Good morning. My name is Becky and I will be your conference operator today. At this time, I would like to welcome everyone to the VAALCO Third 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]. Thank you. Chief Accounting Officer, Liz Prochnow, 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 third quarter 2016 operating and financial performance. After I cover the forward-looking statements, Cary Bounds, VAALCO's COO and Interim CEO, will review key highlights of the third quarter along with operational results. I will then provide a more in-depth financial review and updated 2016 guidance. Cary will then return for some closing comments before we take your questions. During our questions session, we ask that you limit your questions to one with a follow-up. I would like to point out, that we posted an updated Investor Deck on our website this morning that has additional financial analysis, comparisons and updated guidance that should be helpful. With that let me proceed with our forward-looking statement comments. During the course of 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. Statements made during this conference call that address activities, events, or developments that VAALCO expects, believes or anticipates, will or may occur in the future are forward-looking statements. These statements are based on assumptions made by VAALCO based on its experience, perception of historical trends, current conditions, expected future developments and other factors that believe are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond VAALCO's control. Investors are cautioned that forward-looking statements are not guarantees of future performance and that, and that 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 third quarter 2016 Form 10-Q that was filed yesterday. Please note that this conference call is being recorded. Let me turn the call over to Cary.

Thank you, Liz. Good morning everyone and welcome to our third quarter 2016 earnings conference call. The third quarter 2016 results show a sustained strength in our financial performance as we remain focused on enhancing existing production, controlling costs and operating safely. We generated $2.9 million in operating income, reported income from continuing operations of $0.2 million and generated $4.2 million in adjusted EBITDAX. Revenues decreased versus the prior quarter due primarily to lower volumes related to pump failures we encountered earlier this summer which resulted in temporarily shutting in two wells. However, we were able to decrease production expense and G&A allowing us to partially offset some of the decline in revenue. I will spend the next few minutes reviewing our third quarter operational results and expand on recent and near-term operational events, and in a few minutes Liz will go into more details regarding the financials. VAALCO's total production decreased 20% from 4,796 barrels of oil equivalent per day in the second quarter of 2016 to 3,836 barrels of oil equivalent per day in the third quarter of 2016, which was at the midpoint of our guidance for the third quarter. The primary reason for the production decrease was the failure of electric submersible pumps or ESPs that occurred in two wells on Avouma platform. The South Tchibala-2H well was producing over 400 barrels of oil equivalent per day, net to VAALCO prior to being temporarily shut-in due to the failure of both ESPs in late June. In late July, the Avouma 2-H well also experienced a failure in its primary ESP. In August, the secondary pump was successfully started but only remained operational for 10 days before also experiencing a failure. Prior to the primary ESP failure, the Avouma 2-H well was producing over 650 barrels of…

Thank you, Cary. Our third quarter 2016 operating income of $2.9 million showed marked improvement compared with a loss of $31 million in the third quarter of 2015 that was lower than the second quarter 2016 due primarily to lower sales volumes. Our oil sales volumes totaled 344,000 barrel down about $0.21 from the 436,000 in the second quarter. As Cary discussed, current quarter volumes were lower primarily due to ESP failures at Avouma. Our realized oil price for the third quarter of 2016 averaged $42.31 per barrel, essentially flat versus $42.13 in the second quarter of this year. As we disclosed in the earnings release, as a result of our decision to discontinued operation in Angola and withdraw from our production sharing agreement, the operating results of the Angola segment had been classified as discontinued in our financial statements for the current and all prior periods. Our loss from discontinued operations in the third quarter totaled $15.8 million or $0.27 loss per share. This loss is comprised almost exclusively of a non-cash accrual of $15 million related to the potential maximum penalty amount for not drilling the three remaining exploratory wells under our Angola production sharing agreement. As previously discussed in 2015, we wrote off essentially all of our investment in Angola. We have evaluated the penalty provisions of the joint operating agreement and believe that a substantial portion of that penalty amount has been reduced due to exploration expenditures already made by us in the past. We are providing support for our determination to Angola government authorities and we anticipate further discussions on this matter. However, due to the uncertainty of the resolution of this issue, we accrued $15 million during the third quarter which represents what we believe to be the maximum amount potentially due. As a…

Thanks Liz. To wrap up today's call, I would like to reemphasize that our focus is on pursuing value added growth opportunities and unlocking the potential that exists across our Etame assets. As we have said before, our flagship asset Etame was originally forecasted to produce 30 million barrels of oil. However, after several new discoveries and expansion programs, we have recovered over three times that amount already. We believe Etame have significant upside potential remaining and our expanded offshore infrastructure provides a solid foundation for future growth. We have identified 21 low risk development and step-out drilling opportunities, representing an estimated total of over 65 million barrels of gross un-risked recoverable contingent resources. We have also identified several additional drilling opportunities with a higher risk profile that can be examined and potentially derisk in a more stable and higher pricing environment. As an example of the potential that exists on our acreage, we have identified low risk development opportunities in the Southeast Etame field where we drilled the Southeast Etame 2-H well in July 2015. This well came online at an initial rate of 3,400 gross barrels of oil per day, higher than our initial forecast and has produced over 1.4 million barrels of oil in its first 16 months and continues to produce approximately 3,200 gross barrels of oil per day. We will continue to evaluate all of the opportunities in our inventory Etame and make our decisions based on the economic merits of each individual project in the current environment. We have controlled our capital spending in 2016 and we expected to be less than $1 million for the full year having already spent the majority on facility enhancements. While we have not finalized the 2017 capital program with our partners and the Gabon government, we do have several low risk development wells we can drill with solid returns in this price environment. We will monitor oil price expectations and our balance sheet over the coming months to determine when the appropriate time will be to being our next drilling program. We will also continue to look for additional discovered resource opportunities in shallow water offshore West Africa and similar areas internationally where we can leverage our technical expertise. In summary, with the recent strategic steps we have taken and our commitment to safely achieving strong production results and lowering our overall cost structure, we believe we are doing the right thing to benefit our shareholders in this low oil price environment. Thank you. And with that, operator we are ready to take questions.

[Operator Instructions] We have a question from Matt Dane.

Hello Matt.

Hi. How are you doing?

Doing well. How are you?

Good. I was curious, you mentioned that the closing of the Angola office would save some significant G&A. I was hoping you can qualify that or quantify that to an extent and share with as how much that may be?

Sure. We sure can. Once we get the office closed and we fully exited Angola, we're expecting around $0.5 a year in G&A savings.

Okay. I appreciate it.

Let me add to that. If you look in our – once you had a chance to look at the 10-Q, there is a footnote disclosure on the discontinued operation and it will break out and give some details on what in that number, including a breakout at the G&A costs that were incurred and it will give you comparable to all the prior year periods.

Okay. Great. Thanks. I appreciate it.

You're welcome, Matt.

[Operator Instructions] And there are no additional questions.

All right. Well, with that I'd like to say we appreciate everyone participating in the call today. Thank you. Goodbye.

This concludes today's conference call. You may now disconnect.