Thank you for standing by. This is the conference operator. Welcome to the Evolution Petroleum Corporation Fiscal Year End 2018 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to David Joe, Chief Financial Officer. Please go ahead.

Good morning, and welcome to Evolution Petroleum's earnings call for our fiscal year ended June 30, 2018 and our fiscal fourth quarter. We will be discussing operating and financial results for the year and the quarter. I am David Joe, CFO for Evolution and joining me on the call today is Robert Herlin, Chairman of the Board and Interim CEO; and Steve Hicks, Senior Vice President of Engineering and Business Development. If you wish to listen to a replay of today's call, it will be available shortly by going to the company's website. We have recorded replay until September 14, 2018. Please note, that any statements and information provided today are time-sensitive and may not be accurate at a later date. Our discussions today will contain forward-looking statements of management's beliefs and assumptions based on currently available information. These forward-looking statements are subject to risks and uncertainties that are listed and described in our filings with the SEC. Actual results may differ materially from those expected. Since detailed numbers are readily available to everyone in yesterday's news release, this call will focus on key highlights, operations and update on Delhi and plans for fiscal 2019. I am now going to turn the call over to Bob Herlin.

Thanks, David. Good morning to everyone and thank you for joining us today. We are pleased to report that Evolution had a good quarter and a good fiscal year for performance of our shareholders. I'm particularly pleased that we were able to increase the dividend rate by 43% during the year to $0.40 per share annually. Evolution is one of the few companies in our industry that have generated earnings for seven consecutive years including the very low price period from 2015 through 2017. The tax legislation last year has allowed us to become even more efficient vehicle for converting oil and gas reserves into shareholder dividends. Our commitment to primary focus on shareholders has remained consistent and we [gave guides][ph] to Board of Directors, management staff. After David runs through our financials, I'll speak briefly about our future efforts. David?

Thanks, Bob. So our highlights for our fourth fiscal quarter; I won't per say rehash the Delhi production and prices since they were pre-released and disclosed in August 15 press release and again in yesterday's full year results press release. Overall, though total production at Delhi was up 5% from the prior quarter, this is despite production being impacted by reduced volumes of purchased CO2 in the quarter due to strategically reduced injections near wells being drilled as part of the infill drilling program. This trend continued into July but we expect August purchase volumes to return to normal levels. The company followed up an excellent fiscal third quarter with even a better fourth quarter improving on all financial metrics. We recorded net income of $4.5 million versus $3.1 million in the prior quarter. We generated revenues of $11.4 million versus $10.2 million in the prior quarter. This was based on a realized oil price of $67.41, the highest quarterly average price since December of '14 which also represents the 6% increase to prior quarter and a 45% increase to the year ago quarter. We improved operating margins to $5.2 million versus $3.7 million in the prior quarter; this was largely due to lower CO2 purchase costs by roughly $0.5 million due to the lower volumes I mentioned earlier. We recorded earnings per share of $0.14 in the quarter compared to $0.09 in the previous quarter. The infill drilling program is progressing on-schedule and as planned at the end of the quarter, June 30, there were four wells online, all 12 wells have since been drilled as of the end of August with only a few completions remaining. In our fiscal fourth quarter, our capital expenditures were relatively modest at $3.1 million for Delhi, the majority of which was for…

Thanks, David. As we've discussed in the past calls over the last year, Evolution is actively seeking to acquire additional long-life producing reserves that will provide diversity and support and grow our dividend. This effort is very disciplined, we will not take any undue risk or excessive leverage, we're only going to pursue those opportunities that fit our criteria very carefully. With our cash resource and untapped credit line we’re uniquely positioned to pursue other opportunities. [Indiscernible] I'm the Interim CEO, we are in the process of looking for a new CEO, it will be someone who follows along this philosophy that the Board has set out. With that we'll take questions. Operator, you can go ahead and open the line for questions.

[Operator Instructions] Our first question comes from Jeff Grampp of Northland Capital Markets.

I was curious, I know there was some noise in the last quarter on the CO2 front on the purchases there, do you guys have any sense of how we should think about that going forward and maybe the gives and takes and fluctuations that may go on as the infill drilling program kind of wraps up?

Sure. The CO2 purchases were down because injections were down. You don't want to inject CO2 in and around the area where you're drilling a new well. With the drilling operations completed, that limitation is gone and so we can -- and the operator is increasing injections and therefore purchase is back up again. In fact, the infill program includes four injector wells and so we expect to see a slight increase in CO2 purchases over the next couple of quarters. As we get into Phase-V development which we think [indiscernible] sometime next year to -- that actually could ramp up purchases even a little bit more because that will obviously include a few more injectors, it's not -- just to be more about 8 or 10 more. So long-term -- I shouldn’t say long-term, medium-term over a couple of years we should actually see a small increase in purchases and over time that will decrease.

Okay, got it that’s really helpful. And that kind of segues into my next question into my next question on test site 5. Do you have kind of what the CapEx is net to you guys for what that program runs? And then, I guess kind of, if you dove-tail that into a broader conversation on the dividend and how you guys maybe think about potentially further increasing that and how the CapEx needs of Test Site 5 or anything else may impact that decision making process?

Sure. Steve Hicks, our Senior VP of Engineering has the specific numbers. So correct me if I'm wrong Steve, but I think the gross Test Site 5 program which is all of the remaining [pod] [ph] CapEx, isn't that $40 million or $50 million gross and our share that is roughly slightly less than a quarter. Is that about right, Steve?

That's about right. Absolutely, $11 million to $12 million, that is what we're forecasting and it's a small percentage of the cash flow over the next few years. So I don't see any issues at all with the dividend.

Yes, our dividend is still running along with our philosophy of paying out roughly half of our free cash flow. Obviously, we have plenty of excess cash flow to take care of the Test Site 5 of our Phase-V development in any conformance work going forward, we -- in our reserve what we actually do have maintenance CapEx every year for minor items conformance and so forth. Longer term in terms of the dividend, obviously our intent is to reinvest portion of the cash flow into new properties, to the extent that we don't do that we'll be billing cash and at some point that cash will return to shareholders, whether be in a special dividend or increased dividend, ideally what I'd like to do is make sure that the standard base dividend that we payout is something that we can live with for a long period of time. And so in terms of excess cash down the road that we might be dealing with that would be probably in the form of a stock buyback or it would be in the form of special dividends. Ideally, I'd like to have increases in the dividends tagged to increases in our asset base but that's something that the Board can easily change its mind on each year.

And then, last one for me, just more of a housekeeping on the modeling side, maybe for David. Any expectations as far as how we should be thinking about cash income taxes going forward?

Yes, basically 21% Jeff, we've pretty much used up all of our prior credits to-date. So it's pretty safe to model at 21% which is the statutory rate -- federally accepted statutory rate for corporations.

So basically, we -- so we do get a depletion of reduction I don’t know we have for first 1,000 barrels a day?

We do but it is limited but on a conservative basis.

So vast majority cash income tax fair going forward?

Yes, unfortunately on a go-forward basis for Evolution, yes, over the past few years we've had offseting credits.

[Operator Instructions] This concludes the question-and-answer session. I'd like to turn the conference back over to Mr. Joe for any closing remarks.

Thanks everybody for your participation on this Friday, and if you guys have any questions feel free to contact myself or the management team. Again, have a great weekend.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.