CALGARY, Nov. 19, 2013 /CNW/ – Wrangler West Energy Corp. (“Wrangler West” or the “Company“) (TSX-V “WX“) announces filing on SEDAR of the Company’s unaudited Financial Statements and related Management’s Discussion and Analysis (“MD&A”) and the 2013 Third Interim Report to Shareholders for the three and nine months ended September 30, 2013 with comparative data for the three and nine months ended September 30, 2012. All documents may be viewed at www.sedar.com.
2013 Nine Months Review
During the first nine months of 2013, Wrangler West produced 607 barrels of oil equivalent (“boe”) per day, a 14 percent decrease compared to the same period one year ago. The lower production volumes are consistent with our corporate declines as reflected within the corporate reserves report effective December 31, 2012. Currently, the Company is 80 percent weighted toward natural gas.
Natural gas price remained weak and somewhat rangebound as supply continued to outpace demand. Natural gas storage is essentially full and the Canadian dry natural gas business is being crushed by the aggressive pursuit of liquids-rich resource plays throughout North America. Small conventional public junior companies are hard-pressed to compete for the capital required to explore and capture the opportunity associated with large resource plays. Once again, cold weather in the northeastern United States will primarily determine the near-term outlook for North American natural gas prices. Canadian natural gas volumes continue to subside as increased volumes of US production are delivered to market.
Crude oil price has been strong for most of this year. However, recently oil price differentials have returned to the $40.00 level causing a drop in netbacks and cash flow. Until new shipping alternatives improve world market access, North American producers can likely expect continuing volatility in differentials.
Corporate Update
On September 3, 2013, the Company announced an amendment to the Company’s revolving operating demand loan agreement (“Credit Facility”) with Canadian Western Bank (the “lender”) in the amount of $4.9 million with a monthly reduction of $100,000 beginning September 26, 2013 and a maturity date of December 31, 2013. The amended Credit Facility bears annual interest calculated at prime plus 2.5 percent. The Board of Directors (“Board”) approved the amendment to the Credit Facility and the Company expects to use the Credit Facility to fund its ongoing operations and working capital deficiency. The lender cancelled the non-revolving acquisition/development demand loan portion of the previous Credit Facility agreement.
Also on September 3, 2013, Wrangler West announced the initiation of a strategic alternatives process to identify, examine and consider a range of strategic alternatives with a view to enhancing shareholder value (the “process”). Strategic alternatives are not limited to, but may include, a potential sale of all, or a material portion of, the Company’s assets either in one transaction or in a series of transactions; the outright sale of the Company; a joint venture or a merger; or any other strategic transaction involving Wrangler West and a third party.
The Board established a Special Committee comprised of independent directors to oversee the process and retained Sayer Energy Advisors to assist the Special Committee and the Board. As outlined in the announcement, there is no definitive schedule and this process is continuing.
| WRANGLER WEST ENERGY CORP. | |||||
| STATEMENTS OF FINANCIAL POSITION | |||||
| (Stated in thousands of dollars) | |||||
| (Unaudited) | |||||
| September 30, 2013 | December 31, 2012 | ||||
| Assets | |||||
| Current assets | |||||
| Accounts receivable | $ | 371 | $ | 1,079 | |
| Prepaid expenses | 214 | 132 | |||
| 585 | 1,211 | ||||
| Property, plant and equipment (note 4) | 21,883 | 24,132 | |||
| $ | 22,468 | $ | 25,343 | ||
| Liabilities and shareholders’ equity | |||||
| Current liabilities | |||||
| Bank indebtedness (note 6) | $ | 4,692 | $ | 4,734 | |
| Accounts payable and accrued liabilities | 1,122 | 2,073 | |||
| 5,814 | 6,807 | ||||
| Decommissioning obligations (note 7) | 2,939 | 3,068 | |||
| Deferred income tax | 1,062 | 1,509 | |||
| 9,815 | 11,384 | ||||
| Shareholders’ equity | |||||
| Common shares (note 8) | 12,402 | 12,402 | |||
| Contributed surplus | 4,969 | 4,909 | |||
| Retained deficit | (4,718) | (3,352) | |||
| 12,653 | 13,959 | ||||
| Going concern (note 2 and 6) | |||||
| $ | 22,468 | $ | $ 25,343 | ||
| WRANGLER WEST ENERGY CORP. | ||||||||||
| STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||
| (Stated in thousands of dollars, except per share amounts) | ||||||||||
| (Unaudited) | ||||||||||
| Three months ended | Nine months ended | |||||||||
| September 30 | September 30 | |||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||
| Revenue | ||||||||||
| Petroleum and natural gas sales | $ | 1,481 | $ | 1,349 | $ | 5,350 | $ | 4,831 | ||
| Royalties | (242) | (193) | (853) | (498) | ||||||
| 1,239 | 1,156 | 4,497 | 4,333 | |||||||
| Expenses | ||||||||||
| Operating | 741 | 684 | 2,805 | 2,536 | ||||||
| General and administrative | 276 | 232 | 912 | 744 | ||||||
| Share-based payments | 29 | 22 | 53 | 73 | ||||||
| Depletion and depreciation | 690 | 850 | 2,469 | 3,146 | ||||||
| Gain on sale of assets | (9) | – | (33) | – | ||||||
| Results from operating activities | (488) | (632) | (1,709) | (2,166) | ||||||
| Finance expenses (note 10) | 75 | 54 | 206 | 151 | ||||||
| Other income | (47) | – | (101) | (118) | ||||||
| Loss before income tax | (516) | (686) | (1,814) | (2,199) | ||||||
| Deferred income tax benefit | (122) | (161) | (448) | (523) | ||||||
| Net loss and comprehensive loss | $ | (394) | $ | (525) | $ | (1,366) | $ | (1,676) | ||
| Net loss per share (note 9) | ||||||||||
| Basic and diluted | $ | (0.06) | $ | (0.08) | $ | (0.21) | $ | (0.26) | ||
| WRANGLER WEST ENERGY CORP. | ||||||||||
| 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 January 1, 2013 | 6,466 | $ | 12,402 | $ | 4,909 | $ | (3,352) | $ | 13,959 | |
| Share-based payments | – | – | 60 | – | 60 | |||||
| Net loss | – | – | – | (1,366) | (1,366) | |||||
| Balance at September 30, 2013 | 6,466 | $ | 12,402 | $ | 4,969 | $ | (4,718) | $ | 12,653 | |
| Balance at January 1, 2012 | 6,466 | $ | 12,402 | $ | 4,740 | $ | $ 493 | $ | 17,635 | |
| Share-based payments | – | – | 137 | – | 137 | |||||
| Net loss | – | – | – | (1,676) | (1,676) | |||||
| Balance at September 30, 2012 | 6,466 | $ | 12,402 | $ | 4,877 | $ | $ (1,183) | $ | 16,096 | |
| WRANGLER WEST ENERGY CORP. | ||||||||||
| STATEMENTS OF CASH FLOWS | ||||||||||
| (Stated in thousands of dollars) | ||||||||||
| (Unaudited) | ||||||||||
| Three months ended | Nine months ended | |||||||||
| September 30 | September 30 | |||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||
| Cash provided by (used in): | ||||||||||
| Operating | ||||||||||
| Net loss | $ | (394) | $ | (525) | $ | (1,366) | $ | (1,676) | ||
| Items not involving cash: | ||||||||||
| Depletion and depreciation | 690 | 850 | 2,469 | 3,146 | ||||||
| Accretion | 24 | 13 | 63 | 39 | ||||||
| Share-based payments | 29 | 22 | 53 | 73 | ||||||
| Gain on sale of assets | (9) | – | (33) | – | ||||||
| Deferred income tax benefit | (122) | (161) | (448) | (523) | ||||||
| 218 | 199 | 738 | 1,059 | |||||||
| Change in non-cash operating | ||||||||||
| working capital (note 11) | (145) | 121 | 571 | (197) | ||||||
| 73 | 320 | 1,309 | 862 | |||||||
| Financing | ||||||||||
| Increase (decrease) in bank indebtedness | (75) | 300 | (42) | 1,322 | ||||||
| Investing | ||||||||||
| Property, plant and equipment expenditures | (38) | (862) | (481) | (1,858) | ||||||
| Proceeds on sale of assets | 9 | – | 110 | – | ||||||
| Change in non-cash investing | ||||||||||
| working capital (note 11) | 31 | 242 | (896) | (326) | ||||||
| 2 | (620) | (1,267) | (2,184) | |||||||
| Cash and cash equivalents, | ||||||||||
| beginning and end of period | $ | – | $ | – | $ | – | $ | – | ||
| Supplementary cash flow information | ||||||||||
| Interest paid | (46) | (40) | (139) | (108) | ||||||
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, 2012. Alternatively, to obtain copies of published corporate information, contact Crista L. Ferguson, Chief Financial Officer, Wrangler West Energy Corp., 2300, 444 Fifth Avenue SW, Calgary, Alberta, Canada T2P 2T8 (telephone +1 403 290 6800 or e-mail info@wranglerwest.ca).
Reader Advisory
The third interim report unaudited condensed interim financial statements have been prepared by, and are the responsibility of, Wrangler West’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements.
This news release may contain forward-looking statements (“FLS”) related to potential crude oil and natural gas drilling, tie-ins, production operations, sources and use of capital, asset purchases or dispositions, the potential outcome of a strategic alternatives process and expected future operations. Although Wrangler West believes the expectations reflected in FLS are reasonable, undue reliance should not be placed on FLS because the Company can give no assurance they will prove correct. FLS address future events and conditions and, by their very nature, involve inherent risks and uncertainties. A more detailed discussion of FLS is provided in Wrangler West’s Management’s Discussion and Analysis for the period ended September 30, 2013 and the year ended December 31, 2012 which is filed on SEDAR (www.sedar.com). The FLS contained in this news release are made as of the date hereof. Unless so required by applicable securities laws, 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.
Corporate Profile
Wrangler West is a Canadian junior crude oil and natural gas producer which explores for and develops natural gas and crude oil 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 funds flow for ongoing operations. 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.
SOURCE Wrangler West Energy Corp.
For further information:
Wrangler West Energy Corp.
Steven F. Johnson
President and Chief Executive Officer
info@wranglerwest.ca
telephone: (403) 290-6800