Ladies and gentlemen. Thank you for standing by and welcome to the VAALCO Energy First Quarter 2015 Earnings Report. For the conference, all the participants are in a listen-only mode. There will be an opportunity for your questions. Instructions will be given at that time. [Operator Instructions] And as a reminder, today's call is being recorded. I will turn the conference now to Chief Financial Officer, Mr. Greg Hullinger. Please go ahead.

Thank you, John and good morning everyone. Thank you for joining us on our call today to review the company's first quarter 2015 operating and financial performance. After I cover the forward looking statements narrative, Steve Guidry, VAALCO Energy's Chairman of the Board and Chief Executive Officer will provide an update on our operations in West Africa and a high level summary of the financials. Following Steve's comment, I'll provide a more in-depth financial review and provide an update to our 2015 guidance. And then Russell Scheirman, the company's President and Chief Operating Officer will provide a review of our operations in Gabon, Angola and Equatorial Guinea. Following all three presentations, we will be pleased to answer any questions you may have. With that, let me proceed with our forward-looking statements guidance. 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, prospect evaluations, negotiations with governments and third parties, reserve growth and other operations. Statements made during this conference call that address activity, events or developments that VAALCO expects, believe or anticipate, 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 it believes 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 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 titled Forward Looking Statements and in the reports we filed with the Securities and Exchange Commission, notably the 2014 Form 10-K filed with the Commission on March 16 of this year. Please note that this conference call is being recorded. Having provided you with our forward-looking statement guidance, I'll now turn the meeting to Steve Guidry. Steve?

Good morning, everyone. And welcome to our first quarter 2015 earnings conference call. I'll begin the key highlights of the quarter as well as some additional developments that occurred since March 31. From an operational standpoint we had a good quarter. We successfully drilled and completed the Etame 10-H and Etame 12-H wells from our new Etame platform offshore Gabon. The 10-H well went online in February while the 12-H began producing in April. Together both well are currently producing about 4,600 BOPD which is exceeding our expectations. While we were disappointed that we encountered H2S in the essential 8-H well, we are very pleased that these two well are producing above where we had initially estimated we would be with the first three wells. With additional testing last month we reconfirmed that the 8-H will produce significant amounts of H2S so we have return that well to the shut-in status while we find a long-term solution for handling this sour crude in the Etame field. Those two new wells increased our Gabon production capacity from 30% above where we were in the fourth quarter of 2014. This is importantly the wells confirmed our hypothesis of an un-drained lower lobe of the Gama reservoir in the Etame 1B-4 block which is estimated to have some 25 million barrels of gross oil in place. Russ will review the status of our development program at Etame in more detail shortly. But we assist mobilize the Transocean Constellation II rig to our second new platform at the Southeast Etame/North Tchibala fields to commence our development drilling program there. The first well was started in April and its target is the Gamba formation in the Southeast Etame field which we discovered in 2010. We should reach TD on that well later this month with…

Thank you, Steve. I am going to spend next few minutes providing an overview of key financial information pertaining to the first quarter of 2015 that we reported yesterday in our earnings press release and the SEC Form 10-Q. I will also be providing guidance information pertaining to the second quarter and full year 2015. As mentioned by Steve the company reported a net loss of $39.0 million, or $0.67 per diluted share for the first quarter of 2015. And as Steve mentioned that loss is largely attributable to the dry hole and non-cash leasehold costs that we expense during the quarter totaling $27.2 million relating to unsuccessful exploration well drilled on the Kindele prospect on Block 5 offshore Angola. And a $5.4 million non-cash impairment charge related to the projected oil prices at March 31, 2015 that were used in the impairment evaluation for the Etame marine block offshore Gabon. When we exclude those two items and again as Steve mentioned the net loss for the quarter would have been $6.4 million or $0.11 per diluted share. Notwithstanding the recent increase in oil prices since the end of the first quarter, on average the forward prices used in the impairment calculation were approximately $4 lower than the projected oil prices at December 31, 2014. Thus further price reduction or projection resulted in a write down at the combined Southeast Etame and North Tchibala fields. And then the third factor contributing to the reporting net loss for the quarter is fairly obviously. This is attributable to the lower realized oil sales prices. The net loss of $39 million or $0.67 per diluted share for the first quarter compared to a net loss of $7 million, or $0.12 per diluted share in first quarter of 2014. The impact of lower oil…

Thank, Greg. I'll start off with our offshore Gabon activities. Production averaged 17,000 barrels per day which is about 4,150 barrels a day net for the first quarter of 2015 which compares to 14,570 barrels per day or 3,500 barrels per day net during the fourth quarter. Production increase in the first quarter due to a wire lining invention that repaired the tubing leak in the Ebouri 2-H well in December of last year and the addition of the 10-H well in February of 2015. The 10-H was successfully drilled and completed in to the Gamba sandstone in the southern portion of the Etame field and came online with about 3,000 barrels per day. As Steve mentioned earlier the 10-H is going to step up four blocks in the main portion of the field and was drilled into the lower Gamba lobe which is pressure separated from the upper lobe. And lower lobe has not experienced water influx to the extent seen in the upper lobe and therefore the well was initially completed wire free and continuous to perform in line with our reservoir model in project. We followed on with the second lower lobe Gamba completion in the same fall block the Etame 12-H well which we placed on production in April and that well is currently producing over 2,000 barrels of oil per day from the lower lobe Gamba. After this well we moved to this Southeast Etame/North Tchibala or SEENT platform to drill well into the Southeast Etame Gamba discovery and into the North Tchibala Dentale reservoir. We are currently drilling into the Southeast Etame Gama structure .In addition to the drilling activity we utilize the rig performed two work over at Avouma platform, the Avouma 3-H well has been offline since August of last year with…

Okay. Well, thanks Russ and before we take questions I wanted to take a few minutes to recognize Russ for his 24 years of dedicated service to VAALCO. As we have recently announced Russ has decided to retire from the company and the Board of Directors following this year's annual meeting which is on June 3rd. And Russ has made some very significant contributions to VAALCO and to the company's long-term success. Since he initially joined back in 1991 when he was the company's CFO. He has made President in 1992 and was subsequently named the Chief Operating Officer in 2008. He held that position since then and of course he has been integral member of the management team as well as the Board of Directors. We all will certainly miss working with Russ. We wish him and his family the very best in retirement. And we will continue to have access to Russ. He will continue to work in an advisory role for us through end of 2015. So we will have access to Russ' 24 years of institutional knowledge of our assets. On the related note our search for new Chief Operating Officer is in the advance stages and we would hope to be in a position to be able to announce something in the very near future. So to close out what you heard this morning I would just say that we are encouraged by the recent rise in rate pricing which we think is very timely as we had new production over the coming months. However, we will continue to find ways to reduce our operating cost and reduce our overhead in order to position ourselves in the good position regardless of how long that commodity price downturn might last. I remain excited about the long-term growth prospects that we have with VAALCO. And while we are going to proceed as measure paced with the project that you and Russ talked about in EG and in onshore Gabon. We certainly feel that we wanted to be prudent in the way we approach those projects, be mindful of the forward cost curve, and be mindful of the capital cost so that we can ensure that we maximize returns when we move forward on these projects. So with that I think we will turn it over to back to the moderator and doing Q&A.

[Operator Instructions] And we will go to line Leo Marina with RBC Capital Markets. Please go ahead.

Hey, guys. I was hoping you could talk a little bit more about what you may have seen early on in your seismic interpretation in Angola. And you guys mentioned that you got a number of pre-salt and post-salt structures. Any sort of quantification you can kind of put on any of that? Just in terms of size of some of those structures you might think you have and these are somewhat guesstimate but anything you offer would be helpful.

Yes, thanks for that Leo. This is Steve. A couple of things about the work that we've done to this point. We see over 20 leases combing post-salt and pre-salt in our early analysis of the reprocess seismic. The pre-salt opportunities that we see has very interesting character in that they seemed they are large structure grate over the basement highs a very similar geology that Cobalt Cs and Block 20 and 21, we are still at a point where we are looking to size those and get some idea of what -- how much closer might be there and so we don't really have any kind of volume just to share but we are very encouraged by what we see in the south and west portion of Block 5 as it relates to the pre-salt opportunity. And same with the post-salt. The seismic survey did allow us to get a better sense of number of the post-salt lease on the block as well and so we are encouraged by what we see there. But pre-salt there is obviously -- the opportunity they get to us most excited and as we pointed out, we are not -- we have some time yet to continue to understand that pre-salt. We don't see ourselves spreading a well until late 2016 at the earliest. And I will also say that we had a number of companies come to us interested in the block as well. And one of the things that we will do is decided exactly what our overall position is in Block 5 going forward and how much of the future of exploration commitment we wanted to maintain. So that's an option for us as to potentially found on that block as well.

Okay. That's helpful. Just moving over to CapEx, Steve, you talked about much lower budget in 2016, could you may be speak even if it is high level to kind of what type of activities you might see in 2016 and why you think the budget is going to be lot lower? I mean will there be any potential for Etame development next year maybe just talk through some of the things you might try to do. And when you lot lower are you talking about half the budget this year, any guidance you would have will be helpful.

Yes. If we even we pull the trigger on the Mutamba or Block P right now, most of them spends would be as early as the 2017 spend and we may long lead in 2016 but it would be something that would be out in time. And we are not on the verge of pulling a trigger right on Mutamba or Block P. So that alone says that 2016 will have some fairly bold CapEx as it relates to those projects. In Etame, we potentially could see some additional development there. I think it is going to depend largely on how our six well programs perform. If whether we continue the program or looks for opportunities to drill more development work. So that's a bit uncertain. I don't see it's having another six well development program at Etame in 2016. But we might have something there. And then from an exploration standpoint as we said earlier, late 2016 would likely be the earliest we would spread a well in Angola. So maybe we see a partial well in Angola.

All right. That's helpful. I guess just quick question for Greg here on the G&guidance for the year $12.5 million to $15 million. That includes your non-cash stock compensation in those numbers.

It does.

Our next question is from Bill Dezellem with Tieton Capital Management. Please go ahead.

Thank you. Actually I'd like to follow up on your last comment relative to Etame. What are your thoughts on additional drilling as once you are ready to spread up from your current platform?

We are formulating those thoughts now. We had, Russ mentioned that we are working through this update of our long term strategic plan at Etame. And we work closely with our partners to establish just what that might be. We are really not in a position yet to really identify exactly what that additional development drilling might look like. But for sure we are finished the six well that are in the initial program, may be there might be a seven but beyond that we need to settle on that with our partners here in the coming months.

And is it correct that those platforms do have space for additional well?

Yes. They do. The two platforms we set both H platforms, and so they have capacity to accommodate additional wells and currently we have three wells on Etame and we program as it stands right now calls for three wells at the SEENT platform. So we have an ample platform capacity in that regard.

Right, okay, thank you. And then relative to the Southeast Etame well that you referenced in the press release, it was drilled in 2010. Is it that well that you will rent or soon to be completing and as a result you almost a guarantee production because there was six best full well?

Yes. We are actually using the exploration well as our pilot well if you will. So we are planning on lending the development well that we are drilling now right in the vicinity of where the exploration well was drilled so that we know where the Gamba is so that we hit -- because we hit in a high angle and you need to know where it is so you don't over shoot or under shoot. So we are using that as our guidance and that well should be on production in June.

Okay. So you are actually re-drilling to that location rather than actually been able to complete that exploration well from 2010?

That's right. Because the exploration well was open water well and we didn't set the platform over where that well is located. It had been abandoned at that time we made discovery and did the side tracks.

Our next question is from Eric Anderson with Hartford. Please go ahead.

Hi, just want to follow up a little bit, it seems to me that company given your size is got really more on your plate than you can handle it on your own, if you don't want to really levered up the balance sheet. And so following up on the comment about maybe partners in Angola, would the same be true in Equatorial Guinea and other areas where you got some exciting prospects but maybe they are capital intensive?

I think the way I would response to that Eric is that we are always looking for alternative ways to raise fund or participate in certain projects. Angola comes -- I mentioned Angola specifically because over 50% paying interest there and the wells are going to be expensive. And so further to your point it takes a quite balance sheet to be able to support the wells in Angola. And so that's one of the thought we had. The other project for example Block P, we are only there with just 31% interest. So we left the exposure there and to the extent that the spend is related to a development, yes budget funding option available to you, it is a fund development that you wouldn't have to drill exploration well and so that's also part of the consideration. But we are always looking at our portfolio and asking ourselves a question, how much of that should we own and what's the current market to be able to bring others in. Ideally bring others into have them promoted and carryout some of part of the cost which is -- that's the ultimate objective.

Now if you were to do that Angola, would you remain the operator or would you have to possible give that up?

That's not been decided. That -- there is a lot of factors that have to be brought in. A new participant, the government has lot of things that we have to decide there, our intent is to remain as operator.

You have question from Joe Pratt with Stifel. Please go ahead.

Hi, good morning, Steve. I was just wondering if the SIBC report March 17, page 6 were say that average production in 2012 was 4,998 and that goes down 2,439 to and then 3,806, this year's projecting 4,825, but if you are at 46 now and you are going to pick up three sand wells and let's say they each average 500 could you exit the year at 6,100?

Yes. The math you -- I hadn't to think about the check the math you did, but I think the point is you have to consider a number of things. One is there is natural decline occurring in the field, the whole all year along. So we can't just add the increments and end up with the total number at the end of the year, because you are offsetting natural decline. Then they have issues there operational issues, we just recognized pump -- some pump issues like a Avouma platform that we have to dealt with, reducing the overall net rate for the year. So that also a consideration. And I think when we talk about -- because you only 500 barrels a day example but I think we wanted to be conservative in terms of what we think the remaining development wells might contribute. Because there is some uncertainty. We've talked about that before at Dentale. We -- I said in the comment that this will be our first Dentale production although Dentale is produced onshore Gabon. There is some degree of uncertainty around that so we were trying to be conservative in terms of how those wells might perform so.

And onshore at rate of those wells produced? And really is that -- any indication of what the rate could be of your SEENT platform?

Yes. You would have to look at what the wells producing. Surely this field is a much older field. That has been online; I don't have the number in front of me what they are currently producing. I don't have what they initially produced either but it is apples-and-apples in terms of the quality of the reservoir. It is apples not just in terms of the current state because the onshore fields are more mature.

And lastly you don't stroll out for say an EBITDA number but I am looking at this March 17, RBC report which is very well written and it appears to come up about $30 million in EBITDA for the year assuming $52 or $0.57 per end. And given the range about 65 and production might be a little higher I mean is $40 million in EBITDA reasonable estimate? Yes. Assuming the price stays flat.

No. EBITDA is not a number that we generally publish, you are right and so maybe this is something that we can talk about offline. We aren't going to publish an EBITDA number but there are too many variables. I mean there is -- if you look at its range we are getting for things like OpEx and production and you can get pretty wide range to what your EBITDA will be. So that's just not -- we choose not to provide guidance on.

[Operator Instructions] And to the presenters there are no further questions coming in.

Okay. Well, we want to thank everyone for your interest this morning. And your continued support of VAALCO. And again I want to thank Russ for his 24 years of service. This will be his last conference call. So next time he will on the other end of line listening I am sure. So thank you very much.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.