Good day, and welcome to the Contango's Results for the Second Quarter 2015 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Joe Grady. Please go ahead, sir.

Thank you. I'd like to welcome everyone to Contango's earnings call for the quarter ended June 30, 2015. On the call today are myself, Allan Keel, our President and CEO; Steve Mengle, our VP of Engineering; Tommy Atkins, our VP of Exploration; and Carl Isaac, our VP of Operations. I’ll give you an overview of the financial results and then you’ll hear comments on our operations from Allen Keel and he will turn it back then to Q&A after Allen's comments. It is typical for most companies and our presidents, we will limit our questions to those from analysts who follow our stock closely. As we believe that is the most constructive and productive years of everyone's time. But before we begin, I want to remind everyone that the earnings release and the related discussion this morning may contain forward-looking statements as defined by the Securities and Exchange Commission, which may include comments and assumptions concerning Contango's strategic plans, expectations and objectives for future operations. Such statements are based on assumptions we believe to be appropriate under circumstances, however, those statements are just estimates, are not guarantees of future performance or results and therefore should be considered in that context. Under the financial results we reported a net loss of $19.5 million for the quarter or $1.3 per basic diluted share compared to net income of $4.6 million or $0.24 per share for the prior year quarter. Contributing to this variance were lower revenues resulting from lower prices and production in the current period, offset impart by lower operating expenses in G&A and lower exploration expenses, each of which I’ll touch on briefly in a few minutes. Adjusted EBITDAX as we defined in our release was approximately $19.9 million or $1.5 per basic share for the current quarter compared to…

Thanks Joe, and good morning to everyone and thank you for being with us today. I'd like to share a few highlights with you this morning about the progress we've made on a number of strategic goals we’ve set for ourselves at the beginning of the year. And very useful to elaborate on some of the related results mentioned in our release. From a general perspective, as we specified at the beginning of the year, our priorities for 2015 in this low and uncertain commodity price environment would be warned to preserve our excellent financial condition including staying within cash flow on our CapEx program. Two, to focus our drilling efforts on strategic projects that would enhance our portfolio and position us to quickly increase capital activity when process improve and or costs decline. Three, to focus on reducing cost in each and every aspect of our business and four, where possible do so prudently take advantage of stress or distressed acquisition opportunities in the market. We believe that attaining these goals should provide a foundation for meaningful future value for appreciation for all shareholders. Contango employees included as the industry rebalance. We feel pretty good about the progress we’ve made this year towards these goals. Specifically, we have preserved our financial condition by staying within the plan and schedule we set at the beginning of the year. While our debt level is higher than it was the year end, the increase was not unexpected due to the front end loaded CapEx program and expected decrease in working capital that typically occurs as capital activity slows down. As Joe mentioned, our year-end financial profile is expected to be as good or little better than it is today. Regarding our strategic project efforts, we feel very encourage by the initial results…

[Operator Instructions] And our first question comes from Kyle Rhodes with RBC. Please go ahead sir.

Hi, good morning guys. I know it's still a bit early for this, but I was just kind of curious of the types of sensitivities you are looking at with regards to a 2016 operating plan. Is spending within cash flow is still kind of the key priority for next year at this point in time?

Yes Kyle, there will be a priority for us it is early we’ll normally start this process in September, October, and this year won’t be any different. And to a large extent what we do in 2016 will be a function of prices as well as results that we see in the areas that we’re active in right now. So it is a bit early but we’ll be moving in that direction in another month or two.

That make sense. And I guess anything in the way of obligation wells required to hold equity in 2016?

We don't have any issues that we can't manage through lease extensions or strategic drilling that would be incorporated in our budget. So we don't feel like we’re exposed lose anything with the reduced capital budget. For instance in Wyoming, we have the ability to exercise three to five extensions on that equity. So, if the price environment doesn't - isn't to encourage us to drill, then we'll handle it through extensions.

Makes sense. And I guess just in Wyoming, maybe you guys give us more color on anything potential thing you might doing differently on your upcoming one to two wells given what you saw on the first, any changes to frack job, are you going to put on, just kind curious of your thoughts and plans for those next year wells.

I'll let Carl, handle it.

Good morning. As far as our efforts in Western County, Wyoming, I think we did learn a few lessons with our first well mostly related to GOR. We started out lifting the initial well with gas and are planning to lift up with gas and realize that the GOR is not going to support that. We moved to hydraulic pump and the interim period while we got our right pumps equipment ready. That equipment is actually being installed today. So we have a good feel for the performance and are optimum setup going forward. As far as the drilling and completion of the initial well in Western County goes, we'll do the same thing that we've done in the other place that we've entered over the last four five years, in terms of optimizing based on lessons learned and putting ourselves in the best position to succeed. One of the thing that we definitely have a strong appreciation is the weather and we're looking forward to getting out there while the weather hasn't deteriorated and getting a well or two drilled in the near future. Frack design, we're still looking at alternatives but we're pretty comfortable from our key standpoint and looking at things particularly from the shape of a curve standpoint as it relates to completion. It's very, very early. And a lot of that will be informed by how we see our well perform. Our first well performed, we get it on rock next week or so.

Got it. And have you guys picked out a location kind of for that second well?

We do have multiple locations picked and we have specific location picked for the second well, and generally speaking, from a planning standpoint, we're approaching this project planning for and but in Wyoming, if you want to wait till you think you want to drove well, you're probably going to six to nine months, if not longer before you can actually learn drill it. So, we're trying to fit ourselves in a position to do exactly what Allan said, which is if we see a commodity price for February, we'll be ready to respond rather quickly with permits in hand in 2016 to go out and pursue successful development plan.

Got it. Thanks for the time, guys.

And from SunTrust, we’ll take Neal Dingmann. Please go ahead sir.

Hi, good morning, guys. The success you've seen in the muddy, I guess I'm just looking for slides, I saw the Elliot being kind of in that southeast corner, as you come back and start developing in that, how do you kind of what's your plan to attack there?

I think what we'll do Neil is we'll, we're going to drill this next two wells, get the results in those two wells, produce them for a while and see what the results are - see how it looks and then from there make our plan. As Carl, just mentioned we are planning for success, permitting multiple locations, so it's really, we've got to find the entire recipe not just the completion but permitting and building locations and determining what the overall scope of this project is. We plan to drill two more wells before the end of the year, put those online, as Carl just mentioned, try some different things with our frac mythology and then just see how the completions work. And then we'll take it from there.

Got it. And the I guess just lastly, how do we think just from the offshore standpoint, I assume no new - any thoughts of coming back to in any type of recompletion anything to think of there and if not just do we just kind of assume the same kind of typical depletion we've seen there?

Yes, we're not planning on - certainly we're not planning on doing any drilling out there but we do a work over not too long ago, Carl, you may just want to reference that quickly.

We had an issue with well producing sand in North Cheyenne, and we went to sand operation and successfully – wells back online. We got an incremental production gain out of it, so that was something I would put in the category of maintenance or road for compliance based on the sand that the world is making prior to the work over.

Makes sense. Thanks guys.

And next we'll take Sameer Uplenchwar from GMP Securities.

Good morning, guys. You had about $4.5 billion on lease acquisition in Q1. Was that all in one area or whether its' spread out across. Could you give us some color on that?

Sameer, most of that was related to our Wyoming flights.

Got it, okay.

Elm Hill.

And sorry and then I'm just trying to understand like you were when we had like earlier you had said that the idea was coming into the share that you wanted use a strong balance sheet to get into an onshore play, get an anchor asset kind of and build around it. So you have the Gulf of Mexico cash flow reinvested onshore so you get the long-term visibility everything else but the bid ask spread was wide in the first half. Could you give us more clarity like what you’re seeing with the fall redetermination with the fall in the commodity pricing. How that has changed and then if you’re looking onshore where all you’re looking onshore oil versus gas agnostic location wise just some color on that?

When we started the year we were cautiously optimistic. We over time stressed or distressed situation where we could use our financial strength to add something to our portfolio. But because the reasons that Allan articulated it didn’t happen but we looked at lot of deals. We’re still looking at deals. We think that there might similar opportunities and a better chance of finding one that we can do in latter half of the year, prices stay low the banking regulators are more active in reviewing loans. And companies hedges start to fall off and there are lot of things you could contribute to and increase amount of deals that they get done. So we're still out there looking. We’re looking in higher areas of current focus. We’re looking in areas that could become an another area concentration for us. We’re not looking too for north, it’s mostly down sort in our area and we'll just see how it goes as it relates to a borrowing based redetermination we don’t do that until November. So a lot can happen price wise between now and November. Price will have a dramatic impact on where we end up, I guess the way I would answer that as I don’t know now, but I can’t imagine that if there is any changes going to have any meaningful impact on our liquidity. And as it relates to be able to carry out our capital program or any aspect of our operations.

Yes Sameer, I would add that, with our Wyoming project that we’re focused on that, we think that could be a game changer for us for the company. And we’re going to drill two more wells later this year and see how those results come out. And then in terms of just managing our balance sheet, we feel like and we have felt since the end last year that increasing our CapEx or trying to get production growth in this commodity price environment just does make lot of sense. We think there are lot of other companies that are envious of our financial position. So we’re going to continue to wait and see what happens with the market and try to take advantage of the opportunities when they come available.

Perfect. Thank you.

And our next question comes from Ron Mills with Johnson Rice & Company. Please go ahead.

Good morning, Allen. Just one follow-up on Sameer's question in terms of - given your balance sheet is there any particular appetite that you would have in terms of acquisition size or how would you approach it from that standpoint to make sure you continue to have that differentiated balance sheet?

Well I think what we would have to do is we have to find an opportunity that just within our operational area or something similar to operational footprint and then be able to make sure that cost - lowering out that where we can go out and pursue drilling activity in that certain area. It’s difficult to - in the past been difficult to buy or acquire anything without having a very active drilling program. But it’s going to be cost driven, as well as fast driven, but I would say that it was - we’ll continue to look in and around the areas where we’re active because that’s where we think we can bring the most of the table in terms of economies of scale.

Okay, good. And I may have missed some of your comments on the muddy in terms of the inconsistent first quarter pressure et cetera. In terms of the right lift in your opinion, may this is for Carl, is that really something that can fix.

Ron, speak up a little louder please.

I guess what I was asking was on in the muddy give that well performance, have you seen this before, is the right lift - is it likely to kind of fix that reservoir pressure, inconsistencies and then the second one up there Carl. What are you looking for out of the next one or two wells. You're obviously planning for success, so, are there some boogies to - that you want to hit before, to go full steam ahead next year?

If I understand your question based on the Elm Hill well things that we're concerned about in terms of the reservoir and - I guess I would respond as - the unit that we're installing how the capacity of over 700 barrels of fluid a day, if that gives you any kind of idea in terms of how we're getting rigged up to defend or support the decline curve that we've modeled. So, as far as boogies, I think it was boogies, I don't know we were born up long her to seeing them yet. The only thing that that was in line was the low GOR. But most of you will be happy to have more oil and gas.

The question was on the next two wells. Are there any, what are you looking for out those next two wells to continue along your - and execute on your full development plans for next year - boogies may have been a bad word.

Right. Speaking for the change you guys, in here I think we're looking delineation of the formation and performance of the wells that support the same decline curve that I referred to a minute ago.

Okay, great. And then Allan just strategically if you look ahead to next year obviously, if you paint the picture today you would have full development program in the muddy and then would Elm Hill probably be the second area or where would the buying fit in there in terms of just strategically given your current asset base.

Yes, I would say that behind the Wyoming project, Madison and Grimes would continue to be top of our list not to discount Elm Hill but we still have a lot to do in Madison and Grimes, we waited a little bit on the development of the Eagle Ford that we think in this commodity price environment certainly don't make sense to try to develop that this year but if we get any kind of encouragement whether be cost reductions or price improvement, we would probably go back out there, we got chalked down, we have multiple locations we could go through and then like I said Eagle Ford. Elm Hill is continuing to develop, we feel very confident with some of the things that we've seen yet out there but we've just had some mechanical issues, these couple of wells last wells that we've drilled. And that would be the kind of the bad in order as I would say it today.

Great, all right. Thank you, guys.

And this time there are no further questions in our queue. I'd like to turn the conference over to Allan Keel for closing and additional remarks.

Well, thanks everybody joining our call today. I hope it was informative to everyone and we look forward to updating you as we progress throughout the year. So, thanks again for your participation.

Ladies and gentlemen that does conclude today's conference and we appreciate everyone's participation.