My name is Ersaly and I will be your conference operator today. At this time, I would like to welcome everyone to the VAALCO Energy’s First Quarter 2016 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions] I would now like to turn the conference over to VAALCO Chief Financial Officer, Don McCormack. Sir you may begin your conference.

Thanks, operator. And on behalf of the management team, I welcome all of you to today's conference call to review VAALCO's first quarter 2016 operating and financial performance. After I cover the forward-looking statements, Steve Guidry, VAALCO's CEO, will review key highlights of the first quarter. Following Steve's comment, Cary Bounds our COO will then review operational results in more detail and our plans for 2016. I will then provide a more in-depth financial review and 2016 guidance. Steve will then return for some closing comments before we take your questions. During our question session, we ask you limit your questions to one question and then a follow-up. With that let me proceed with our forward-looking statement and comments. During this conference call, the Company will be making forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement. Forward-looking statements are those concerning VAALCO's plans, expectations, future drilling and completion activities, expected capital expenditures, sources of future capital funding and liquidity, future strategic alternatives, prospect evaluations, negotiations with governments and third parties, reserve growth and other operations. Investors are cautioned that forward looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements. VAALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on forward looking statements. These and other risks are described in yesterday's press release and in the reports we filed with the Securities and Exchange Commission, including the Company's form 10-K and the first quarter 2016 form 10-Q that will be filed soon. Please note that this conference call is being recorded. Let me now turn the call over to Steve.

Thank you Don good morning everyone and welcome to our first quarter 2016 earnings conference call. On the call this morning we will reference an updated investor handout that has been posted in the presentation section of our website under the Investor Relations tab. The first quarter of 2016 was another challenging one from a realized price perspective, but we were able to reduce our production costs and our G&A successfully the planned field wide maintenance turnaround at the Etame field and we've received a welcome payment from our Angola Block 5 partner for $19 million. In early 2016, we completed our multiyear offshore Gabon development program and a subsequent workover program that replaced down haul equipment in wells on the Abuma platform. After further significant decline in oil prices late last, year we decided to release the rig after the workover program was complete in January and are currently negotiating the remaining amount due. We need to see sustained commodity price improvement and a strengthening of our balance sheet before we initiate any further drilling campaign. Looking to the future, we've identified 17 new drilling opportunities on the Etame block and are developing an update Etame field development plan. While most of these projects are uneconomic in the current low price environment opportunities such as these along with developing our onshore Gabon discovery and the development of our existing discoveries in Equatorial Guinea demonstrate the potential VAALCO has when the pricing environment becomes more positive. In Angola, we're in discussions with the government to extend our Block 5 license beyond November 2017. Turning now to cost, the steps we took in 2015 as well as the additional steps we're taking in 2016 to further reduce our production costs and our G&A expenses came through in the first quarter results.…

Thank you, Steve. I will spend the next few minutes reviewing our first quarter operational results, which demonstrates our commitment to increasing margins by optimizing production and lower costs. Starting with production, the Etame wells drilled and completed year are meeting expectations and the new SEENT wells continue to exceed expectations, as a result of closely monitoring well performance and adjusting operating conditions to maximize production we've been able to hold SEENT production relatively flat at approximately 5,500 barrels of oil per day gross. Unfortunately we lost one of our Avouma platform producers in the first quarter when the electric submersible pump or ESP failed in the South Tchibala [1-HB] (Ph) well. Prior to the ESP barrier the well was producing approximately 1,000 barrels of oil per day gross or 250 barrels of oil per net and the loss contributed to first quarter production coming in slightly below our guidance range. However, as a result of production optimization across the entire field total company production averaged approximately 4,800 BOE per day net in April. Given our success at optimizing production, we are not changing our full-year guidance - our full-year production guidance of 3,700 BOE per day net to 4,500 BOE per day net. Now I would like to spend a few minutes recapping the work over campaign that was conducted earlier in the year, as I mentioned down the call in March we conducted three workovers at Avouma starting in December 2015 and finishing in January 2016. The objectives of the work over program were to replace electric submersible pumps or ESPs in three wells on the Avouma platform. Two of the wells were not producing at the time of the workovers and the third well was producing at constrained rates due to mechanical degradation of the ESP. We…

Thank you Cary. We filed our earnings release yesterday evening and plan to file our 10-Q no later than next Tuesday May 10. Today I would be covering the earnings release. The updated investor deck on our website also has additional financial analysis in comparison that should be helpful. I'll try to keep my comments brief this morning by reviewing the highlights in that repeating everything disclosed in our release. Our realized oil price for the first quarter of 2016 averaged $28.54 per BOE which was down 41% from the same period last year and down 27% from the previous quarter. That sharp decline in price along with lower sales volumes due to the planned offshore Gabon maintenance turnaround in February significantly reduced our Q1 revenue. The $19 million payment we received on March 14, 2016 from our Angola Block 5 partner consisted of three components. It reduced our accounts receivable by $8 million, we were able to recover $7.6 million which had been previously written off and finally we've included $3.2 million in interest. That benefit was partially offset by our accrual of $8.9 million associated with the rig demobilization and the remaining rig contract term costs. Those are all pre-tax numbers and were contributing factors that resulted in the net loss of $8 million or a $0.14 loss per diluted share on a GAAP book basis. In the first quarter, net production totaled 4,516 BOE per day. This was just below our guidance range of 4600 to 4800 BOE per day. As Cary discussed we lost an Abuma platform well that was producing 250 BOE per day net to us in March. This was a contributing factor to the lower Q1 volumes. However, we did in fact average approximately 4,800 BOE per day in April. Therefore, we do…

Thanks, Don. As you've heard on the call today our strategy remains clear. Continuing to be proactive in this challenging environment by remaining focused on lowering costs, optimizing production, preserving cash and exploring our optionality. We have a clean balance sheet with only $15 million in debt and $41 million in cash on hand at the end of the quarter included restricted cash. Cary detailed how we are constantly optimizing production and looking for opportunities to maximize our cash flows. Through all of these accomplishments we continue to examine our organic growth opportunities in 2017 and beyond. When prices will hopefully would turn to higher levels. We also have opportunities to develop existing discovered resources in both offshore and onshore Gabon and offshore Equatorial Guinea. We continue to actively pursue a wide range of options and opportunities, as we have announced at the end of January we are looking at strategic alternatives to further enhance shareholder value. This encompasses multiple options including securing additional investment to bolster our liquidity to fund our attractive future development options. We're also considering joint ventures, asset sales, our firm outs as well as the sale or merger of the company. We believe VAALCO has the right structure in place to consolidate and operate a broader portfolio of assets. We have the right management team and a board in place to capture potential upside value in the current market. VAALCO has built an excellent reputation as a proven operator with a track record of success in West Africa. We have safely and successfully executed multiple development programs and have a history of strong co-operation with host governments and local partners. We have the expertise and the operational capacity to execute on organic development opportunity and acquisitions. In summary, I would like to reemphasize our commitment to our stakeholders. We continue to safely achieve strong production results, lower our overall cost structure and focus on preserving cash. We have an opportunity to dramatically impact our future, we are pursuing options to unlock and enhance shareholder value. Thank you for your attention and with that, I think we are ready to take questions.

[Operator Instructions] and your first question comes from [Bill Develam] (Ph).

Thank you, a couple of questions. First of all would you discuss your plan for the ESP that the sales and given that your CapEx budget is so low.

Bill this is Cary, the plan right now is to leave the well shut in, it was the South Tchibala 1-HB well where we had the failed ESP. Right now, the returns on the economics we're replacing ESP as a shift on economics. So we're going to leave it shut it for now. We can conduct a workover later when prices improve, but for now we're going to leave the well shut in.

And so it's not a timing issue i.e. 2017 first half, second half, it really is a function of oil prices.

It is a function of oil prices, yes. And like I mentioned we've been able to make up - offset that loss with optimization in other areas.

And Cary would you talk to further about that. What you did, how you did that, and given that you were able to accomplish that are there similar opportunities across the other aspects of the business that you do.

Right. Sure, I'll elaborate a little bit. In terms of optimizing production we looked across the entire field and it's really all about removing back pressure and so we were optimizing our processes and facilities. And as you'll recall the platform, the two new platforms were installed in 2014 and first production was in 2015. So you know there's been a lot of troubleshooting on the new platforms and finding, you know understanding how the best way to operate the platforms. And like I mentioned on our SEENT platform, where we have three new wells the two new North Tchibala 1-H and 2-H then our Southeast Etame 2-H. That production has remained flat on that platform and we did this you know we have the same results at the Etame platform and then of course Avouma we're always looking for way to remove a little bit of back pressure here and there and keep production high.

So this a process that you have ongoing across the other platforms but you had to make I guess a concerted extra effort or sprint if you will when this ESP failed.

Right, right, the production optimization is ongoing and it's our team of engineers here in Houston working with our operations team in Gabon. They talk on a weekly basis and look for ways. So optimizing production was already in progress and we’ve had a lot of success.

Thank you. And then second question is relative to the $19 million Angola Block 5 payment. I apologize for being a slow pony here, but I'm not able to reconcile that $19 million with the reconciliation of net income to adjust the net income on the last page.

Hey Bill, Don McCormack here. So the thing to remember, we did receive $19 million but as I mentioned $8 million was in accounts receivable. So the net impact on the working capital would be $11 million and then as far as income goes, we've written off $7.6 million. So that is income to us pre-tax in the quarter and then we had $3.2 million that was interest income that also impacts the quarter, but we adjust those out because they're non-recurring and not something you get every quarter.

And so the remaining component is that EAR that you said was what again please.

$8 million.

Got it. Alright. Thank you very much.

[Operator Instructions] And your next question comes from [indiscernible].

Hi guys congrats on the quarter. just curious with the Angola government discussion, is there a timeframe that you would be looking to extend that until the drilling commitments?

Yes thank you for question James, this is Steve. Typically, extensions of this nature are anywhere from three to five-years, it remains to be seen just one, if we will get an extension, assuming we do, just what might the time that will be? We have lots of reasons to expect that the government will be sensitive to and open to the ideal of an extension. As you would expect right, our partner being Sonangol P&P who is the government national oil company, they are experiencing cash constraints just like the rest of the industry and so we have high level of confidence that we'll be able to work something out there. What exactly we work out, we don't know yet.

Thanks a lot.

And your next question comes from [Neil Nelson] (Ph).

Is VAALCO realizing a premium or a discount to the day applicable Brent for its lifting's and if so what is the amount and when does the current contract expire?

Yes Neil this is Steve, thanks for the question. We are currently marketing our crude at a discount to Brent. I think we have, we've said before that that discount is in the $4 to $5 range. I would tell you that it has been slightly improving, but it's still within that range, and the contract we currently have runs through July.

Thank you. That’s all my questions.

Okay thanks Neil.

[Operator Instructions] And there are no questions.

Okay, well again thanks for everyone's attention and we appreciate your continued interest in VAALCO. And I hope that you saw and sensed what we feel and that is a great sense of pride in what we've been able to accomplish in the improvements we've made in our business with our expense cuts, our G&A cuts and our ability to maximize production. This is exactly what it is, what we needed to do. And so you have our word that we will continue to optimize everywhere we can. So thanks for your interest.

And this concludes today's conference call. You may now disconnect.