Wrangler West Reports 2010 Nine Months Results

CALGARY, Nov. 18 /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 unaudited Financial Statements and related Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2010 with comparative data for the three and nine months ended September 30, 2009 and the year ended December 31, 2009.

			Highlights
		Three months ended Sep 30						Nine months ended Sep 30
		2010		2009		% Change		2010		2009		% Change
OPERATIONAL HIGHLIGHTS
Production
Crude oil and NGL (bbls/d)		254		288		(12)		284		292		(3)
Natural gas (mcf/d)		4,120		4,888		(16)		3,813		5,184		(26)
Total (boe/d)		941		1,103		(15)		920		1,156		(20)
Prices
Crude oil and NGL ($/bbl)		67.29		65.06		3		70.29		54.74		28
Natural gas ($/mcf)		3.85		3.29		17		4.59		4.43		4
Per boe ($)
Petroleum and natural gas revenue		35.01		31.55		11		40.74		33.67		21
Royalties		(5.17)		(5.27)		(2)		(7.05)		(4.59)		53
Operating expenses		(12.31)		(12.36)		―		(13.78)		(14.15)		(3)
Field netback		17.53		13.91		26		19.92		14.93		33
General and administrative		(2.83)		(2.86)		(1)		(3.15)		(2.82)		12
Interest		(0.69)		(1.45)		(52)		(0.87)		(1.21)		(28)
Current income tax recovery		0.17		6.57		(97)		0.06		2.11		(97)
Funds flow from operations		14.19		16.17		(12)		15.96		13.02		23
Depletion, depreciation, and accretion		(25.44)		(22.44)		13		(24.61)		(23.72)		4
Stock-based compensation		(0.73)		(2.15)		(66)		(0.83)		(1.06)		(22)
Future income tax reduction		2.83		―		―		1.91		2.10		(9)
Net loss		(9.16)		(8.42)		9		(7.57)		(9.66)		(22)
FINANCIAL HIGHLIGHTS ($ thousand)
Petroleum and natural gas revenue		3,029		3,200		(5)		10,228		10,624		(4)
Royalties		(447)		(535)		(16)		(1,768)		(1,447)		22
Operating expenses		(1,065)		(1,254)		(15)		(3,460)		(4,466)		(23)
General and administrative		(245)		(290)		(16)		(790)		(890)		(11)
Interest		(60)		(147)		(59)		(218)		(381)		(43)
Current income tax recovery		15		667		(98)		15		667		(98)
Funds flow from operations		1,228		1,640		(25)		4,008		4,108		(2)
Depletion, depreciation, and accretion		(2,201)		(2,276)		(3)		(6,178)		(7,484)		(17)
Stock-based compensation		(64)		(218)		(71)		(209)		(336)		(38)
Future income tax reduction		245		―		―		479		664		(28)
Net loss		(792)		(854)		(7)		(1,901)		(3,049)		(38)
Outstanding shares (thousand, except where indicated)
Weighted average ― basic		6,441		6,391		1		6,439		6,391		1
Weighted average ― diluted		7,190		6,631		8		7,189		6,569		9
Funds flow from operations ― basic ($/share)		0.19		0.26		(27)		0.62		0.64		(3)
Funds flow from operations ― diluted ($/share)		0.17		0.25		(32)		0.56		0.63		(11)
Net loss ― basic and diluted ($/share)		(0.12)		(0.13)		(8)		(0.30)		(0.48)		(38)
Total assets ($ thousand)								33,974		40,447		(16)

Note: 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 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 Nine Month Highlights

• $10.2 million in revenue
• $4.0 million in funds flow from operations
• $4.6 million in capital expenditures
• six wells drilled; five cased and completed; four tied-in; one D&A

Production Update

For the nine months ended September 30, 2010, Wrangler West produced 920 barrels of oil equivalent ("boe") per day, lower by 20 percent than the same period in 2009.  Production volumes were lower immediately following the disposition of our Craigmyle non-operated natural gas properties which were producing 153 boe per day. Since the sale, we have steadily increased production. 

September's production rate was affected by ten days of downtime. The Riviere gas purchaser initiated and completed a compressor turnaround. While that work was in progress, we simultaneously completed a turnaround for repairs and maintenance on Wrangler West's wholly-owned battery and compressors. These turnarounds required Wrangler West to shut-in approximately 100 boe per day of production which reduced September production volumes to 915 boe per day. Thus, we realized an improvement of 62 boe per day compared to the 2010 second quarter production rate of 853 boe per day.  

Capital Expenditures

Wrangler West's 2010 capital expenditures program remains at $6.0 million.  During the first nine months of 2010, we have invested $4.6 million in exploration activities, resulting in the drilling of six wells, of which three are natural gas, two are oil and one was dry and abandoned.  Four of the successful wells were placed on production and, currently, we have one more economic natural gas well cased, completed and awaiting tie-in late in the 2010 fourth quarter.  Following the end of 2010 third quarter, we drilled and completed one further natural gas well.

At our Grand Forks oil property, we have increased water injection capability and improved our pipeline constraints to optimize our water injection project.  The facility improvements increase the amount of fluid handled at reduced pressures.  During November 2010, the Grand Forks oil pool is producing approximately 115 boe per day.

Outlook

Crude oil prices have demonstrated continued strength and stability during 2010.  As a result, oil exploration in the Western Canada Sedimentary Basin remains competitive and costly.  Wrangler West is preparing to commence drilling a side-track horizontal oil well at Riviere and we expect to analyse results of this project late in the 2010 fourth quarter.  We are active at crown land sales with the objective of increasing our inventory of oil opportunities.

Wrangler West is a natural gas-weighted producer with natural gas representing 70 percent of our production.  Natural gas prices during the summer of 2010 were disappointing and the trend of soft natural gas prices appears likely to continue.  As we move toward the winter 2010 - 2011 heating season, natural gas storage remains at an all-time historical high. Many exploration and production companies have reduced their natural gas exploration activities during this period of unfavourable economics.  Until production decline trends for natural gas being produced from shale projects becomes both evident and understood in the North American market, the ultimate long-term impact of this new natural gas production on total supply remains unclear.

During 2010, weak natural gas prices reduced Wrangler West's cash flow and we have managed capital expenditures accordingly.  We have scaled back natural gas drilling until we have a clearer understanding of the future.  The board of directors has approved the 2011 preliminary capital expenditures forecast of $8.0 million. Wrangler West continues to purchase land, to conduct seismic programs to collect and analyse data and to build an inventory of drilling prospects.  Our focus is to position Wrangler West to grow when natural gas prices strengthen and stabilise to justify the capital investment.

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, among other documents, annual and interim reports to shareholders and the Statement of Reserves Data and Other Oil and Gas Information Form NI 51-101 F1, F2 and F3 effective December 31, 2009. 

Alternatively, to obtain copies of published corporate information, contact Crista L. Ferguson, Controller, at Wrangler West Energy Corp. 1950, 444 Fifth Avenue SW, Calgary, Alberta, Canada  T2P 2T8 (telephone [phone]) or (e-mail [email protected]).

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".

Reader Advisory

Financial outlook information contained in this news release about prospective results of operations, or financial position is based on assumptions about future events, including economic conditions and proposed courses of action, from management's assessment of relevant information currently available. Readers are cautioned that: a) such financial outlook information should not be used for purposes other than for which it is disclosed herein; and b) the list of risk factors cited in the forward-looking statements disclosure in the MD&A for the three and nine months ended September 30, 2010 is not exhaustive.

Wrangler West provides this information as of November 17, 2010 for the purpose of reporting financial and operational results for the three and nine months ended September 30, 2010. Other than as required under securities laws, 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.

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

For further information:

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