Wrangler West Reports 2010 Operating and Financial Results

CALGARY, April 15 /CNW/ - Wrangler West Energy Corp. ("Wrangler West" or the "Company") (TSX-V "WX") announces today's filing on SEDAR (www.sedar.com) of the Company's audited Financial Statements and related Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2010 with comparative data for the year ended December 31, 2009.

Year ended December 31             2010            2009     % Change
Crude oil and NGL (bbls/d)               282               293                 (4)
Natural gas (mcf/d)            3,935            4,972               (21)
Total (boe/d)               938            1,122               (16)
Crude oil and NGL ($/bbl)            70.82            58.61                21
Natural gas ($/mcf)              4.36              4.47                 (2)
Per boe ($)                  
Petroleum and natural gas revenue            39.56            35.14                13
Royalties              (6.28)             (5.20)                21
Operating expenses           (13.42)           (13.71)                 (2)
Field netbacks            19.86            16.23                22
General and administrative             (3.25)             (3.09)                  5
Interest             (0.81)             (1.29)               (37)
Current income tax recovery              0.04              2.02               (98)
Funds flow from operations            15.84            13.87                14
Depletion, depreciation and accretion           (23.65)           (23.50)                  1
Stock-based compensation             (0.61)             (1.32)               (54)
Future income tax reduction              2.25              2.31                 (3)
Net loss             (6.17)             (8.64)               (29)
FINANCIAL HIGHLIGHTS ($ thousand)                  
Petroleum and natural gas revenue          13,541          14,382                 (6)
Royalties           (2,150)           (2,128)                  1
Operating expenses           (4,592)           (5,613)               (18)
General and administrative           (1,113)           (1,263)               (12)
Interest              (276)              (528)               (48)
Current income tax recovery                 15               827               (98)
Funds flow from operations            5,426            5,678                 (4)
Depletion, depreciation and accretion           (8,093)           (9,619)               (16)
Stock-based compensation              (209)              (540)               (61)
Future income tax reduction               771               944               (18)
Net loss           (2,105)           (3,538)               (40)
Outstanding shares (thousand)                  
Weighted average - basic            6,446            6,397     1
Weighted average - diluted            6,983            6,653                  5
Funds flow from operations - basic ($/share)              0.84              0.89                 (6)
Funds flow from operations - diluted ($/share)              0.78              0.85                 (8)
Net loss - basic and diluted ($/share)             (0.33)             (0.55)               (40)
Total assets ($ thousand)          34,896          40,239               (13)

Wrangler West converts petroleum and natural gas reserves and volumes to a common unit of measure on a basis of six thousand cubic feet ("mcf") of natural gas equals one barrel ("bbl") of oil. Disclosure using barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. The basis for the boe conversion ratio of 6 mcf equals one bbl is an energy equivalency conversion method, primarily applicable at the burner tip. This conversion rate does not represent a value equivalency at the wellhead. The Company calculates boe per day based on total production for the period divided by the number of days during the period.

Wrangler West Energy Corp. presents operating and financial results for 2010.  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 Reserves

As a natural gas and conventional oil producer with a natural gas focus, Wrangler West achieved solid reserves growth during 2010, a year of continuing weak natural gas markets throughout North America.  Our corporate reserves were evaluated by Sproule Associates Limited ("Sproule") with an effective date of December 31, 2010.

Reserves totalled 1.6 Mmboe in the proved category and totalled 2.2 Mmboe in the proved plus probable category which resulted in a net present value of $34.0 million, discounted at 10 percent and based on Sproule's December 31, 2010 price forecast.

      Remaining Reserves     Net Present Value
      Company (Mboe)     Before Income Tax ($ thousand)
      Gross1     Gross2     Net3     at 0%     at 5%     at 10%     at 15%
Proved developed producing     1,140.6     1,136.9     944.1     19,489     16,818     14,954     13,572
Proved developed non-producing     251.7     248.6     211.6     7,872     6,871     6,083     5,452
Proved undeveloped     169.6     169.6     144.1     4,679     4,038     3,519     3,094
  Total proved     1,561.9     1,555.1     1,299.8     32,040     27,727     24,557     22,118
  Total probable     632.9     630.7     517.7     16,810     12,200     9,410     7,542
Total proved plus probable     2,194.8     2,185.8     1,817.4     48,850     39,927     33,966     29,659
1   Gross Reserves: the remaining reserves attributable to the property.
2   Company Gross Reserves: the Company's working interest share of the remaining reserves attributable to the property before deduction of any royalties.
3   Company Net Reserves: gross remaining reserves of properties in which the Company has an interest, less all crown, freehold, and overriding royalties and interests owned by others.

2010 Operations and Financial Results

In 2010, Wrangler West conducted an active exploration program while focusing on maintaining the strength of our balance sheet. Managing our cash flow, operating costs and controlling our capital expenditures were high priorities in 2010.  During the year, Wrangler West developed new prospects that benefited from both drilling incentives and lower royalties initiated by the Province of Alberta.

We drilled nine wells (five natural gas; three crude oil; one dry and abandoned).  Two of the successful oil wells commenced production in the Grand Forks area during 2010 first quarter.  A third oil well in the Riviere area began producing during 2011 first quarter.  Two natural gas wells commenced production the Stanmore/Trochu area during 2010. In 2011 first quarter, a further two natural gas wells commenced production in the Trochu area.  One natural gas well drilled in 2010 is cased and standing. In Grand Forks, we completed a small oil acquisition, built a pipeline and converted a well to water injection to optimize production from the oil pool.

Wrangler West's exploration results created an increase of 372 Mboe of proved plus probable reserves in addition to 248 Mboe of net revisions.  Wrangler West's 2010 finding and development costs on a total proved reserves basis were less than $12.00 per boe based on our capital program of $7.4 million.

Wrangler West's production in 2010 was 70 percent weighted to natural gas.  The average price for this commodity has hovered near $4.00 per mcf for the past 24 months.  Even with new production additions throughout 2010, funds flow from operating activities were slightly lower in 2010 at $5.4 million, compared to $5.7 million in 2009.

For 2010, Wrangler West produced an average of 938 boe per day which was approximately 16 percent lower than 2009 average production of 1,122 boe per day. In 2010 first quarter, Wrangler West completed the disposition of non-operated natural gas assets in the Craigmyle area.  The disposition removed 150 boe per day from our production base and 338.5 Mboe from our proved reserves.  Total proceeds of $3.5 million from the asset sale were applied to bank indebtedness.  In the 2010 second quarter, Wrangler West secured a new $12 million credit facility.  At year-end, the Company had drawn $6.4 million on the new facility.

Industry Conditions

The natural gas market in North America entered the winter heating season with high storage levels.  After a colder-than-normal winter, during which withdrawals were higher than the five-year average, the market continues to have an oversupply of natural gas.  Demand across the continent has not recovered sufficiently to balance supply and demand as consumers struggle with the effects of a still-weakened economy.  Natural gas drilling activity in the United States continued for most of 2010 and only began to slow late in the year as the economics of $4.00 per mcf natural gas impacted exploration and production ("E&P") corporate earnings and balance sheets. Historical hedging and derivative opportunities to capitalize on natural gas price volatility have vanished.  As mature natural gas production declines, we will better understand the future opportunities for natural gas producers in North America.

As the year ended, it was apparent much of the E&P industry in North America had shifted focus to liquids-rich natural gas shale plays or reallocated capital to crude oil projects where higher returns were possible.  Oil prices are strong as the world responds to political upheaval and supply uncertainty from international producing regions.  We anticipate merger and acquisition activity will increase throughout 2011 in light of the current robust capital markets for commodities-based assets.

2011 Outlook

These are challenging times for junior producers and competition remains fierce.  Wrangler West continues to deploy our in-house expertise to manage the Company's assets in a complex business environment.  For junior producers, the exploration cycle is taking longer with significantly more time required to assemble land and data, to maximize the full potential of prospects and to arrive at the drill-ready decision.

We are engaged in an active geophysical program and have compiled an inventory of drilling opportunities for 2011.  Most of the new inventory developed by our technical team will be oil-prone targets, the focus of Wrangler West's 2011 capital program approved by the board of directors at $8.0 million.

Our objective for 2011 is to increase Wrangler West's exposure to oil, add reserves and increase daily production.  We intend to be active with the drill bit and to pursue all opportunities that fit within our corporate risk profile.  In the year ahead, Wrangler West will pursue merger, acquisition and disposition strategies with the potential to achieve our objectives for growth and to increase shareholder value.

Wrangler West Energy Corp.
Balance Sheets
December 31, 2010 and 2009

                                                     2010                                            2009
Current assets                
   Accounts receivable (note 8 (a))       $                            1,406,117       $                           1,409,114
   Income tax receivable                                          73,546                                       531,320
   Prepaid expenses                                        144,475                                       370,617
                                      1,624,138                                    2,311,051
Property and equipment (note 3)                                   33,271,587                                  37,927,574
        $                          34,895,725       $                         40,238,625
Liabilities and shareholders' equity                
Current liabilities                
   Bank indebtedness (note 4)       $                           6,354,223       $                           8,730,519
   Accounts payable
      and accrued liabilities
                                   3,259,522                                    3,358,013
                                     9,613,745                                  12,088,532
Asset retirement obligation (note 5)                                    1,872,755                                    2,333,765
Future income tax (note 6)                                    3,608,345                                    4,340,557
                                  15,094,845                                  18,762,854
Shareholders' equity                
   Share capital (note 7)                                  11,598,557                                  11,390,557
   Contributed surplus (note 7(e))                                    4,523,342                                    4,300,823
   Retained earnings                                    3,678,981                                    5,784,391
                                   19,800,880                                  21,475,771
        $                         34,895,725       $                         40,238,625

Wrangler West Energy Corp.
Statements of Operations, Comprehensive Loss
and Retained Earnings
Years ended December 31, 2010 and 2009

                                            2010                                           2009
  Petroleum and natural gas                                 13,541,032       $                                 14,382,179
  Royalties                                  (2,149,685)                                           (2,127,718)
                                  11,391,347                                          12,254,461
  Operating                                   4,591,862                                            5,613,405
  General and administrative (note 3)                                   1,112,656                                           1,262,770
  Interest                                     276,164                                               528,049
  Stock-based compensation (notes 3 and 7)                                     208,740                                               540,072
  Depletion, depreciation and accretion                                   8,093,469                                            9,618,996
                                  14,282,891                                          17,563,292
Loss before income tax                               (2,891,544)                                           (5,308,831)
Current income tax recovery (note 6)       (15,126)       (827,370)
Future income tax reduction (note 6)       (771,008)       (943,727)
                                    (786,134)                                           (1,771,097)
Net loss and
   other comprehensive loss
                                 (2,105,410)                                           (3,537,734)
Retained earnings, beginning of year                                   5,784,391                                            9,322,125
Retained earnings, end of year       $                           3,678,981       $                                   5,784,391
Loss per share - basic and diluted (note 7 (f))       $                                 (0.33)       $                                          (0.55)
Weighted average common shares outstanding -
    basic and diluted
                                  6,445,759       $                                   6,397,265

Wrangler West Energy Corp.
Statements of Cash Flows
Years ended December 31, 2010 and 2009

                                         2010                                          2009
Cash provided by (used in):              
  Net loss     $                         (2,105,410)       $                         (3,537,734)
  Items not involving cash              
        Depletion, depreciation and accretion                                 8,093,469                                   9,618,996
        Stock-based compensation                                    208,740                                      540,072
        Future income tax reduction                                   (771,008)                                    (943,727)
        5,425,791                                   5,677,607
   Change in non-cash operating
      working capital
                                   437,490                                  (1,884,451)
                                  5,863,281                                   3,793,156
  Decrease in bank indebtedness,
     original credit facility
                               (8,730,819)                                   (1,542,434)
  Increase in bank indebtedness, new credit
                               6,354,523                                                -
  Issuance of common shares                                   112,500                                        56,250
                                 (2,263,796)                                  (1,486,184)
  Additions to petroleum and natural gas
                              (7,385,966)                                  (2,649,781)
  Dispositions of petroleum and natural gas
                                3,635,549                                                -
  Change in non-cash investing
      working capital
                                   150,932                                      342,809
                                 (3,599,485)                                  (2,306,972)
  Cash and cash equivalents,
    beginning and end of year
                                             -                                                 -
  Supplementary cash flow information              
    Interest paid     $                              303,113       $                             520,306
    Income tax paid (received)     $                            (472,305)       $                             720,031

Reader Advisory

This news release contains forward-looking statements about potential new crude oil and natural gas drilling, production operations, changes in reserves, sources and use of capital and expected future operations. Although Wrangler West believes the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because the Company can give no assurance they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. A more detailed discussion of forward-looking statements is provided in Wrangler West's Management's Discussion and Analysis for the year ended December 31, 2010 which is filed on SEDAR (www.sedar.com).  The forward-looking statements contained in this news release are made as of the date hereof and Wrangler West undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Corporate Profile

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

Additional Information

Wrangler West files additional shareholder and public information on SEDAR accessible at www.sedar.com. This includes the Statement of Reserves Data and Other Oil and Gas Information Form NI 51-101 F1, F2 and F3 effective December 31, 2010 as well as the Notice of Annual Meeting of Shareholders, the 2011 Management Information Circular and the Form of Proxy in preparation for Wrangler West's Annual Meeting scheduled for May 19, 2011 in Calgary.

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




SOURCE Wrangler West Energy Corp.

For further information:

Wrangler West Energy Corp.
Steven F. Johnson
President and Chief Executive Officer

telephone:  (403) 290-6800

Profil de l'entreprise

Wrangler West Energy Corp.

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