrangler West
hedged 200 barrels of oil per day at Cdn $100.50 per barrel and 3,500 GJ/day
of natural gas at an average of $7.75 per GJ.

    2008 Capital Expenditures

    Wrangler West's capital expenditures budget for 2008 remains at
$15 million. To June 30, 2008, we have invested $4.4 million. We curtailed our
2008 second quarter spending during the prolonged spring break-up which was
followed by wet ground conditions. Our activity levels will increase
significantly in 2008 third and fourth quarter.

    Outlook

    Following commissioning and completing a study of the Wabamun A reservoir
to analyse mechanical well bore damage, our engineering team have designed a
multi-stage fracturing program for our Riviere horizontal oil wells. Testing
of core samples from these wells identified wellbore damage as a constraint to
production performance. We expect to conduct our first stimulation project in
August 2008. We continue to build our understanding of this complex oil pool
and are committed to our plan to capture the real value we believe it holds.
    Industry activity levels have been significantly reduced for the first
half of 2008. Record commodity prices and industry cash flows will drive
unspent capital budgets toward new exploration plays and mergers and
acquisitions. Capital markets focus on funding new exploration initiatives, as
evidenced by the injection of capital into new projects in the Bakken in
Saskatchewan and the Montney in British Columbia. These plays are similar to
our Wabamun A oil play where producers are applying new technology to unlock
tight reservoirs. We expect 2008 will continue to be a challenging, yet
dynamic, year for our industry and for Wrangler West.

    Steven F. Johnson
    President and Chief Executive Officer


    
                       2008 Second Quarter Highlights

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    OPERATIONAL HIGHLIGHTS
    Production
    Crude oil and NGL (bbls/d)   371     343       8     384     347      11
    Natural gas (mcf/d)        6,986   8,112     (14)  6,975   7,987     (13)
    Total (boe/d)              1,535   1,695      (9)  1,547   1,678      (8)
    -------------------------------------------------------------------------
    Prices
    Crude oil and NGL ($/bbl) 109.69   57.31      91   95.83   55.07      74
    Natural gas ($/mcf)        10.32    7.86      31    9.10    7.95      14
    -------------------------------------------------------------------------
    Per boe ($)
    Petroleum and natural
     gas revenues              73.45   49.23      49   64.86   49.20      32
    Royalties                 (14.96)  (9.58)     56  (12.89)  (9.69)     33
    Operating expenses        (13.10)  (9.58)     37  (13.22) (10.51)     26
    -------------------------------------------------------------------------
    Field netback              45.39   30.08      51   38.74   29.00      34
    General and
     administrative            (2.46)  (1.62)     52   (2.10)  (1.69)     24
    Interest                   (1.15)  (0.89)     29   (1.16)  (0.88)     32
    Current income taxes       (6.67)  (3.22)    107   (4.97)  (2.11)    136
    Realized loss on
     commodity contracts       (5.75)      -       -   (2.86)      -       -
    -------------------------------------------------------------------------
    Funds flow from
     operations                29.36   24.35      21   27.66   24.32      14
    Unrealized loss on
     commodity contracts      (11.59)      -       -   (9.13)      -       -
    Depletion, depreciation,
     and accretion            (25.26) (20.24)     25  (24.28) (20.33)     19
    Stock-based compensation   (0.41)  (2.53)    (84)  (0.48)  (1.43)    (66)
    Future income taxes
     (recovery)                 6.70    2.11     218    5.04    0.53     851
    -------------------------------------------------------------------------
    Net earnings (loss)        (1.19)   3.69    (132)  (1.19)   3.09    (139)
    -------------------------------------------------------------------------
    FINANCIAL HIGHLIGHTS
     ($ thousand)
    Petroleum and natural
     gas revenues             10,262   7,596      35  18,257  14,942      22
    Royalties                 (2,090) (1,478)     41  (3,630) (2,944)     23
    Operating expenses        (1,830) (1,477)     24  (3,722) (3,192)     17
    General and
     administrative             (344)   (249)     38    (591)   (512)     15
    -------------------------------------------------------------------------
    Interest                    (160)   (137)     17    (327)   (268)     22
    Current income taxes        (932)   (497)     88  (1,399)   (640)    119
    Realized loss on
     commodity contracts        (804)      -       -    (804)      -       -
    -------------------------------------------------------------------------
    Funds flow from
     operations                4,102   3,757       9   7,785   7,387       5
    -------------------------------------------------------------------------
    Unrealized loss on
     commodity contracts      (1,619)      -       -  (2,569)      -       -
    Depletion, depreciation,
     and accretion            (3,529) (3,122)     13  (6,835) (6,175)     11
    Stock-based compensation     (57)   (391)    (85)   (136)   (435)    (69)
    Future income taxes
     (recovery)                  936     325     188   1,420     160     785
    -------------------------------------------------------------------------
    Net earnings (loss)         (167)    570    (129)   (334)    938    (136)
    -------------------------------------------------------------------------
    Outstanding shares
     (thousand, except where
     indicated)
    Weighted average - basic   6,366   6,361       -   6,363   6,361       -
    Weighted average
     - diluted                 6,783   6,805       -   6,780   6,719       1
    -------------------------------------------------------------------------
    Funds flow from
     operations - basic
     ($/share)                  0.64    0.59       8    1.22    1.16       5
    Funds flow from
     operations - diluted
     ($/share)                  0.60    0.55       9    1.15    1.10       5
    Earnings (loss) - basic
     ($/share)                 (0.03)   0.09    (133)  (0.05)   0.15    (133)
    Earnings (loss) - diluted
     ($/share)                 (0.03)   0.08    (138)  (0.05)   0.14    (136)
    -------------------------------------------------------------------------
    Total assets ($ thousand)                         48,641  44,379      10
    -------------------------------------------------------------------------
    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.
    

    MANAGEMENT'S DISCUSSION & ANALYSIS

    Management of Wrangler West Energy Corp. ("Wrangler West" or the
"Company") prepared the following information as of August 19, 2008 and
recommends reading it in conjunction with the Company's audited financial
statements for the years ended December 31, 2007 and 2006 and the Company's
unaudited interim financial statements for the three and six months ended
June 30, 2008.

    Forward-Looking Statements Forward-Looking Statements

    Certain statements in this Management's Discussion and Analysis ("MD&A")
constitute forward-looking statements. Terms such as "may", "will", "should",
"expect", "plan", "anticipate", "believe", "intend", "estimate", "predict",
"potential", "continue" or other similar expressions are intended to identify
forward-looking statements. Forward-looking statements would include
statements as to Wrangler West's future outlook and anticipated events or
results, including in particular statements regarding Wrangler West's future
financial position, business strategy, projected expenses, capital
expenditures, financial results, taxes, plans and objectives involving
financing; commodity prices; number, type, timing and tie-in of wells drilled;
commencement and volume and cost of production. Statements relating to
reserves, including as to their magnitude, anticipated rate of recovery and
the present value of their future production, are forward-looking statements,
as they involve the assessment, based on certain estimates and assumptions,
that the reserves described can be profitably produced in the future.
Specifically, forward-looking statements are made or relied upon under the
headings "Depletion, Depreciation and Accretion" and "Outlook" below.
    By their nature, forward-looking statements are subject to numerous known
and unknown risks, uncertainties and other factors, as a result of which
actual results or events may differ materially from those anticipated in the
forward-looking statements. Such statements reflect the Company's current
views, based upon assumptions considered to be reasonable based on current
information, that are subject to risks, uncertainties and other factors
including, without limitation: results of operations, commodity prices,
royalty rates, performance and business prospects or opportunities, its
ability to discover and develop economic crude oil and natural gas reserves,
production of discovered reserves, costs of material and services, access to
production facilities and transportation, access to qualified and experienced
staff, contracts and markets, interest and currency exchange rates,
environmental and safety issues, surface access, and financial and liquidity
considerations, changes in regulatory standards, changes in applicable tax
laws and other factors set out in the Company's public disclosure documents.
    Many factors could cause the Company's actual results, performance or
achievements to vary from those described in this MD&A, including without
limitation those listed above, and the assumptions they are based upon proving
incorrect. These factors should not be considered exhaustive. Should one or
more of these risks or uncertainties materialize, or should one or more of the
assumptions underlying forward-looking statements prove incorrect, actual
results may vary materially from those described in this MD&A as intended,
planned, anticipated, believed, sought, proposed, estimated or expected.
Management cautions readers not to unduly rely upon the forward-looking
statements nor use the forward-looking statements contained in this MD&A for
purposes other than for which it is disclosed here. Wrangler West provides
this MD&A as of August 19, 2008 for the purpose of reporting financial and
operational results for the three and six months ended June 30, 2008. Wrangler
West disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required under securities laws.

    Non-GAAP Measures

    This MD&A contains the terms 'funds flow from operations' and 'netbacks',
which are not recognized measures under Canadian generally accepted accounting
principles (GAAP). Management believes, in addition to net earnings, funds
flow from operations is a useful supplemental measure in evaluating Company
performance. Management believes netbacks calculations are another useful
supplemental measure in assessing profitability relative to current commodity
prices. However, management cautions investors not to construe these
supplemental measures as being indicative of Company performance in the same
manner as net earnings which are determined in accordance with GAAP.
    Wrangler West's determination of funds flow from operations may not be
comparable to that reported by other companies. Funds flow from operations is
equal to cash flow from operations before changes in non-cash operating
working capital items as presented in the statement of cash flows. Wrangler
West presents funds flow from operations per share calculated on a basis
consistent with the calculation of earnings per share. Management calculates
netbacks using total revenue, minus realized losses on commodity contracts,
minus royalties and operating expenses and has reported netbacks before and
after realized losses resulting from commodity contracts.
    The table below illustrates the reconciliation between cash flow from
operations and funds flow from operations, as defined above, after changes in
working capital for the periods ended June 30, 2008 and 2007.

    
                                                Three months      Six months
                                                ended Jun 30    ended Jun 30
    -------------------------------------------------------------------------
    ($ thousand)                                2008    2007    2008    2007
    -------------------------------------------------------------------------
    Cash flow from operations                  4,709   4,421   4,102   7,585
    Change in non-cash working capital          (607)   (663)  3,684    (199)
    -------------------------------------------------------------------------
    Funds flow from operations                 4,102   3,757   7,786   7,387
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The table below illustrates the reconciliation of field netbacks after
recognizing realized losses on commodity contracts for the period ended
June 30, 2008 compared to the same period in 2007.

                                                Three months      Six months
                                                ended Jun 30    ended Jun 30
    -------------------------------------------------------------------------
    Per boe ($)                                 2008    2007    2008    2007
    -------------------------------------------------------------------------
    Field netback before realized loss
     on commodity contracts                    45.39   30.08   38.74   29.00
    Realized loss on commodity contracts       (5.75)      -   (2.86)      -
    -------------------------------------------------------------------------
    Field netback after realized loss
     on commodity contracts                    39.64   30.08   35.89   29.00
    General and administrative                 (2.46)  (1.62)  (2.10)  (1.69)
    Interest                                   (1.15)  (0.89)  (1.16)  (0.88)
    Current income taxes                       (6.67)  (3.22)  (4.97)  (2.11)
    -------------------------------------------------------------------------
    Funds flow from operations                 29.36   24.35   27.66   24.32
    Unrealized loss on commodity contracts    (11.59)      -   (9.13)      -
    Depletion, depreciation, and accretion    (25.26) (20.24) (24.28) (20.33)
    Stock-based compensation                   (0.41)  (2.53)  (0.48)  (1.43)
    Future income taxes (recovery)              6.70    2.11    5.04    0.53
    -------------------------------------------------------------------------
    Net earnings (loss)                        (1.19)   3.69   (1.19)   3.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Basis of Presentation

    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.

    REVIEW OF INTERIM FINANCIAL STATEMENTS

    Wrangler West's total production during 2008 second quarter remained
constant as the Company did not drill or tie-in any new production during
spring break-up.

    
    SELECTED QUARTERLY INFORMATION

    Three months ended                        Jun 30  Mar 31  Dec 31  Sep 30
    ($ thousand, except where indicated)        2008    2008    2007    2007
    -------------------------------------------------------------------------
    Total revenue(1)                          10,262   7,995   7,089   6,505

    Funds flow from operations                 4,102   3,683   3,269   2,815
    Funds flow from operations
      - basic ($/share)                         0.64    0.58    0.51    0.44
    Funds flow from operations
      - diluted ($/share)                       0.60    0.54    0.46    0.40

    Net earnings (loss)                         (167)   (167)    211    (228)
    Earnings (loss) - basic ($/share)          (0.03)  (0.03)   0.03   (0.04)
    Earnings (loss) - diluted ($/share)        (0.03)  (0.03)   0.03   (0.04)

    Total production (boe/d)                   1,535   1,558   1,642   1,678
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Three months ended                        Jun 30  Mar 31  Dec 31  Sep 30
    ($ thousand, except where indicated)        2007    2007    2006    2006
    -------------------------------------------------------------------------
    Total revenue                              7,596   7,346   4,921   4,611

    Funds flow from operations                 3,757   3,629   2,244   1,825
    Funds flow from operations
      - basic ($/share)                         0.59    0.57    0.35    0.29
    Funds flow from operations
      - diluted ($/share)                       0.55    0.55    0.34    0.28

    Net earnings (loss)                          570     368      (9)    402
    Earnings - basic ($/share)                  0.09    0.06       -    0.06
    Earnings - diluted ($/share)                0.08    0.06       -    0.06

    Total production (boe/d)                   1,695   1,660   1,143   1,082
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Total Revenue for the three months ended 2008 June 30, net of
        realized commodity contract losses, was $9,458.
    (1) Total Revenue for the three months ended 2008 June 30, net of
        realized and unrealized commodity contract losses, was $7,839.
    

    Wrangler West's funds flow from operations increased year over year.
Fluctuations in this table's key indicators from quarter to quarter result
primarily from fluctuations in exploration activities and success; timing and
costs of surface access; seasonal limitations; changes in regulations and
regulatory compliance; facilities turnarounds; commodity price volatility; and
other operational issues which arise from time to time. Readers can reference
the appropriate interim period MD&A for a detailed analysis and explanation of
the variance between individual quarters.

    
    PRODUCTION
    Daily Production
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($ thousand)                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Oil and NGL (bbls/d)         371     343       8     384     347      11
    Natural gas (mcf/d)        6,986   8,112     (14)  6,975   7,987     (13)
    Total (boe/d)              1,535   1,695      (9)  1,547   1,678      (8)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Total production for the three and six months ended June 30, 2008
decreased reflecting, in part, normal production declines. For 60 days of 2008
second quarter, an estimated 76 boe/d of production was shut-in at Riviere to
collect reservoir pressure data.
    Total production of 1,535 boe/d for 2008 second quarter remained constant
compared to 2008 first quarter (1,558 boe/d). Wrangler West did not drill any
wells during 2008 second quarter due to the prolonged spring break-up.

    
    REVENUES
    Production Revenues
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($ thousand)                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Oil and NGL                3,704   1,791     107   6,699   3,445      94
    Natural gas                6,558   5,805      13  11,558  11,487       1
    -------------------------------------------------------------------------
    Petroleum and natural gas
     revenues before realized
     loss on commodity
     contracts                10,262   7,596      35  18,257  14,942      22
    Realized loss on
     commodity contracts        (804)      -       -    (804)      -       -
    -------------------------------------------------------------------------
    Petroleum and natural gas
     revenues after realized
     loss on commodity
     contracts                 9,458   7,596      25  17,453  14,942      17
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Prices before realized loss on commodity contracts

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Oil and NGL ($/bbl)       109.69   57.31      91   95.83   55.07      74
    Natural gas ($/mcf)        10.32    7.86      31    9.10    7.95      14
    Total production ($/boe)   73.45   49.23      49   64.86   49.20      32
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the three and six months ended June 30, 2008, Wrangler West recognized
a significant increase in total revenue before realized and unrealized loss on
commodity contracts due to the strength in overall commodity prices.


    Prices after realized loss on commodity contracts

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Oil and NGL ($/bbl)        96.36   57.31      68   89.39   55.07      62
    Natural gas ($/mcf)         9.76    7.86      24    8.83    7.95      11
    Total production ($/boe)   67.69   49.23      37   62.00   49.20      26
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    To offset negative volatility in commodity prices and to secure
predictable cash flow to manage its capital expenditures program, Wrangler
West entered into three commodity contracts during 2008 first quarter. The
unrealized loss on these commodity contracts at June 30, 2008 was
$2.6 million.
    Total production revenues for 2008 second quarter increased 28 percent
from 2008 first quarter reflecting the improvement in overall commodity
prices.

    
    ROYALTIES
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($ thousand)                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Crown                      1,034     756      37   1,822   1,675       9
    Other                      1,057     722      46   1,808   1,269      42
    -------------------------------------------------------------------------
    Total royalties            2,090   1,478      41   3,630   2,944      23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($/boe)                     2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Crown                       7.40    4.90      51    6.47    5.52      17
    Other                       7.56    4.68      62    6.42    4.18      54
    -------------------------------------------------------------------------
    Total royalties            14.96    9.58      56   12.89    9.69      33
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the three and six months ended June 30, 2008, total royalties
increased consistent with higher commodity prices. Royalties, as a percentage
of revenue, for the three and six months, as well as the comparative period in
2007, remain consistent at approximately 20 percent.
    Wrangler West expects the 2008 royalty rate, as a percentage of revenue,
to remain consistent with that of the 2007 annualized rate of 21 percent.
    Since a significant portion of Wrangler West's production is subject to
freehold royalties, rather than crown royalties, the Company expects changes
to the Alberta royalty regime in 2009 will have a marginal impact on total
royalties.

    
    OPERATING EXPENSES
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Operating expenses
     ($ thousand)              1,830   1,477      24   3,722   3,192      17
    Operating expenses
     ($/boe)                   13.10    9.58      37   13.22   10.51      26
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the three and six months ended June 30, 2008, total operating
expenses increased due to repairs and maintenance conducted on certain wells.
    For the three months ended June 30, 2008, Wrangler West included crude
oil trucking expenses of $3.99 per bbl (2007 - $4.09 per bbl). For 2008 first
quarter, crude oil trucking expenses of $3.65 per bbl were included in
operating expenses.
    In 2008 second quarter, operating expenses decreased 3 percent (2 percent
on a per boe basis) from 2008 first quarter.

    
    NETBACKS
    Field netbacks before realized loss on commodity contracts

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($/boe)                     2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Light and medium
     crude oil ($/bbl)         71.01   27.24     161   60.16   24.39     147
    Natural gas ($/mcf)         6.24    5.12      22    5.30    4.97       7
    NGL ($/bbl)                51.24   33.02      55   50.30   37.08      36
    Combined netback ($/boe)   45.39   30.08      51   38.74   29.00      34
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the three and six months ended June 30, 2008, netbacks increased due
to the strength of commodity prices received.
    Combined netbacks before realized loss for 2008 second quarter increased
41 percent from 2008 first quarter ($32.19 per boe).

    Field netbacks after realized loss on commodity contracts

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($/boe)                     2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Light and medium
     crude oil ($/bbl)         57.27   27.24     110   53.46   24.39     119
    Natural gas ($/mcf)         5.68    5.12      11    5.02    4.97       1
    NGL ($/bbl)                51.24   33.02      55   50.30   37.08      36
    Combined netback ($/boe)   39.64   30.08      32   35.89   29.00      24
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Combined netbacks after realized loss for 2008 second quarter increased 23
percent from 2008 first quarter ($32.19 per boe).

    GENERAL AND ADMINISTRATIVE (G&A)

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    G&A ($ thousand)             344     249      38     591     512      15
    G&A ($/boe)                 2.46    1.62      52    2.10    1.69      24
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the three and six months ended June 30, 2008, total G&A increased
from the comparative periods reflecting staffing and office cost increases.
    At June 30, 2008, Wrangler West capitalized G&A of $348,000 (2007 -
$421,000) associated with exploration activities.
    G&A for 2008 second quarter increased 39 percent (41 percent on a per boe
basis) from 2008 first quarter, reflecting lower overhead recoveries and
one-time expenditures incurred for public company annual reporting. Wrangler
West expects 2008 G&A per boe to increase from the 2007 annualized rate of
$2.34 per boe.

    
    INTEREST EXPENSE
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Interest ($ thousand)        160     137      17     327     268      22
    Interest ($/boe)            1.15    0.89      29    1.16    0.88      32
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Interest expense for the six months ended June 30, 2008 represented
interest charges for the use of Wrangler West's demand revolving operating
credit facility ("credit facility"). The Company uses the credit facility to
fund its capital expenditures program.
    Interest expense in 2008 second quarter decreased 3 percent (2 percent on
a per boe basis) from 2008 first quarter due to decreased utilization of the
credit facility.

    
    STOCK-BASED COMPENSATION
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Stock-based compensation
     ($ thousand)                 57     391     (85)    136     435     (69)
    Stock-based compensation
     ($/boe)                    0.41    2.53     (84)   0.48    1.43     (66)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    At June 30, 2008, Wrangler West had outstanding 1,232,000 options to
purchase common shares. There were no options granted during 2008. During 2008
second quarter, 30,000 stock options were exercised.
    For the three and six months ended June 30, 2008, total stock-based
compensation was $190,816 (2007 - $684,946) of which Wrangler West capitalized
$129,060 (2007 - $250,401) relating to exploration and development activities.
All outstanding stock options fully vest in November 2008.
    In 2008 second quarter, stock-based compensation decreased 26 percent
from 2008 first quarter.

    
    DEPLETION, DEPRECIATION AND ACCRETION ("DD&A")

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Depletion, depreciation
     and accretion
     ($ thousand)              3,529   3,122      13   6,835   6,175      11
    Depletion, depreciation
     and accretion ($/boe)     25.26   20.24      25   24.28   20.33      19
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The increase in DD&A on a per boe basis for the three and six months
ended June 30, 2008 reflects a lower production rate and minimal reserves
additions from exploration success. During the three months ended June 30,
2008, a prolonged spring break-up deferred investment in exploration and
development of oil and natural gas properties. A significant portion of 2008
first quarter expenses related to facilities expansion and tie-in for existing
reserves.
    DD&A for 2008 first quarter was $23.32 on a per boe basis.

    
    INCOME TAXES
                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($ thousand)                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Current income taxes         932     497      88   1,399     640     119
    Future income taxes
     expense (recovery)         (936)   (325)    188  (1,420)   (160)    785
    -------------------------------------------------------------------------
    Total ($/boe)                 (5)    171    (103)    (21)    479    (104)
    Current income taxes        6.67    3.22     107    4.97    2.11     136
    Future income taxes
     expense (recovery)        (6.70)  (2.11)    218   (5.04)  (0.53)    851
    -------------------------------------------------------------------------
    Total                      (0.03)   1.11    (103)  (0.07)   1.58    (104)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Tax pools as at June 30, 2008 sheltered approximately $4.4 million of
income for tax purposes resulting in $1.4 million of current income tax for
the six month period. For the six months ended June 30, 2008, Wrangler West
recognized a future income tax recovery of $1.4 million, resulting in a net
income tax recovery of $21,000.

    As at June 30, 2008, Wrangler West recognized a future tax asset of
$761,000 related to the unrealized loss on commodity contracts.

    
    EARNINGS

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Net earnings (loss)
     ($ thousand)               (167)    570    (129)   (334)    938    (136)
    Net earnings (loss)
     ($/boe)                   (1.19)   3.69    (132)  (1.19)   3.09    (139)

    Earnings (loss) - basic
     ($/share)                 (0.03)   0.09    (133)  (0.05)   0.15    (133)
    Earnings (loss) - diluted
     ($/share)                 (0.03)   0.08    (138)  (0.05)   0.14    (136)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the three and six months ended June 30, 2008, Wrangler West's
earnings were negatively impacted by the realized and unrealized loss
attributed to commodity contracts.
    Wrangler West recorded a loss of $167,000 for both 2008 second quarter
and 2008 first quarter or $0.03 on a per share basis for each quarter.

    
    FUNDS FLOW AND LIQUIDITY

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
                                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Funds flow from operations
     ($ thousand)              4,102   3,757       9   7,786   7,387       5
    Funds flow from operations
     ($/boe)                   29.36   24.35      21   27.66   24.32      14

    Funds flow from operations
      - basic ($/share)         0.64    0.59       8    1.22    1.16       5
    Funds flow from operations
      - diluted ($/share)       0.60    0.55       9    1.15    1.10       5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the three and six months ended June 30, 2008, Wrangler West's funds
flow from operations increased, primarily due to higher commodity prices.
    As at June 30, 2008, Wrangler West had drawn $11.2 million on its credit
facility compared to $11.6 million drawn at December 31, 2007.
    In 2008, the Company will use available funds flow from operations and
its credit facility to fulfill an estimated $15.0 million capital program. A
shortfall in available funds resulting from significantly weaker commodity
prices would require review and reprioritization of Wrangler West's ongoing
capital program. If new business opportunities arise, Wrangler West would
pursue an increase in the credit facility, or seek alternate funding in the
equity markets to capture those opportunities.
    At June 30, 2008, Wrangler West had a working capital deficiency,
including bank debt, of $13.9 million (2007 second quarter - $10.5 million).
    In May 2008, Wrangler West's authorized amount of credit facility
increased to $20 million from $17.5 million. Wrangler West expects increased
production volumes and its corporate reserves base will continue to support
the credit facility.

    
    TOTAL CAPITALIZATION

    ($ thousand except where noted)                      As at June 30, 2008
    -------------------------------------------------------------------------
    Common shares outstanding (thousand)                               6,391
    Closing market price at June 30 ($/share)                          10.50

    Market value of common shares                                     67,104
    Net debt                                                          13,884
    -------------------------------------------------------------------------
    Total capitalization                                              80,988
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    As at August 19, 2008, Wrangler West had 6,390,827 common shares
outstanding.

    CAPITAL EXPENDITURES

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
    -------------------------------------------------------------------------
                                                 %                       %
    ($ thousand)                2008    2007  Change    2008    2007  Change
    -------------------------------------------------------------------------
    Land                          41     348     (88)    359     569     (37)
    Seismic                        -     916    (100)    275   1,178     (77)
    Capitalized general and
     administrative expenses     183     236     (22)    348     421     (17)
    Drilling and completions     170   1,493      89   1,114   3,353     (67)
    Production equipment and
     gathering systems            15     610     (98)  2,341   1,508      55
    -------------------------------------------------------------------------
    Total capital expenditures   409   3,603     (89)  4,438   7,030     (37)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    In the six months ended June 30, 2008, Wrangler West drilled one dry and
abandoned ("D&A") well (2007 - four wells; one of which was D&A).
    For the three months ended June 30, 2008, Wrangler West deferred capital
expenditures during spring break-up and continued to accumulate wellbore data
for the third party engineering analysis of the Riviere Wabamun A oil pool.
Wrangler West's capital expenditures have resumed in 2008 third quarter.
    Wrangler West continues to use funds flow from operations and the demand
revolving operating credit facility to support its capital expenditures
program.

    INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")

    In February 2008, the CICA Accounting Standards Board ("AcSB") confirmed
the changeover to IFRS from Canadian GAAP will be required for public
companies effective for interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2011. The AcSB issued the
"omnibus" exposure draft of IFRS with comments due by July 31, 2008, wherein
Canadian public companies are permitted to early adopt. The Canadian
Securities Administrators ("CSA") has also issued Concept Paper 52-402, which
requested feedback on the early adoption of IFRS. The eventual changeover to
IFRS represents changes due to new accounting standards. The transition from
current Canadian GAAP to IFRS is a significant undertaking that may affect
Wrangler West's reported financial position and results of operations.
    Wrangler West has not completed development of an IFRS changeover plan,
which will include project structure and governance, resourcing and training,
analysis of key GAAP differences and a phased plan to assess accounting
policies under IFRS as well as potential IFRS exemptions. During the latter
part of 2008, Wrangler West will complete IFRS project scoping, which will
include a timetable for assessing the impact on data systems, internal
controls over financial reporting, and business activities, such as financing
and compensation arrangements.

    OUTLOOK

    Wrangler West's 2008 capital expenditures are budgeted at approximately
$15 million. To date, we have invested $4.4 million. We anticipate
accelerating our capital program in the third and fourth quarter. Wrangler
West continues to pursue the reserves in the Riviere Wabamun A pool. We have
built an inventory of new natural gas prospects and have drilled two natural
gas wells since the end of 2008 second quarter.
    To date, the horizontal oil wells at Riviere have underperformed.
Wrangler West commissioned a third party engineering study which identifies
mechanical damage in the horizontal open wellbores. To rectify this mechanical
damage, Wrangler West will undertake a program to case, cement and multi-stage
fracture the horizontal wells. Our first two recompletion programs are planned
for 2008 third quarter. If these recompletions are successful and oil
production rates improve, Wrangler West will undertake the same work on the
remaining horizontal wells and will drill additional horizontal wells in the
Wabamun A pool.
    Wrangler West has benefited from strong commodity prices during the first
six months of 2008. Although prices have softened early in 2008 third quarter,
they remain relatively high on an historical basis. Current commodity prices
continue to offer oil and natural gas producers significant opportunities to
add value.

    ADDITIONAL INFORMATION

    Additional information relating to Wrangler West Energy Corp. is filed on
SEDAR and accessible at www.sedar.com. To obtain copies of published corporate
information, contact JoAnne Dorval-Dronyk at Wrangler West Energy Corp. 1950,
444 Fifth Avenue SW, Calgary, Alberta, Canada T2P 2T8 or e-mail
JoAnne@wranglerwest.ca.


    
                         Wrangler West Energy Corp.
                           Interim Balance Sheets
                                 (unaudited)

                                                        June 30  December 31
                                                           2008         2007
    -------------------------------------------------------------------------
    Assets
    Current assets
      Accounts receivable                           $ 3,607,371  $ 2,729,405
      Prepaid expenses                                  458,763      471,548
      Future income taxes                               760,938            -
    -------------------------------------------------------------------------
                                                      4,827,072    3,200,953

    Property and equipment                           43,814,221   45,949,078
    -------------------------------------------------------------------------
                                                    $48,641,293  $49,150,031
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and shareholders' equity
    Current liabilities
      Bank indebtedness                             $11,186,648  $11,557,480
      Accounts payable and accrued liabilities        4,104,027    6,402,768
      Commodity contract liability                    2,569,000            -
      Income taxes payable                              851,785      829,583
    -------------------------------------------------------------------------
                                                     18,711,460   18,789,831

    Asset retirement obligation                       1,958,814    1,875,201

    Future income taxes                               5,231,337    5,840,893
    -------------------------------------------------------------------------
                                                     25,901,611   26,505,925

    Shareholders' equity
      Share capital (note 2)                         11,309,057   11,070,257
      Contributed surplus (note 2)                    3,311,017    3,120,201
      Retained earnings                               8,119,608    8,453,648
    -------------------------------------------------------------------------
                                                     22,739,682   22,644,106
    Commitments  (note 3)

    -------------------------------------------------------------------------
                                                    $48,641,293  $49,150,031
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying notes to interim financial statements



                         Wrangler West Energy Corp.
                       Interim Statements of Earnings
                            and Retained Earnings
                                 (unaudited)

                        Three months ended June 30  Six months ended June 30
                                 2008         2007         2008         2007
    -------------------------------------------------------------------------
    Revenue
      Petroleum and
       natural gas        $10,262,179  $ 7,595,892  $18,256,843  $14,942,253
      Realized loss on
       commodity contracts
       (note 3)              (803,953)           -     (803,953)           -
      Unrealized loss on
       commodity contracts
       (note 3)            (1,619,031)           -   (2,569,000)           -
      Royalties            (2,090,334)  (1,477,983)  (3,629,511)  (2,943,515)
    -------------------------------------------------------------------------
                            5,748,861    6,117,909   11,254,379   11,998,738

    Expenses
      Operating             1,829,789    1,477,344    3,721,630    3,192,156
      General and
       administrative         343,624      249,373      590,683      512,261
      Interest                160,401      137,248      326,501      268,084
      Stock-based
       compensation            57,457      390,534      135,556      434,545
      Depletion,
       depreciation and
       accretion            3,528,733    3,122,092    6,834,796    6,174,754
    -------------------------------------------------------------------------
                            5,920,004    5,376,591   11,609,166   10,581,800
    -------------------------------------------------------------------------
    Earnings (loss) before
     income taxes            (171,143)     741,318     (354,787)   1,416,938

    Current income taxes      931,785      496,625    1,398,780      639,625
    Future income taxes
     (recovery)              (936,386)    (325,333)  (1,419,527)    (160,333)
    -------------------------------------------------------------------------
                               (4,601)     171,292      (20,747)     479,292
    -------------------------------------------------------------------------

    Net earnings (loss)
     and comprehensive
     income (loss)           (166,542)     570,026     (334,040)     937,646

    Retained earnings,
     beginning of period    8,286,150    7,900,784    8,453,648    7,533,164

    -------------------------------------------------------------------------

    Retained earnings,
     end of period        $ 8,119,608  $ 8,470,810  $ 8,119,608  $ 8,470,810
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per
     share - basic        $     (0.03) $      0.09  $     (0.05) $      0.15
    Earnings (loss) per
     share - diluted      $     (0.03) $      0.08  $     (0.05) $      0.14
    -------------------------------------------------------------------------
    See accompanying notes to interim financial statements



                         Wrangler West Energy Corp.
                             Interim Statements
                                of Cash Flows
                                 (unaudited)

                        Three months ended June 30  Six months ended June 30
                                 2008         2007         2008         2007
    -------------------------------------------------------------------------
    Cash provided by
     (used in):

    Operating
      Net earnings (loss) $  (166,542) $   570,026  $  (334,040) $   937,646
      Items not involving
       cash
        Depletion,
         depreciation and
         accretion          3,528,733    3,122,092    6,834,796    6,174,754
        Stock-based
         compensation          57,457      390,534      135,556      434,545
        Unrealized loss
         on commodity
         contracts          1,619,031            -    2,569,000            -
        Future income
         taxes               (936,386)    (325,333)  (1,419,527)    (160,333)
    -------------------------------------------------------------------------
                            4,102,293    3,757,319    7,785,785    7,386,612
        Change in non-cash
         operating working
         capital              607,126      663,410   (3,683,655)     198,840
    -------------------------------------------------------------------------
                            4,709,419    4,420,729    4,102,130    7,585,452

    Financing
      Increase (decrease)
       in bank
       indebtedness        (2,559,567)  (1,488,800)    (370,832)    (800,346)
      Issuance of common
       shares                 165,000            -      165,000            -
    -------------------------------------------------------------------------
                           (2,394,567)  (1,488,800)    (205,832)    (800,346)
    Investing
      Additions to
       petroleum and
       natural gas
       properties            (408,574)  (3,602,878)  (4,438,232)  (7,029,614)
      Change in non-cash
       investing working
       capital             (1,906,278)     670,949      541,934      244,508
    -------------------------------------------------------------------------
                           (2,314,852)  (2,931,929)  (3,896,298)  (6,785,106)

    Cash and cash
     equivalents,
     beginning and end
     of period                      -            -            -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary cash
     flow information
      Interest paid       $   170,331  $   138,193  $   330,337  $   263,369
      Cash taxes paid     $    80,000            -  $ 1,240,000            -

    See accompanying notes to interim financial statements



                         Wrangler West Energy Corp.
                  Notes to the Interim Financial Statements
              Three and six months ended June 30, 2008 and 2007
                                 (unaudited)

    Wrangler West Energy Corp. (the "Corporation") was incorporated on
    March 17, 2000 under the Business Corporations Act (Alberta). The
    Corporation's primary business activity is the exploration for,
    development and production of, petroleum and natural gas in the Province
    of Alberta, Canada.

    The preparation of the financial statements in conformity with Canadian
    generally accepted accounting principles requires management to make
    estimates and assumptions that affect the reported amounts of assets and
    liabilities and disclosure of contingent assets and liabilities at the
    dates of the financial statements and the reported amounts of revenue and
    expenses during the reporting periods. Actual results could differ from
    those estimates.

    1.  Significant accounting policies

    Management prepared the interim financial statements of the Corporation
    in accordance with generally accepted accounting principles in Canada.
    The interim financial statements have been prepared following the same
    accounting policies and methods of computation as the financial
    statements for the year ended December 31, 2007. Management has omitted
    or condensed certain information and disclosures normally required as
    inclusions in the notes to the annual financial statements. These interim
    financial statements and the notes thereto should be read in conjunction
    with the annual financial statements in the Corporation's 2007 annual
    report.

    As of January 1, 2008, the Corporation was required to adopt the new
    Canadian Institute of Chartered Accountants ("CICA") standard, Section
    3862 "Financial Instruments - Disclosures". The new disclosure standard
    increases the emphasis on the disclosure of the risks associated with
    both recognized and unrecognized financial instruments and how those
    risks are managed. (See Note 3)

    As of January 1, 2008, the Corporation was required to adopt the new CICA
    Section 1535 "Capital Disclosures" which requires companies to disclose
    their objectives, policies and processes for managing capital. (See
    Note 4)

    2.  Share capital

        (a) Contributed surplus

            The table below provides a reconciliation of contributed surplus
            for the six months ended June 30.

            -----------------------------------------------------------------
                                                                        2008
            -----------------------------------------------------------------

            Balance, beginning of period                         $ 3,120,201
            Stock-based compensation costs                           190,816
            -----------------------------------------------------------------
            Balance, end of period                               $ 3,311,017
            -----------------------------------------------------------------
            -----------------------------------------------------------------

        (b) Per share amounts

            For the six months ended June 30, 2008, the number of weighted
            average common shares outstanding used in calculating net
            earnings (loss) per share was 6,363,349 basic and 6,779,992
            diluted (2007 - 6,360,827 basic and 6,718,813 diluted).

    3.  Financial instruments

        (a) Fair value

            The Corporation's financial instruments recognized in the balance
            sheet consist of accounts receivable, bank indebtedness and
            accounts payable and accrued liabilities. The fair values of
            these financial instruments approximate their carrying amounts
            due to their short terms to maturity or the market interest rate
            on the bank indebtedness.

        (b) Commodity price risk

            Wrangler West enters into commodity contracts, including crude
            oil and natural gas swap or option contracts, to reduce the
            fluctuation in future cash flow from operations related to the
            volatility of crude oil and natural gas commodity prices. Swap
            contracts reduce the fluctuations in petroleum and natural gas
            revenues by locking-in fixed forward prices on a portion of the
            Corporation's crude oil and natural gas production. Commodity
            prices higher than the contract price will result in a loss.
            Conversely, commodity prices that fall below the contract price
            will result in a gain.

            Wrangler West entered into the following commodity contracts in
            February, 2008.

            Product      Start     End        Volume        Price
            -----------------------------------------------------------------

            Natural gas  1 Apr 08  31 Oct 08  1,500 GJ/day  $  7.520 per GJ
            Natural gas  1 Apr 08  31 Oct 08  2,000 GJ/day  $  7.925 per GJ
            Crude oil    1 Apr 08  31 Oct 08  200 bbls/day  $100.500 per bbl

            The unrealized loss on commodity contracts at June 30, 2008 was
            $2,569,000 based on market prices on that date.

            A natural gas price increase or decrease of $0.10 per GJ at
            June 30 would have resulted in a $43,000 adjustment to the
            unrealized loss on the commodity contracts for the six months
            ended June 30, 2008. A crude oil price increase or decrease of
            $1.00 per barrel at June 30 would have resulted in a $25,000
            adjustment to the unrealized loss on the commodity contracts for
            the six months ended June 30, 2008.

        (c) Credit risk

            The Corporation's accounts receivable are with customers and
            joint venture partners in the petroleum and natural gas business
            and are subject to normal credit risk. The Corporation mitigates
            the concentration of credit risk by marketing production to
            numerous purchasers under normal industry sale and payment terms
            and routinely assesses the financial strength of its customers.
            In the event of non-performance by counterparties to commodity
            price contracts, the Corporation may have exposure to certain
            losses. The Corporation mitigates this risk by entering into
            transactions with highly-rated major financial institutions.

            The Corporation's credit exposure at June 30, 2008 was
            the accounts receivable balance of $3.6 million, of which
            $3.3 million was received, pursuant to standard industry
            practice, on July 25, 2008. No accounts receivable were written
            off and no allowance for bad debt was established in the six
            months ended June 30, 2008.

        (d) Interest rate risk

            Interest rate risk is created by fluctuations in the fair values
            or cash flows of financial instruments due to changes in the
            market interest rates. The Corporation is exposed to interest
            rate fluctuations on its bank credit facility which is market
            rate based (variable interest rates).

            If the bank prime rate changes by 25 basis points, the
            Corporation's interest rate will also change by 25 basis points.
            An interest rate increase or decrease of 25 basis points during
            the six months ended June 30, 2008 would have resulted in
            approximately a $16,000 increase or decrease in interest expense
            for the period.

        (e) Liquidity risk

            Liquidity risk addresses whether the Corporation will meet its
            financial obligations as they are due. The Corporation's approach
            to managing liquidity is to ensure, as far as possible, it will
            have sufficient liquidity to meet its liabilities when due, under
            both normal and stressed conditions without incurring
            unacceptable losses or risking harm to the Corporation's
            reputation.

            The Corporation prepares annual capital expenditure budgets,
            which are regularly monitored and updated as considered
            necessary. Further, the Corporation requires authorizations for
            expenditures on both operated and non-operated projects to manage
            capital expenditures. The Corporation matches its payment cycle
            to the collection of petroleum and natural gas revenues on the
            25th of each month.

            To support the capital expenditures program, the Corporation has
            a demand revolving operating credit facility (the "credit
            facility") subject to annual review by the lender. On May 12,
            2008, the Corporation's credit facility increased to $20 million
            from $17.5 million. The credit facility bears interest based on
            the Corporation's debt to cash flow ratio determined at the most
            recently completed fiscal quarter.

            Credit facility utilization up to $17.5 million bears interest at
            the bank's prime rate plus 5 basis points for a debt to cash flow
            ratio less than or equal to 1:1.

            If the Corporation's debt to cash flow ratio increases, the
            interest rate increases to a maximum of prime plus 80 basis
            points for a debt to cash flow ratio greater than 3:1.

            Utilization of the credit facility greater than $17.5 million
            increases the interest rate by 25 basis points.

            At June 30, 2008, the Corporation had drawn $11.2 million on the
            credit facility. Net debt at June 30, 2008 was $13.9 million.

    4.  Capital management

    Wrangler West's objectives when managing capital are to: (1) deploy
    capital to provide an appropriate return on investment to shareholders;
    (2) maintain financial flexibility to preserve the Corporation's ability
    to meet financial obligations; and (3) maintain a capital structure that
    provides financial flexibility to manage the Corporation's ongoing
    exploration program.

    The Corporation's strategy is to maintain a flexible capital structure
    consistent with its business objectives and to respond to changes in
    economic conditions while managing the risk characteristics of the
    underlying petroleum and natural gas assets. Capital structure is
    considered to include share capital, bank debt, and working capital. To
    maintain or adjust capital structure, the Corporation may issue new
    common shares, increase debt, or adjust capital spending.

    A key measure Wrangler West utilizes in evaluating capital structure is
    the ratio of net debt to annualized funds flow from operations. The ratio
    is calculated as net debt, defined as outstanding bank debt plus or minus
    working capital, divided by annualized funds flow from operations before
    asset retirement obligations and changes in non-cash working capital for
    the most recent quarter, annualized (multiplied by four). The
    Corporation's goal is to maintain a net debt to annualized funds flow
    from operations ratio of less than 1.5 : 1. At June 30, 2008, Wrangler
    West's ratio of net debt to annualized funds flow from operations was
    0.85 : 1.

    Wrangler West's share capital is not subject to external restrictions.
    However the credit facility available is based on the lender's annual
    review of the Corporation's petroleum and natural gas reserves.

    There were no changes to the Corporation's approach to capital management
    during the three and six months ended June 30, 2008.
    

    Reader Advisory

    Certain statements in this news release and interim report to
shareholders constitute forward-looking statements. Terms such as "may",
"will", "should", "expect", "plan", "anticipate", "believe", "intend",
"estimate", "predict", "potential", "continue" or other similar expressions
are intended to identify forward-looking statements. Forward-looking
statements would include statements as to Wrangler West's future outlook and
anticipated events or results, including in particular statements regarding
Wrangler West's future financial position, business strategy, projected
expenses, capital expenditures, financial results, taxes, plans and objectives
involving financing; commodity prices; number, type, timing and tie-in of
wells drilled; commencement and volume and cost of production. Statements
relating to reserves, including as to their magnitude, anticipated rate of
recovery and the present value of their future production, are forward-looking
statements, as they involve the assessment, based on certain estimates and
assumptions, that the reserves described can be profitably produced in the
future. Specifically, forward-looking statements are made or relied upon under
the headings "Depletion, Depreciation and Accretion" and "Outlook" below.
    By their nature, forward-looking statements are subject to numerous known
and unknown risks, uncertainties and other factors, as a result of which
actual results or events may differ materially from those anticipated in the
forward-looking statements. Such statements reflect the Company's current
views, based upon assumptions considered to be reasonable based on current
information, that are subject to risks, uncertainties and other factors
including, without limitation: results of operations, commodity prices,
royalty rates, performance and business prospects or opportunities, its
ability to discover and develop economic crude oil and natural gas reserves,
production of discovered reserves, costs of material and services, access to
production facilities and transportation, access to qualified and experienced
staff, contracts and markets, interest and currency exchange rates,
environmental and safety issues, surface access, and financial and liquidity
considerations, changes in regulatory standards, changes in applicable tax
laws and other factors set out in the Company's public disclosure documents.
    Many factors could cause the Company's actual results, performance or
achievements to vary from those described in this news release and interim
report to shareholders, including without limitation those listed above, and
the assumptions they are based upon proving incorrect. These factors should
not be considered exhaustive. Should one or more of these risks or
uncertainties materialize, or should one or more of the assumptions underlying
forward-looking statements prove incorrect, actual results may vary materially
from those described in this news release and interim report to shareholders
as intended, planned, anticipated, believed, sought, proposed, estimated or
expected. Management cautions readers not to unduly rely upon the forward-
looking statements nor use the forward-looking statements contained in this
news release and interim report to shareholders for purposes other than for
which it is disclosed here. Wrangler West provides this news release and
interim report to shareholders as of August 20, 2008 for the purpose of
reporting financial and operational results for the three and six months ended
June 30, 2008. Wrangler West disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required under securities
laws.

    Corporate Profile

    Wrangler West is a Canadian junior oil and natural gas producer building
production and assets through exploration in Alberta. Since inception, our
mandate has been to use the drill bit to add value for our shareholders and to
maximize return on invested capital. Disciplined management of our operations
and production portfolio creates sufficient funds flow from operations to
support growth internally. Wrangler West will continue to reinvest funds flow
from operations and to protect shareholder equity by adhering to our mandate.
Wrangler West trades on the TSX Venture Exchange under the symbol "WX".

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





For further information:

For further information: Wrangler West Energy Corp.: Steven F. Johnson,
President and Chief Executive Officer, Steve@wranglerwest.ca, telephone: (403)
290-6805; JoAnne M. Dorval-Dronyk, Chief Financial Officer,
JoAnne@wranglerwest.ca, telephone: (403) 290-6807

Organization Profile

Wrangler West Energy Corp.

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