Wrangler West Reports 2012 First Quarter Operating and Financial Results

CALGARY, May 23, 2012 /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 months ended March 31, 2012 with comparative data for the three months ended March 31, 2011 and the year ended December 31, 2011. All referenced documents may be viewed at www.sedar.com.

		Three months ended March 31
		2012	2011	% Change
OPERATIONAL HIGHLIGHTS
Production
Crude oil and NGL (bbls/d)		139	247	(44)
Natural gas (mcf/d)		4,077	4,704	(13)
Total production (boe/d)		818	1,031	(21)
Prices
Crude oil and NGL ($/bbl)		86.58	78.39	10
Natural gas ($/mcf)		2.26	3.92	(42)
Per boe ($)
Petroleum and natural gas revenue		25.95	36.66	(29)
Royalties		(4.11)	(5.39)	(24)
Operating expenses		(13.98)	(15.38)	(9)
Netback		7.86	15.89	(51)
General and administrative		(3.72)	(3.31)	12
Interest		(0.44)	(0.63)	(30)
Funds flow from operations		3.70	11.95	(69)
Share-based payments		(0.34)	-	-
Depletion and depreciation		(16.28)	(16.09)	1
Gain on sale of assets		-	0.02	(100)
Accretion		(0.20)	(0.20)	-
Deferred income tax benefit		3.16	1.08	193
Net loss		(9.96)	(3.24)	207
FINANCIAL HIGHLIGHTS ($ thousand)
Petroleum and natural gas revenue		1,932	3,401	(43)
Royalties		(306)	(500)	(39)
Operating expenses		(1,041)	(1,427)	(27)
General and administrative		(277)	(307)	(10)
Interest		(33)	(59)	(44)
Funds flow from operations		275	1,108	(75)
Share-based payments		(25)	-	-
Depletion and depreciation		(1,212)	(1,493)	(19)
Gain on sale of assets		-	2	(100)
Accretion		(15)	(18)	(17)
Deferred income tax benefit		235	101	133
Net loss		(742)	(300)	147
Funds flow from operations -
	basic and diluted ($/share)	0.04	0.17	(76)
Net loss - basic and diluted ($/share)		(0.11)	(0.05)	120
Total assets ($ thousand)		26,942	34,172	(21)

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 three months ended March 31, 2012.  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.

2012 First Quarter Highlights

• $1.9 million of revenue
  
  
• $0.3 million of funds flow from operations
  
  
• $0.5 million in capital expenditures
  
  

2012 First Quarter Review

For the 2012 first quarter, Wrangler West produced 818 barrels of oil equivalent ("boe") per day, a 21 percent decrease compared to the same period one year ago.  The lower production reflects the Company's previously announced asset disposition and natural production declines from the corporate reserves base.  Wrangler West's production profile remains 80 percent natural gas.

In the 2012 first quarter, Wrangler West experienced a ten-year low in the AECO spot price for natural gas.  Continued deterioration of natural gas prices forced the Company's decision to minimize capital expenditures and reduce expenses wherever possible.  Capital expenditures during 2012 first quarter were focused on 3D seismic and land acquisitions.  Wrangler West's focus is to remain cash flow positive and maintain a conservative approach to capital spending.  We expect this austerity program to remain entrenched as we develop our inventory of drillable oil prospects.

Early 2012 Industry Conditions

Subsequent to 2012 first quarter, natural gas prices have recovered modestly from their ten-year bottom in April 2012.  However, the current economics for natural gas exploration do not justify a drilling budget.  Some producers have shut in marginal production in response to shockingly low natural gas prices. Weather analysts have commented the 2012 summer could be hot and dry.  If they are correct, the upcoming summer cooling season could be a welcome draw on natural gas storage levels which are currently double their historical five-year average.

Early 2012 Outlook

Wrangler West recently received regulatory approval to expand the waterflood project at Riviere.  This initiative was accomplished after the Company acquired 100 percent working interest in the Wabamun A crude oil pool.  Our plan is to inject into an existing horizontal well and we expect to commence the required workover of the well after spring break-up. The project is designed to achieve pressure support through injection of produced water.  This represents a long-term solution intended to enhance recovery from this oil pool.

Volatility throughout world financial markets continues to undermine investor confidence.  Global events, like the worldwide debt crisis, integrate quickly and deeply into all financial markets and make it difficult to forecast and manage day-to-day business activities.

As the natural gas oversupply situation unfolds throughout 2012 summer, Wrangler West is committed to maintaining a defensive position. Operational efficiencies can occur during the summer season due to lower expenses in the absence of adverse weather conditions.  Looking toward the 2012 summer drilling season, oilfield activity levels and equipment availability appear quite favourable for achieving competitive pricing which could lead to expansion of Wrangler West's exploration budget.

During 2012, Wrangler West expects to continue to focus on organic growth using the drill bit.  We have prepared and organized three oil-prone opportunities on 15 sections of land.  Drilling of each prospect will be conditional on well-by-well success.  We will be watching closely for improvement in natural gas prices as we conservatively manage both cash flow and the Company's available credit facility.

WRANGLER WEST ENERGY CORP.
STATEMENTS OF FINANCIAL POSITION
(Stated in thousands of dollars) (unaudited)
		March 31, 2012		December 31, 2011
Assets
Current assets
	Accounts receivable	$                    471		$                    756
	Prepaid expenses	160		212
		631		968
Property, plant and equipment		26,311		26,995
		$               26,942		$               27,963
Liabilities and shareholders' equity
Current liabilities
	Bank indebtedness	$                 4,074		$                 3,156
	Accounts payable and accrued liabilities	983		1,999
		5,057		5,155
Decommissioning obligations		2,376		2,369
Deferred income tax		2,569		2,804
		10,002		10,328
Shareholders' equity
	Common shares	12,402		12,402
	Contributed surplus	4,787		4,740
	Retained earnings (deficit)	(249)		493
		16,940		17,635
		$               26,942		$               27,963

WRANGLER WEST ENERGY CORP.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in thousands of dollars, except per share amounts) (unaudited)
		Three months ended March 31
		2012		2011
Revenue
	Petroleum and natural gas sales	$                 1,932		$                  3,401
	Royalties	(306)		(500)
		1,626		2,901
Expenses
	Operating	1,041		1,427
	General and administrative	277		307
	Share-based payments	25		-
	Depletion and depreciation	1,212		1,493
	Gain on sale of assets	-		(2)
Results from operating activities		(929)		(324)
Finance
	Interest and accretion	48		77
Loss before income tax		(977)		(401)
Deferred income tax benefit		(235)		(101)
Net loss and comprehensive loss		$                   (742)		$                    (300)
Net loss per share
	Basic and diluted	$                  (0.11)		$                   (0.05)

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Stated in thousands of dollars and shares) (unaudited)
		Number of common shares	Common shares	Contributed surplus	Retained earnings (deficit)	Total shareholders' equity
Balance at January 1, 2012		6,466	$    12,402	$     4,740	$       493	$       17,635
	Share-based payments	-	-	47	-	47
	Net loss	-	-	-	(742)	(742)
Balance at March 31, 2012		6,466	$    12,402	$     4,787	$      (249)	$      16,940
Balance at January 1, 2011		6,466	$    12,402	$     4,538	$     2,297	$      19,237
	Net loss	-	-	-	(300)	(300)
Balance at March 31, 2011		6,466	$    12,402	$     4,538	$    1,997	$      18,937

WRANGLER WEST ENERGY CORP.
STATEMENTS OF CASH FLOWS
(Stated in thousands of dollars) (unaudited)
			Three months ended March 31
			2012		2011
Cash provided by (used in):
Operating
	Net loss		$                   (742)		$                  (300)
	Items not involving cash:
		Depletion and depreciation	1,212		1,493
		Accretion	15		18
		Share-based payments	25		-
		Gain on sale of assets	-		(2)
		Deferred income tax benefit	(235)		(101)
			275		1,108
	Change in non-cash operating working capital		227		179
			502		1,287
Financing
	Increase in bank indebtedness		918		763
Investing
	Property, plant and equipment expenditures		(514)		(864)
	Proceeds on sale of assets		-		26
	Change in non-cash investing working capital		(906)		(1,212)
			(1,420)		(2,050)
Cash and cash equivalents, beginning and end of period			$                        -		$                        -
Supplementary cash flow information
	Interest paid		(42)		(57)
	Income tax refund		-		74

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") related to 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 the FLS because the Company can give no assurance they 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 year 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 common shares trade on the TSX Venture Exchange under the symbol "WX".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in the policies of the TSX Venture Exchange) accepts 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]