Wrangler West Reports 2010 First Quarter Results

CALGARY, May 19 /CNW/ - Wrangler West Energy Corp. ("Wrangler West" or the "Company") (TSX-V "WX") announces today's filing on www.sedar.com of the Company's unaudited Financial Statements and related Management's Discussion and Analysis("MD&A") for the three months ended March 31, 2010 with comparative data for the three months ended March 31, 2009 and the year ended December 31, 2009.

    

                                 HIGHLIGHTS
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    Three months ended March 31                   2010       2009   % Change
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    OPERATIONAL HIGHLIGHTS
    Production
    Crude oil and NGL (bbls/d)                     302        302          -
    Natural gas (mcf/d)                          3,980      5,682        (30)
    Total (boe/d)                                  965      1,249        (23)
    ---------------------------------------------------------------
    Prices
    Crude oil and NGL ($/bbl)                    74.21      40.49         83
    Natural gas ($/mcf)                           5.72       5.88         (3)
    ---------------------------------------------------------------
    Per boe ($)
    Petroleum and natural gas revenue            46.80      36.55         28
    Royalties                                    (7.28)     (5.57)        31
    Operating expenses                          (13.47)    (14.40)        (6)
    ---------------------------------------------------------------
    Field netbacks                               26.05      16.58         57
    General and administrative                   (3.14)     (2.87)         9
    Interest                                     (1.12)     (0.96)        17
    Current income tax                               -          -          -
    ---------------------------------------------------------------
    Funds flow from operations                   21.79       12.75        71
    Depletion, depreciation and accretion       (22.79)     (26.38)      (14)
    Stock-based compensation                     (0.78)      (0.68)       15
    Future income tax                            (0.08)       3.77      (102)
    ---------------------------------------------------------------
    Net loss                                     (1.86)     (10.54)      (82)
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    FINANCIAL HIGHLIGHTS ($ thousand)
    Petroleum and natural gas revenue            4,066       4,110        (1)
    Royalties                                     (633)       (627)        1
    Operating expenses                          (1,170)     (1,619)      (28)
    General and administrative                    (273)       (323)      (15)
    Interest                                       (98)       (108)      (10)
    Current income tax                               -           -         -
    ---------------------------------------------------------------
    Funds flow from operations                   1,893       1,433        32
    Depletion, depreciation and accretion       (1,980)     (2,967)      (33)
    Stock-based compensation                       (68)        (76)      (10)
    Future income tax                               (7)        424      (102)
    ---------------------------------------------------------------
    Net loss                                      (163)     (1,186)      (86)
    ---------------------------------------------------------------
    Outstanding shares (thousand)
    Weighted average - basic                     6,437       6,391         1
    Weighted average - diluted                   7,152       7,623        (6)
    ---------------------------------------------------------------
    Funds flow from operations - basic
     ($/share)                                    0.29        0.22        32
    Funds flow from operations - diluted
     ($/share)                                    0.26        0.19        37
    Earnings (loss) - basic ($/share)            (0.03)      (0.19)      (84)
    Earnings (loss) - diluted ($/share)          (0.03)      (0.19)      (84)
    ---------------------------------------------------------------
    Total assets ($ thousand)                   36,162      44,010       (18)
    -------------------------------------------------------------------------
    

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

Wrangler West Energy Corp. ("Wrangler West" or the "Company") 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. Wrangler West presents operating and financial results for 2010 first quarter.

2010 First Quarter Highlights

    
    -   $4.1 million in revenue

    -   $1.9 million in funds flow from operations

    -   $1.8 million in capital expenditures

    -   closed sale of Craigmyle non-operated natural gas assets
    

Review of First Quarter

For the three months ended March 31, 2010, Wrangler West produced 965 barrels of oil equivalent ("boe") per day, lower by 23 percent when compared to the same period one year ago. However, field netbacks improved significantly as we experienced higher crude oil prices during 2010 first quarter and lowered our operating costs. Funds flow from operations, at $1.9 million, improved year-over-year and compared to 2009 fourth quarter.

In 2010 first quarter, Wrangler West concluded the previously announced disposition of the Craigmyle non-operated natural gas assets for $3.6 million before closing adjustments. Proceeds from the disposition improved Wrangler West's net debt position.

Capital Expenditures

Wrangler West invested $1.8 million in capital expenditures during 2010 first quarter. We drilled three wells resulting in two oil wells now on production and one natural gas well awaiting tie-in. We continue to expand our inventory of drilling prospects by acquiring land, completing seismic programs and negotiating farm-ins with industry partners. Currently, we are awaiting surface access which is restricted during spring break-up. We expect to commence our summer drilling program shortly.

Commodity Prices

During 2010 first quarter, commodity prices demonstrated expected seasonal strength. Crude oil prices were strong for the past twelve months and that strength continues in early 2010. The near term outlook for natural gas prices looks weak as we face the uncertainty of high storage and lower-than-expected demand during the shoulder season when consumption is typically lower.

Shale gas exploration continues to influence perceptions of long-term supply and demand. Until actual size and quality of shale gas reserves are defined by production profiles, there is potential for over-reliance on this resource. At this early stage, according to some industry sources, shale gas supplies approximately 15 percent of the North American natural gas market. Generally, shale gas deliverability and reserves are assumed to be robust. That assumption and current storage levels are contributing to uncertainty for conventional natural gas producers.

The number of drilling rigs dedicated to natural gas exploration has fallen off dramatically. Historical production declines for conventional natural gas reserves are well understood and predictable. Natural gas production declines for shale gas will, ultimately, be more predictable. Natural gas exploration has been curtailed for almost two years. Improvements in the North American economy that increase consumption will have a positive effect on natural gas prices.

Outlook for 2010

In today's market, Wrangler West is focused on finding economic crude oil and natural gas reserves within the context of the commodity prices we receive. In April, our board of directors approved approximately $6.0 million for Wrangler West's 2010 capital expenditures program. For the remainder of the year, we intend to pursue a range of exploration activities that may be slightly more weighted to natural gas.

Additional Information

Additional shareholder and public information relating to Wrangler West Energy Corp. is filed on SEDAR and accessible at www.sedar.com. This includes the Notice of Annual and Special Meeting of Shareholders, the 2010 Management Information Circular and the Form of Proxy mailed in preparation for Wrangler West's shareholder meeting on May 26, 2010 in Calgary, Alberta.

Corporate Profile

Wrangler West is a Canadian junior oil and natural gas producer which explores for and develops crude oil and natural gas production assets in the Province of Alberta. Since inception, our mandate has been to use the drill bit to add shareholder value. Disciplined management of our operations and production portfolio creates sufficient funds flow to support ongoing operations. Wrangler West will continue to reinvest funds flow from operations and other available capital to protect and add future value. Wrangler West trades on the TSX Venture Exchange under the symbol "WX".

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

For further information: Wrangler West Energy Corp.: Steven F. Johnson, President and Chief Executive Officer, [email protected], telephone: [phone]