Wrangler West Reports 2009 First Half Results



    CALGARY, Aug. 14 /CNW/ - Wrangler West Energy Corp. ("Wrangler West", the
"Company") (TSX-V "WX") announces operating and financial results for the
three and six months ended June 30, 2009, together with comparative data for
the same periods in 2008 and the year ended December 31, 2008.

    
    Six Month Highlights

    -   $7.4 million in revenue
    -   $2.5 million in funds flow from operations
    -   $1.0 million in capital expenditures
    -   added natural gas reserves
    

    2009 First Half Production

    For the six months ended June 30, 2009, Wrangler West produced 1,183
barrels of oil equivalent (boe) per day, lower by approximately 24 percent
compared to the same period one year ago. During the 2009 second quarter, we
shut in Ellerslie natural gas production to gather pressure data and to
further evaluate and define existing Ellerslie natural gas reserves. This
reservoir engineering project resulted in reserves additions of approximately
three billion cubic feet of proved plus probable natural gas reserves. We
engaged independent evaluation engineers to provide an interim reserves report
dated June 30, 2009, which included their review and adjustment to Wrangler
West's Ellerslie natural gas reserves, following an analysis of new reservoir
pressure data.

    Capital Expenditures Program

    Wrangler West's 2009 capital expenditures budget remains at $5.5 million.
In the first half of 2009, we limited capital expenditures to $1.0 million. We
will continue to focus on maximizing existing production, reducing debt and
improving Wrangler West's balance sheet while we are in this soft natural gas
price environment. We will work to identify additional opportunities within
our core areas and to build our inventory of prospects in preparation for any
upturn in the business cycle.

    Commodity Prices

    In the first half of 2009, volatility in commodity prices continued to
challenge our industry. Crude oil prices have maintained an acceptable floor
for producers but natural gas prices continue to test bottom during the dog
days of summer. Natural gas storage levels have increased as a result of much
lower natural gas consumption throughout the United States and eastern Canada.
North American industrial users have struggled under the weight of the
economic downturn and are not exhibiting historical natural gas consumption
patterns. It has been reported that up to 30 percent of the United States
industrial sector is standing idle. Weak residential consumption has further
eroded natural gas price as we experience one of the coolest summers in recent
history. Wrangler West has no commodity price contracts in place and is fully
exposed to the weak price of natural gas.

    Industry Conditions

    Drilling activity in the Western Canada Sedimentary Basin ("WCSB") is
dramatically lower year-over-year. Historically, new discoveries from active
exploration programs have offset the persistent and predictable rate of
decline associated with conventional production. Exploration for shale natural
gas trapped in tight reservoirs has potentially captured a new source of
supply for the North American market. However, most of these tight plays for
natural gas require significant capital and higher natural gas prices to
achieve full field development.
    Liquified natural gas ("LNG") continues to be an intermittent source of
supply as shippers attempt to capture an advantage by delivering supply to the
most lucrative market. This floating supply creates a perceived overhang which
adds to the volatility of natural gas prices throughout North America.
    A number of factors have contributed to the continued decline in natural
gas prices. The worldwide recession and credit crisis has 75 percent of global
the economy in retreat. Canada and the United States are wrestling with the
depth of the current downturn. Factories are idle, credit is tight,
unemployment is at record highs and businesses are being cautious. Recently,
politicians and respected business leaders in Canada and the United States
have declared the economic downturn is behind us and business is starting to
respond. We hope they are correct.

    Staying Focused in the Downturn

    Management's position is, every day that passes brings the winter heating
season closer, which may contribute to a brighter outlook for our industry,
especially natural gas-weighted producers like Wrangler West. We expect any
improvement in the economy that creates an upturn in business activity will
begin to restore historical consumption for natural gas. Once demand
increases, as a result of a sustained improvement in the economy, the
historical pricing relationship between crude oil and natural gas may be
restored to recognise the heating value of natural gas.
    We continue to source opportunities within the areas where we operate.
Wrangler West is working to reduce debt in this low commodity price
environment which may allow us to secure and act on future opportunities when
appropriate. The Wrangler West business plan is based on objectives intended
to strengthen shareholder value.

    
                Selected Operational and Financial Highlights

                                    Three months             Six months
                                    ended Jun 30            ended Jun 30
                                                 %                       %
                                2009    2008  Change    2009    2008  Change
    -------------------------------------------------------------------------
    OPERATIONAL HIGHLIGHTS
    Production
    Crude oil and NGL (bbls/d)   285     371     (23)    294     384     (23)
    Natural gas (mcf/d)        4,992   6,986     (29)  5,335   6,975     (24)
    Total (boe/d)              1,117   1,535     (27)  1,183   1,547     (24)
    -----------------------------------------        ----------------
    Prices
    Crude oil and NGL ($/bbl)  59.17  109.69     (46)  49.61   95.83     (48)
    Natural gas ($/mcf)         3.92   10.32     (62)   4.96    9.10     (45)
    -----------------------------------------        ----------------
    Per boe ($)
    Petroleum and natural
     gas revenues              32.61   73.45     (56)  34.68   64.86     (47)
    Royalties                  (2.81) (14.96)    (81)  (4.26) (12.89)    (67)
    Operating expenses        (15.67) (13.10)     20  (15.00) (13.22)     13
    -----------------------------------------        ----------------
    Field netback              14.13   45.39     (69)  15.41   38.74     (60)
    General and
     administrative            (2.72)  (2.46)     11   (2.80)  (2.10)     33
    Interest                   (1.23)  (1.15)      7   (1.09)  (1.16)     (6)
    Current income tax             -   (6.67)   (100)      -   (4.97)   (100)
    Realized loss on
     commodity contracts           -   (5.75)   (100)      -   (2.86)   (100)
    -----------------------------------------        ----------------
    Funds flow from
     operations                10.18   29.36     (65)  11.53   27.66     (58)
    Unrealized loss on
     commodity contracts           -  (11.59)   (100)      -   (9.13)   (100)
    Depletion, depreciation,
     and accretion            (22.05) (25.26)    (13) (24.32) (24.28)      -
    Stock-based compensation   (0.41)  (0.41)      -   (0.55)  (0.48)     15
    Future income tax           2.36    6.70     (65)   3.10    5.04     (38)
    -----------------------------------------        ----------------
    Net loss                   (9.93)  (1.19)         (10.25)  (1.19)
    -------------------------------------------------------------------------
    FINANCIAL HIGHLIGHTS
     ($ thousand)
    Petroleum and natural
     gas revenues              3,315  10,262     (68)  7,425  18,257     (59)
    Royalties                   (286) (2,090)    (86)   (912) (3,630)    (75)
    Operating expenses        (1,593) (1,830)    (13) (3,212) (3,722)    (14)
    General and
     administrative             (277)   (344)    (19)   (599)   (591)      1
    Interest                    (125)   (160)    (22)   (234)   (327)    (28)
    Current income tax             -    (932)   (100)      -  (1,399)   (100)
    Realized loss on
     commodity contracts           -    (804)   (100)      -    (804)   (100)
    -----------------------------------------        ----------------
    Funds flow from
     operations                1,034   4,102     (75)  2,468   7,785     (68)
    -----------------------------------------        ----------------
    Unrealized loss on
     commodity contracts           -  (1,619)   (100)      -  (2,569)   (100)
    Depletion, depreciation,
     and accretion            (2,241) (3,529)    (36) (5,208) (6,835)    (24)
    Stock-based compensation     (42)    (57)    (27)   (118)   (136)    (13)
    Future income tax            240     936     (74)    664   1,420     (53)
    -----------------------------------------        ----------------
    Net loss                  (1,009)   (167)         (2,195)   (334)
    -------------------------------------------------------------------------
    Outstanding shares
     (thousand, except
     where indicated)
    Weighted average
     - basic                   6,391   6,366       -   6,391   6,363       -
    Weighted average
     - diluted                 7,003   6,783       3   7,003   6,780       3
    -----------------------------------------        ----------------
    Funds flow from
     operations - basic
     ($/share)                  0.16    0.64     (75)   0.39    1.22     (68)
    Funds flow from
     operations - diluted
     ($/share)                  0.15    0.60     (75)   0.35    1.15     (70)
    Net loss - basic and
     diluted ($/share)         (0.16)  (0.03)          (0.34)  (0.05)
    -----------------------------------------        ----------------
    Total assets ($ thousand)                         41,870  48,641     (14)
    -------------------------------------------------------------------------
    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.
    

    Corporate Profile

    Wrangler West is a Canadian junior oil and natural gas producer which has
been building production and assets through exploration in Alberta. Since
inception, our mandate has been to use the drill bit to add shareholder value.
We expect disciplined management of our operations and production portfolio
will create 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, and does not accept
    responsibility for, the adequacy or accuracy of this press release.
    





For further information:

For further information: Wrangler West Energy Corp., telephone: (403)
290-6800; Steven F. Johnson, President and Chief Executive Officer,
Steve@wranglerwest.ca; JoAnne M. Dorval-Dronyk, Chief Financial Officer,
JoAnne@wranglerwest.ca

Organization Profile

Wrangler West Energy Corp.

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