Wrangler West Reports 2012 First Quarter Operating and Financial Results
May 21 2012 - 5:05PM
PR Newswire (Canada)
CALGARY, May 23, 2012 /CNW/ - Wrangler West Energy Corp. ("Wrangler
West" or the "Company") 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 247 NGL (bbls/d) 139 (44)
Natural gas 4,077 4,704 (mcf/d) (13) Total 1,031 production 818
(21) (boe/d) Prices Crude oil and 86.58 78.39 NGL ($/bbl) 10
Natural gas 3.92 ($/mcf) 2.26 (42) Per boe ($) Petroleum and 25.95
36.66 natural gas (29) revenue Royalties (5.39) (4.11) (24)
Operating (13.98) (15.38) expenses (9) Netback 15.89 7.86 (51)
General and (3.72) (3.31) administrative 12 Interest (0.63) (0.44)
(30) Funds flow 11.95 from 3.70 (69) operations Share-based
payments (0.34) - - Depletion and (16.28) (16.09) depreciation 1
Gain on sale 0.02 (100) of assets - Accretion (0.20) (0.20) -
Deferred 1.08 193 income tax 3.16 benefit Net loss (3.24) 207
(9.96) FINANCIAL HIGHLIGHTS ($ thousand) Petroleum and 1,932 3,401
natural gas (43) revenue Royalties (500) (306) (39) Operating
(1,041) (1,427) expenses (27) General and (307) administrative
(277) (10) Interest (33) (59) (44) Funds flow 1,108 from 275 (75)
operations Share-based payments (25) - - Depletion and (1,212)
(1,493) depreciation (19) Gain on sale (100) of assets - 2
Accretion (15) (18) (17) Deferred 101 133 income tax 235 benefit
Net loss (300) 147 (742) Funds flow from operations - basic and
0.17 diluted 0.04 (76) ($/share) Net loss - (0.05) 120 basic and
(0.11) diluted ($/share) Total assets 26,942 34,172 ($ thousand)
(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 $ 1,932 $ 3,401 natural gas sales Royalties (306) (500) 1,626
2,901 Expenses Operating 1,041 1,427 General and administrative 277
307 Share-based payments 25 - Depletion and 1,212 1,493
depreciation Gain on sale of assets - (2) Results from operating
(929) (324) activities Finance Interest and accretion 48 77 Loss
before income tax (977) (401) Deferred income tax benefit (235)
(101) Net loss and $ (742) $ (300) comprehensive loss Net loss per
share Basic and $ (0.11) $ (0.05) diluted STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY (Stated in thousands of dollars and shares)
(unaudited) Number of Retained Total common Common Contributed
earnings shareholders' shares shares surplus (deficit) equity
Balance at 6,466 $ 12,402 $ 4,740 $ 493 $ 17,635 January 1, 2012
Share-based payments - - 47 - 47 Net loss - - - (742) (742) Balance
at 6,466 $ 12,402 $ 4,787 $ (249) $ 16,940 March 31, 2012 Balance
at 6,466 $ 12,402 $ 4,538 $ 2,297 $ 19,237 January 1, 2011 Net loss
- - - (300) (300) Balance at 6,466 $ 12,402 $ 4,538 $ 1,997 $
18,937 March 31, 2011 WRANGLER WEST ENERGYCORP. 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 1,212
1,493 and depreciation Accretion 15 18 Share-based payments 25 -
Gain on sale of assets - (2) Deferred income tax (235) (101)
benefit 275 1,108 Change in 227 non-cash 179 operating working
capital 502 1,287 Financing Increase in 918 bank 763 indebtedness
Investing Property, plant and (514) (864) equipment expenditures
Proceeds on sale of assets - 26 Change in non-cash (906) (1,212)
investing working capital (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 +1 403 290 6800 or e-mail
info@wranglerwest.ca). 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. CONTACT:
Wrangler West Energy Corp.Steven F. JohnsonPresident and Chief
Executive Officerinfo@wranglerwest.catelephone: (403) 290-6800
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