I would like to welcome everyone to the VAALCO Energy Fourth 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] And now at this time, I would like to turn today's program over to Liz Prochnow, Chief Accounting Officer. Please go ahead.

Thanks, Carmen. And on behalf of the management team, I welcome all of you to today's conference call to review VAALCO's fourth quarter 2016 operating and financial performance. After I cover the forward-looking statements, Cary Bounds, our chief executive officer will review key highlights of the fourth quarter, along with operational results and year end reserves. I will then provide a more in-depth financial review and 2017 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 and 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 to 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, proposed 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 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 2016 Form 10-K 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 fourth quarter 2016 earnings conference call. Let me begin by thanking all our employees who work diligently during the year to ensure that we continued to operate safely, optimize production and reduce operating and general and administrative costs. In 2016 VAALCO faced some significant challenges, but throughout the year we met those challenges head on and we were able to achieve a very meaningful results. These results demonstrate our commitment to executing the company strategy and have allowed us to build a foundation of sustainable financial strength. First and foremost is safety, as a leading operator in Gabon it is our responsibility to operate in a safe and environmentally responsible manner, and we at VAALCO are proud to announce that we did not have a recordable incident in 2016. We also continually look to innovate and drive down costs. This is evident with our most recent workovers utilizing the hydraulic workover unit versus the traditional and more costly method of mobilizing a drilling rig. These two workover allowed us to restore over 1000 barrels of oil per day of net production in our Etame Marin block offshore Gabon. We are also persistent in our pursuit of targeted acquisitions that can create value, similar to the one we closed in the fourth quarter of 2016 for the additional interest at Etame. In the year when we spent no capital drilling new wells, we were able to replace approximately 87% of our Gabon reserves through performance additions and the acquisition of an additional interest in Etame. To remove distractions and sharpen our focus, we completed the sale of our US producing properties and we discontinued our operations in Angola, which were high risk exploration prospects. Again, these actions sharpened our focus, which…

Thank you, Cary. Our fourth quarter 2016 operating income at $0.8 million compared very favorably with a loss of $64.7 million in the fourth quarter of 2015, which included a $52 million non-cash impairment charge, primarily due to lower oil prices. Fourth quarter 2016 operating income was lower than the $3.7 million in the third quarter of 2016, primarily due to workover expenses of $3.4 million reported in the fourth quarter of 2016. Fourth quarter sales totaled 326,000 net barrels compared with 457,000 net barrels in the same period a year ago and 344,000 net barrels in the third quarter of 2016. This decline in sales volumes was primarily due to the Avouma wells that were temporarily shut-in. Our realized oil price for the fourth quarter of 2016 averaged $46.62 per barrel, up 19% from $39.18 per barrel in the fourth quarter of 2015, and up 10% from $42.31 in the third quarter of 2016. Beginning with our third quarter earnings, the operating results of our Angola segment have been classified as discontinued operations in our financial statements. This was the result of our decision in September of 2016 to discontinue operations in Angola and withdraw from our production sharing agreement. Our loss from discontinued operations in the fourth quarter totaled $0.3 million. For continuing operations, we reported a loss of $3.4 million for the fourth quarter of 2016 or $0.06 per share. Our adjusted EBITDAX totaled $2.2 million. The loss from continuing operations includes a non-cash mark-to-market charge related to our Put contracts of $0.9 million. To limit our commodity price risk and protect our cash flow, we entered into additional Put contracts in the fourth quarter on 792,000 barrels of anticipated oil sales from the period January through December 2017 at a weighted average price of $48.46 per…

Thanks, Liz. To wrap up today's call, I would like to discuss 2017 and VAALCO's focus moving forward. As we look to 2017, it should be very clear that our focus is Gabon in West Africa implementing a strategy that leverages our technical and operational expertise, as well as our operational infrastructure. This positions VAALCO to efficiently develop our Gabon assets and provides the foundation for us to expand into new development opportunities in West Africa. While we continue to focus on the day-to-day operations, including maximizing production, driving down costs and operating safely, there are several key goals that should add value to our shareholders. As we have said before, our flagship asset Etame was originally forecasted to produce 30 million barrels of oil. After several new discoveries and expansion programs, we have already recovered over three times that amount and still see substantial upside potential. With this in mind, our first goal is to secure an extension on our existing license in Gabon. While the current Etame license expires in June 2021, we believe that with the recovery in oil prices and the potential for additional development drilling, the block could produce for many years beyond to 2021. Our operations team has identified several near-term economic development drilling opportunities that will utilize our current offshore infrastructure and extend the economic life and reserves at Etame. As an example of the potential that exists on our acreage, we have identified 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 3400 gross barrels of oil per day, higher than our initial forecast and has produced over 1.6 million barrels of oil in its first 18 months. Today, the well continues to produce…

[Operator Instructions] First question comes from the line of Matt Dane with Titan Capital.

Thank you. I was hoping that you could walk us through your focuses with business activities and how active conversations are currently and how we should think about the likelihood of something happening this year with that?

Sure. Thanks, Matt. I'll take that question. We are out there looking for opportunities, that like I said earlier, our technical expertise and our operational skill set, so we are looking – we are focused really in West Africa right now. We did like to leverage our operational expertise in West Africa. But we're – you know, we're opportunistic. We're looking at anything that would be accretive even if it's not in West Africa. But you know, those conversations are underway right now. We're looking at several opportunities. I can't talk about the details. But what we hope to do is land in acquisition, like I said, that fits our technical expertise and our operational expertise.

That’s helpful. Thank you, Cary.

[Operator Instructions] At this time just we have no further questions. I'll turn the call back over to management.

All right. Well, thank everyone for joining us for our teleconference call. Goodbye.

Thank you again for joining us today. This concludes today's conference. You may now disconnect.