Wrangler West Issues Interim Report

Wrangler West Energy Corp. on Thursday announced its financial results for the three and six months ended June 30, 2006, together with comparative data for the same periods in 2005.

Wrangler West is a Canadian junior oil and natural gas producer building production and assets through exploration in Alberta. Since inception, our mandate is to use the drill bit to add value for our shareholders and to maximize return on invested capital. Disciplined management of our finding costs and production portfolio creates sufficient cash flow to internally fund growth. Wrangler West will continue to reinvest cash flow and to protect shareholder equity by remaining loyal to our mandate.

During the first six months of 2006 Wrangler West's accomplishments include:

--31 percent increase in production
--51 percent increase in revenue
--32 percent increase in funds flow from operations
--new production awaiting tie-in
--successful recompletions at Riviere.

Note: 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 boe (barrels of oil equivalent) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf equals one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Wrangler West Energy Corp. ("Wrangler West") is pleased to report successful exploration and development drilling as well as positive financial results for the three and six months ended June 30, 2006. Since the beginning of this year, we have drilled seven wells (6.5 net). During the 2006 second quarter we drilled four wells and achieved a 75 percent success rate, resulting in two oil wells, one natural gas well and one well that was dry and abandoned.

In Wrangler West's Riviere core area, successful second quarter drilling led to the acquisition of 17 square kilometers of 3D seismic. The two step-out oil wells completed during this quarter have extended the Wabamum oil pool. Successful production testing will establish the fundamentals for further development drilling locations as well as adding new reserves to Wrangler West's asset base.

Pipeline construction and tie-in of the newly drilled wells to Wrangler West's production facility in Riviere will begin following conclusion of surface access negotiations. The route for the required pipeline is geographically complex and we anticipate that its completion will delay delivery of new production until the 2006 fourth quarter.

During 2006, Wrangler West's technical team has designed and implemented a workover program for Riviere to recomplete and stimulate existing wells producing from the Wabamum oil pool. To date, this program's encouraging results have increased production deliverability from current wellbores. We will continue this recompletion activity throughout 2006.

In Craigmyle, we continue to address plant constraints and production declines. During the 2006 second quarter, we drilled two wells, one natural gas well and one dry and abandoned well. We completed pipelining and tie-in for the new natural gas well. Currently, natural gas production from Craigmyle is approximately 4 mmcf per day. Craigmyle continues to provide the cash flow required to fund our exploration efforts at Riviere.

Throughout 2006, crude oil prices continue to test new highs while natural gas prices have trended downward. For the first time in our generation of work experience, the historical relationship between crude oil and natural gas prices appears to have fully disconnected. We believe this trend will continue because of oil supply uncertainty and price volatility related to political instability in the Middle East. Wrangler West strives for balance in its production portfolio of crude oil and natural gas. This strategy is mitigating the effect of weaker natural gas prices. One year ago, Wrangler West's second quarter natural gas spot price averaged $7.78 per mcf whereas, during the 2006 second quarter, our average natural gas price was $6.53 per mcf.

Current weakness in natural gas price may appear dramatic compared to historical winter season peak pricing. However, Wrangler West's perspective is that natural gas demand and price is seasonally cyclical and the 2006 second quarter average price is the result of softness normally experienced in the summer shoulder season. From an industry perspective, many companies have announced modest 2006 budget reductions, especially for shallow natural gas drilling. As a result of this trend, Wrangler West may experience somewhat improved access to drilling rigs, related services and pipelining crews. We still anticipate an extremely busy winter season for our industry. Once again, we will endeavor to complete the majority of Wrangler West's drilling activity before the rig fleet moves north for the winter.

Wrangler West's 2006 annual exploration budget remains at $15 million. Strong commodity prices will continue to support our budget. To the end of the second quarter, we have spent close to 50 percent of our 2006 budgeted capital expenditures. We continue to have an inventory of opportunities available to us to satisfy our 2006 exploration plans.

Wrangler West is poised to build momentum in our development drilling program due to successful initiatives from our 2006 second quarter. The full field development of our Wabamum oil pool continues to evolve as we learn more about the reservoir and exploit the significant potential of this valuable asset. We believe we have resolved pumping and lifting issues and our new stimulation project is achieving improved production performance. Riviere has significant oil in place and Wrangler West's objective is to continue to increase the recoverable reserves from this asset. This core area has now become our primary focus and we will direct the majority of our 2006 exploration efforts toward analyzing and capturing its full potential.

Total production for the six months ended June 30, 2006 has risen 31 percent due to volume growth in crude oil at Riviere and natural gas at Craigmyle.

Total production for the three months ended June 30, 2006 rose six percent from the first quarter of 2006.

New production from drilling during the second quarter is awaiting tie-in which we expect to complete during the 2006 fourth quarter.

For the six months ended June 30, 2006, the 15 percent growth in revenue from the same period one year ago resulted from increased production and the strength of crude oil prices.

Revenue during the three months ended June 30, 2006 is only slightly higher than for the 2006 first quarter because higher production was offset by lower natural gas prices received during the current quarter.

The increase in total royalties from one year ago for the six month period ended June 30, is primarily due to increases in combined commodity prices and increases in production volumes.

From the 2006 first quarter, total royalties as a percentage of revenue, have decreased approximately seven percent, due to the lower price received for natural gas during the second quarter.

Operating expenses within the industry are rising as reflected in the accompanying financial statements. Wrangler West estimates 2006 operating expenses at approximately $10.00 per boe.

Wrangler West's total operating expenses are rising due to the increase in our production volumes. Operating expenses, on a per boe basis, continue to rise due to the increased costs of equipment and contracted services.

Operating expenses were lower than the 2006 first quarter rate of $9.46 per boe as a result of a continuing operating optimization program commissioned in late 2005 which included pump replacements and field electrification of our Riviere oil pool.

Field netbacks have remained constant from the first six months one year ago and have increased since the first quarter of 2006 when combined netbacks were $27.87, reflecting the impact of higher crude oil prices during the current quarter.

The seven percent increase on a per boe basis for the six months ended June 30, 2006 compared to the same period one year ago reflects a general increase in costs. During the second quarter of 2006, Wrangler West capitalized $130,000 (2005 - $157,000) of G&A associated with exploration activities.

G&A is only slightly higher than the first quarter of 2006. Throughout 2006, we expect G&A to remain constant on a per boe basis.

Interest expense for the six months ended June 30, 2006 reflects less use of our borrowing facility during the period.

Interest expense for the second quarter 2006 is slightly higher than the first quarter of 2006 due to fluctuations in interest rates and in the use of Wrangler West's borrowing facility.

Total DD&A is eleven percent higher than one year ago due to Wrangler West's growth in production.

On a per boe basis, DD&A for the 2006 second quarter is slightly lower than the 2006 first quarter due to internally estimated additions to reserves late in the second quarter.

Wrangler West's earnings for the six months ended June 30, 2006 reflect growth in production and strong crude oil prices somewhat offset by the softening of natural gas prices. During the three months ended June 30, Wrangler West's income tax provision reflects capital expenditures related to the company's exploratory drilling program and elimination of current income tax for the year to date with a corresponding increase in future income tax. In addition, substantively enacted legislation resulted in reduced federal and Alberta income tax rates leading to a one time reduction in future income tax during the second quarter. As a result, the net income tax recovery for the three months ended June 30, 2006 was $144,809 and, for the six months ended June 30, 2006, the provision was $231,192.

Funds flow from operations has increased 32 percent from the six month period one year ago. The 2006 second quarter is 53 percent higher than the 2006 first quarter due to higher production volumes, strong combined commodity prices as well as a reversal of the 2006 first quarter provision for current income tax.

Wrangler West had a working capital deficiency, including bank indebtedness, of $6.9 million at June 30, 2006 ($7.6 million at June 30, 2005 and $5.7 million at March 31, 2006).

During the second quarter, Wrangler West's revolving demand credit facility increased to $13.0 million from $10.0 million. At June 30, 2006, $3.3 million was drawn on the line. We will continue to use cash flow and the credit facility to achieve our 2006 capital expenditures budget of $15.0 million.

t June 30, 2006, Wrangler West's total capitalization was $56.8 million based on the June 30 closing price of $7.85 per share. As at August 15, 2006, Wrangler West had 6,360,827 common shares outstanding.

During the six months ended June 30, 2006, Wrangler West incurred $7.3 million on capital projects. In the second quarter, we spent $4.5 million to drill two oil wells at Riviere and two natural gas wells at Craigmyle of which one was dry and abandoned. We followed up our successful exploration efforts during the first half of 2006 with additional 3D seismic activity to define new drilling targets. Our drilling program, as defined by this proprietary data, will consume the balance of our 2006 forecasted capital expenditures program.

During the three months ended June 30, 2006 Wrangler West's income tax provision reflects capital expenditures related to the company's exploratory drilling program and elimination of current income tax for the year to date with a corresponding increase in future income tax. In addition, substantively enacted legislation resulted in reduced federal and Alberta income tax rates leading to a one time reduction in future income tax during the 2006 second quarter.

OUTLOOK

Wrangler West's successful exploration and positive financial results have created the momentum to expand our development drilling program within our core asset at Riviere. In addition to these development opportunities in the Wabamum oil pool, we have embarked on a recompletion initiative that significantly improves our wellbore stimulation through fracturing techniques. Early indications of improved production performance are positive. As we have previously commented, Riviere has significant oil in place and our job is to continually improve the deliverability potential of this asset. We will continue to pursue natural gas exploration and, currently, have additional natural gas production cased, tested and awaiting gas plant access and tie-in.

Wrangler West looks forward to capturing the opportunities we have identified within our current inventory which will ultimately maximize value for our shareholders.

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