CALGARY, April 15 /CNW/ -- 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.( )
HIGHLIGHTS Year ended 2009 % Change December 31 2010 OPERATIONAL
HIGHLIGHTS Production Crude oil and 293 NGL (bbls/d) 282 (4)
Natural gas 4,972 (21) (mcf/d) 3,935 Total (boe/d) 938 1,122 (16)
Prices Crude oil and 58.61 21 NGL ($/bbl) 70.82 Natural gas 4.47
($/mcf) 4.36 (2) Per boe ($) Petroleum and 35.14 13 natural gas
revenue 39.56 Royalties (5.20) 21 (6.28) Operating (13.71) expenses
(13.42) (2) Field netbacks 19.86 16.23 22 General and (3.09) 5
administrative (3.25) Interest (0.81) (1.29) (37) Current income
2.02 (98) tax recovery 0.04 Funds flow 13.87 14 from operations
15.84 Depletion, (23.50) 1 depreciation and accretion (23.65)
Stock-based (1.32) (54) compensation (0.61) Future income 2.31 tax
reduction 2.25 (3) Net loss (6.17) (8.64) (29) FINANCIAL HIGHLIGHTS
($ thousand) Petroleum and 14,382 natural gas (6) revenue 13,541
Royalties (2,150) (2,128) 1 Operating (5,613) (18) expenses (4,592)
General and (1,263) (12) administrative (1,113) Interest (276)
(528) (48) Current income 827 (98) tax recovery 15 Funds flow 5,678
from (4) operations 5,426 Depletion, (9,619) (16) depreciation and
accretion (8,093) Stock-based (540) (61) compensation (209) Future
income 944 (18) tax reduction 771 Net loss (2,105) (3,538) (40)
Outstanding shares (thousand) Weighted 6,397 1 average - basic
6,446 Weighted 6,653 5 average - diluted 6,983 Funds flow 0.89 from
(6) operations - basic ($/share) 0.84 Funds flow 0.85 from (8)
operations - diluted ($/share) 0.78 Net loss - (0.55) (40) basic
and diluted ($/share) (0.33) Total assets 40,239 (13) ($ thousand)
34,896 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) Gross Gross (1) (2)
Net(3) 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 Assets Current assets Accounts $ receivable $
1,409,114 (note 8 (a)) 1,406,117 Income tax receivable 73,546
531,320 Prepaid expenses 144,475 370,617 1,624,138 2,311,051
Property and equipment (note 33,271,587 37,927,574 3) $ 34,895,725
$ 40,238,625 Liabilities and shareholders' equity Current
liabilities Bank $ indebtedness 8,730,519 (note 4) $ 6,354,223
Accounts payable and accrued liabilities 3,259,522 3,358,013
9,613,745 12,088,532 Asset retirement 1,872,755 2,333,765
obligation (note 5) Future income tax (note 6) 3,608,345 4,340,557
15,094,845 18,762,854 Shareholders' equity Share capital 11,390,557
(note 7) 11,598,557 Contributed surplus 4,300,823 (note 7(e))
4,523,342 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 Revenue Petroleum
and $ natural gas 13,541,032 14,382,179 Royalties (2,149,685)
(2,127,718) 11,391,347 12,254,461 Expenses 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): Operating $ $ 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 Financing Decrease in bank
indebtedness, original credit facility (8,730,819) (1,542,434)
Increase in bank indebtedness, new credit facility 6,354,523 -
Issuance of common shares 112,500 56,250 (2,263,796) (1,486,184)
Investing Additions to petroleum and natural gas properties
(7,385,966) (2,649,781) Dispositions of petroleum and natural gas
properties 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.
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p bWrangler We/bbst Energy Corp./bbr/ Steven F. Johnsonbr/
President and Chief Executive Officerbr/ a
href="mailto:Steve@wranglerwest.ca"Steve@wranglerwest.ca/a /p p
align="justify" telephone: (403) 290-6800 /p
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