Wrangler West Reports 2011 Operating and Financial Results

CALGARY, April 18, 2012 /CNW/ - Wrangler West Energy Corp. ("Wrangler West" or the "Company") (TSX-V "WX") announces today's filing on SEDAR of the Company's audited Financial Statements and related Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2011 with comparative data for the year ended December 31, 2010. Effective January 1, 2011, Wrangler West began preparing financial statements and comparative information according to International Financial Reporting Standards. Previously, the Company prepared financial statements according to Canadian generally accepted accounting principles. All documents may be viewed at www.sedar.com.

									Year ended Dec 31
									2011	2010	% Change
OPERATIONAL HIGHLIGHTS
Production
Crude oil and NGL (bbls/d)									189	282	(33)
Natural gas (mcf/d)									4,263	3,935	8
Total production (boe/d)									899	938	(4)
Prices
Crude oil and NGL ($/bbl)									86.46	70.82	22
Natural gas ($/mcf)									3.78	4.36	(13)
Per boe ($)
Petroleum and natural gas revenue									36.09	39.55	(9)
Royalties									(6.40)	(6.28)	2
Operating expenses									(14.17)	(13.41)	6
Netback									15.52	19.86	(22)
General and administrative									(3.82)	(3.33)	15
Interest									(0.49)	(0.81)	(40)
Current income tax benefit									-	0.04	(100)
Funds flow from operations									11.21	15.76	(29)
Share-based payments									(0.33)	(0.65)	(49)
Depletion and depreciation									(15.16)	(16.39)	(8)
Impairment of property, plant and equipment									-	(3.73)	(100)
Gain (loss) on sale of assets									(2.84)	0.37	(868)
Accretion									(0.20)	(0.22)	(9)
Deferred income tax benefit									1.83	1.26	45
Net loss									(5.49)	(3.60)	53
FINANCIAL HIGHLIGHTS ($ thousand)
Petroleum and natural gas revenue									11,842	13,541	(13)
Royalties									(2,099)	(2,150)	(2)
Operating expenses									(4,651)	(4,592)	1
General and administrative									(1,252)	(1,141)	10
Interest									(162)	(276)	(41)
Current income tax benefit									-	15	(100)
Funds flow from operations									3,678	5,397	(32)
Share-based payments									(108)	(222)	(51)
Depletion and depreciation									(4,975)	(5,613)	(11)
Impairment of property, plant and equipment									-	(1,276)	(100)
Gain (loss) on sale of assets									(933)	126	(840)
Accretion									(64)	(74)	(14)
Deferred income tax benefit									599	431	39
Net loss									(1,803)	(1,231)	46
Funds flow from operations - basic ($/share)									0.57	0.84	(32)
Funds flow from operations - diluted ($/share)									0.56	0.82	(32)
Net loss - basic and diluted ($/share)									(0.28)	(0.19)	47
Total assets ($ thousand)									27,964	34,959	(20)

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") presents operating and financial results for the year ended December 31, 2011.  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.

2011 Highlights

• $11.8 million of revenue
• $3.7 million of funds flow from operations
• $4.9 million in capital expenditures
• renewed credit facility

Review of 2011

For the year ended December 31, 2011, Wrangler West produced 899 barrels of oil equivalent ("boe") per day, a decrease of four percent compared to the same period one year ago. Wrangler West's production base is approximately 80 percent natural gas.  During a period of strong oil prices in 2011, Wrangler West maximized the value of Grand Forks crude oil properties through the sale of this asset for $4.9 million.

In 2011, the Company's netback was lower by 22 percent as the price Wrangler West received for natural gas declined 13 percent from the same period in 2010.  For the year ended December 31, 2011, crude oil prices were 22 percent higher, compared to the same period one year ago.  Total operating expenses for 2011 increased a modest one percent compared to the same period in 2010.

In 2011, Wrangler West conducted exploration activities using available cash flow and the credit facility.  The Company drilled and cased two natural gas wells and one oil well during 2011. At year-end, two wells were on production and one well was deemed not economic to tie-in at prevailing natural gas prices.  During 2011 fourth quarter, Wrangler West renewed its credit facility and has in place a credit agreement totaling $13.4 million, of which $8.4 million is a revolving operating demand loan and $5.0 million is a non-revolving demand loan dedicated to acquisitions and development.

Throughout 2011, the Company undertook seismic programs that provided geophysical data to increase our land position for oil prospects.  Wrangler West pursued a defensive strategy focused on conventional oil exploration, rather than horizontal resource exploration which features high costs and well-funded, aggressive competition for resource play assets.  Conventional oil drilling is compatible with Wrangler West's capital and financial structure.

					Remaining Reserves								Net Present Value
								Company (Mboe)					Before Income Tax ($ thousand)
					Gross ^1			Gross ^2			Net ^3		at 0%			at 5%			at 10%			at 15%
Proved developed producing					942.1			942.1			775.5		18,208			15,407			13,443			11,988
Proved developed non-producing					192.8			192.8			162.7		5,469			4,571			3,881			3,339
Proved undeveloped					132.7			132.7			113.3		3,684			2,997			2,455			2,025
	Total proved				1,267.6			1,267.6			1,051.5		27,362			22,976			19,779			17,353
	Total probable				730.0			730.0			593.9		22,391			16,129			12,228			9,323
Total proved plus probable					1,997.7			1,997.7			1,645.4		49,753			39,105			32,007			26,676

^1Gross Reserves				remaining reserves attributable to the property.
^2 Company Gross Reserves				Company's working interest share of the remaining reserves attributable to the property, before deduction of any royalties.
^3Company Net Reserves				gross remaining reserves of properties in which the Company has an interest, less  all crown, freehold, and overriding royalties and interest owned by others.

Wrangler West's corporate crude oil and natural gas reserves were evaluated by Sproule Associates Limited ("Sproule") with an effective date of December 31, 2011.  Reserves totaled 1.3 MMboe in the proved category and 2.0 MMboe in the proved plus probable category resulting in a net present value of $32 million discounted at ten percent and based on Sproule's December 31, 2011 commodity price forecast.

Business Environment

Natural gas exploration, especially "dry" gas, remains economically challenging due to the oversupply condition the industry continues to face.  Elevated drilling activity for liquids-rich natural gas also produces associated natural gas which is then added to already high storage volumes.  The unseasonably warm North American winter resulted in lower-than-historical rates of drawdown from natural gas storage.  The slow economic recovery also contributed to natural gas prices tumbling to their lowest value in the past ten years.

It has been said, "When those who know it best like it the least, a great opportunity is created for the contrarian". The natural gas industry will undergo another challenging year throughout 2012 as the bottom of the price cycle continues to be redefined.  A natural gas price of $1.75 per mcf barely covers operating expenses, royalties and overhead, let alone provides any return on invested capital.  Shut-in natural gas will be a prominent feature of any recovery scenario.

Drilling activity for oil and liquids-rich natural gas remains robust.  Consumers appear to have adapted to a higher oil price, in the range of $100 per barrel, as the North American economy slowly improves.  However, the supply/demand imbalance for oil and natural gas in the global economy represents a significant arbitrage opportunity for export of these commodities currently trapped in North America.  The foregone revenue stream will attract both government support and sophisticated capital.  Long-term energy policy entered political arenas on both sides of the Canadian border with the Keystone pipeline being interrupted by the United States' federal election and potential environmental issues requiring a managed solution.  With the lack of export opportunities, Northern Gateway appears to be the Canadian alternative of choice although the project is likely at least a half a decade away from providing a viable horizon to potential new markets.

Positioning Wrangler West

In the long-term, anticipated market structure changes will provide access to new and growing demand for oil and natural gas which will be positive for the industry.  However, in the near term, small conventional oil and natural gas producers will continue to struggle with the constraints of the current business environment.  Rewards will only be realized through successful exploration by companies that can survive by prudently managing through the current down cycle.

In 2011, Wrangler West replaced oil and natural gas reserves even as the backdraft from the "shale gale" continued to erode the value of natural gas assets.  To manage through this storm, Wrangler West disposed of crude oil assets which enhanced the balance sheet (under IFRS, the "Statement of Financial Position") and positioned the Company to capitalize on any upturn.

Throughout 2012, in anticipation of continued weakness in natural gas prices, Wrangler West expects to deploy available capital to conventional oil exploration prospects that meet our risk versus reward criteria.  At the same time, we will continually assess opportunities for mergers and acquisitions to determine their potential to provide shareholder value.

WRANGLER WEST ENERGY CORP.
STATEMENTS OF FINANCIAL POSITION
(Stated in thousands of dollars)
								December 31,				December 31,						January 1,
								2011				2010						2010
Assets
Current assets
	Accounts receivable						$	756			$	1,406			$			1,409
	Income tax receivable							-				74						531
	Prepaid expenses							212				144						371
	Assets held for sale							-				-						4,084
								968				1,624						6,395
Exploration and evaluation								-				-						44
Property, plant and equipment								26,995				33,334						32,114
							$	27,963			$	34,958			$			38,553
Liabilities and shareholders' equity
Current liabilities
	Bank indebtedness						$	3,156			$	6,354			$			8,731
	Accounts payable and accrued Liabilities							1,999				3,260						3,358
	Decommissioning obligations related to assets held for sale							-				-						573
								5,155				9,614						12,662
Decommissioning obligations								2,369				2,705						2,024
Deferred income tax								2,804				3,403						3,833
								10,328				15,722						18,519
Shareholders' equity
	Share capital							12,402				12,402						12,194
	Contributed surplus							4,740				4,538						4,313
	Retained earnings							493				2,296						3,527
								17,635				19,236						20,034
Commitments
							$	27,963			$	34,958			$			38,553

WRANGLER WEST ENERGY CORP.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in thousands of dollars, except per share amounts)
								Year ended				Year ended
								December 31, 2011				December 31, 2010
Revenue
	Petroleum and natural gas sales						$	11,842			$	13,541
	Royalties							(2,099)				(2,150)
								9,743				11,391
Expenses
	Operating							4,651				4,592
	General and administrative							1,252				1,141
	Share-based payments							108				222
	Depletion and depreciation							4,975				5,613
	Impairment of property, plant and equipment							-				1,276
	(Gain) loss on sale of assets							933				(126)
Results from operating activities								(2,176)				(1,327)
Finance
	Interest and accretion							226				350
Loss before income tax								(2,402)				(1,677)
Current income tax benefit								-				(15)
Deferred income tax benefit								(599)				(431)
Net loss and comprehensive loss							$	(1,803)			$	(1,231)
Net loss per share
	Basic and diluted						$	(0.28)			$	(0.19)

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Stated in thousands of dollars and shares)
						Number of															Total
						common				Share			Contributed					Retained			shareholders'
						shares				capital			surplus					earnings			equity
Balance at January 1, 2011						6,466			$	12,402			$	4,538			$	2,296			$	19,236
	Share-based payments					-				-				202				-				202
	Net loss					-				-				-				(1,803)				(1,803)
Balance at December 31, 2011						6,466			$	12,402			$	4,740			$	493			$	17,635
Balance at January 1, 2010						6,416			$	12,194			$	4,313			$	3,527			$	20,034
	Options exercised					50				208				(96)				-				112
	Share-based payments					-				-				321				-				321
	Net loss					-				-				-				(1,231)				(1,231)
Balance at December 31, 2010						6,466			$	12,402			$	4,538			$	2,296			$	19,236

WRANGLER WEST ENERGY CORP.
STATEMENTS OF CASH FLOWS
(Stated in thousands of dollars)
									Year ended				Year ended
									December 31, 2011				December 31, 2010
Cash provided by (used in):
Operating
	Net loss							$	(1,803)			$	(1,231)
	Items not involving cash:
		Depletion and depreciation							4,975				5,613
		Impairment of property, plant and equipment							-				1,276
		Accretion							64				74
		Share-based payments							108				222
		(Gain) loss on sale of assets							933				(126)
	Deferred income tax benefit								(599)				(431)
									3,678				5,397
	Change in non-cash operating working capital								205				437
									3,883				5,834
Financing
	Decrease in bank indebtedness, original credit facility								-				(8,731)
	Increase (decrease) in bank indebtedness, new credit facility								(3,198)				6,355
	Issuance of common shares								-				113
									(3,198)				(2,263)
Investing
	Property, plant and equipment expenditures								(4,941)				(7,357)
	Proceeds on sale of assets								5,066				3,635
	Change in non-cash investing working capital								(810)				151
									(685)				(3,571)
Cash and cash equivalents, beginning and end of year								$	-			$	-
Supplementary cash flow information
	Interest paid								(173)				(303)
	Income tax refund								74				472

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, F3 and F4 effective December 31, 2011.  Alternatively, to obtain copies of published corporate information, contact Crista L. Ferguson, Chief Financial Officer, Wrangler West Energy Corp., 1950, 444 Fifth Avenue SW, Calgary, Alberta, Canada  T2P 2T8 (telephone [phone] or e-mail [email protected]).

Reader Advisory

This news release may contain forward-looking statements ("FLS") about potential new crude oil and natural gas drilling, tie-ins, production operations, sources and use of capital, asset purchases or dispositions and expected future operations. Although Wrangler West believes the expectations reflected in these FLS are reasonable, undue reliance should not be placed on them because the Company can give no assurance the FLS will prove to be correct. Since FLS address future events and conditions, by their very nature they involve inherent risks and uncertainties. A more detailed discussion of FLS is provided in Wrangler West's Management's Discussion and Analysis for the three and twelve months ended December 31, 2011 which is filed on SEDAR (www.sedar.com).  The FLS contained in this news release are made as of the date hereof and Wrangler West undertakes no obligation to update publicly or revise any FLS 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 crude oil and natural gas producer which explores for and develops crude oil and natural gas production assets in the Province of Alberta. Since inception, the Company's mandate has been to use the drill bit to add shareholder value. Disciplined management of operations and the 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".

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

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