Good morning. My name is Jennifer, and I'll be your conference operator today. At this time, I’d like to welcome everyone to VAALCO's First Quarter 2017 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. At this time, I'd like to turn the call over to Elizabeth Prochnow, Chief Accounting Officer. Ma'am, you may begin.

Thanks, operator. And on behalf of the management team, I welcome all of you to today's conference call to review VAALCO's first quarter 2017 operating and financial performance. After I cover the forward-looking statements, Cary Bounds, our Chief Executive Officer, will review key highlights of the first quarter, along with operational results. Phil Patman, our Chief Financial Officer, will then provide a more in-depth financial review. Cary will then return for some closing comments before we take your questions. During our question session, we ask that you limit your questions to one and a follow-up. I'd like to point out that we posted an updated investor deck on our Web site this morning that has additional guidance, 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 statements 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 spending 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 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 and in the reports we filed with the Securities and Exchange Commission, including the Q1 2017 Form 10-Q that was filed yesterday and the previously filed 2016 Form 10-K. 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 first quarter 2017 earnings conference call. Before I begin my comments, let me welcome Phil Patman to our Executive Management Team. Phil assumed the role of Chief Financial Officer for VAALCO a few weeks ago. Phil has over 20 years of experience in oil and gas and other areas of the energy industry, serving in key executive positions in finance, business development, and legal management. Phil brings a wealth of experience in international energy finance, and he will be a valuable addition helping VAALCO grow. I'd like to thank Elizabeth Wilkinson for her service to the Company as interim CFO over the past year and I wish her well in her future endeavors. Turning to the first quarter, we continue to enhance value by delivering solid production results and minimizing costs. We’ve restored production from the second of two Avouma platform wells, where we replaced ESPs utilizing a lower cost hydraulic workover unit versus the traditional method of mobilizing a more expensive drilling rig. Our average production for the first quarter of 4,622 barrels of oil per day net was above the high-end of our guidance range. Through our focus on cost containment, production expenses on a unit basis, excluding workovers, came in at the low-end of the guidance range. These strong operational results, coupled with improved pricing, allowed us to grow revenue and earnings significantly. In the first quarter of 2017, we reported earnings from continuing operations per share of $0.07, our highest earnings per share since the second quarter of 2014. In the same period a year-ago, we reported a loss from continuing operations of $0.26 per share and in the fourth quarter of 2016 we reported a loss from continuing operations of $0.06 per share. In the…

Thank you, Cary. Our first quarter 2017 income from continuing operations is $4.4 million or $0.07 per share. Our adjusted EBITDAX totaled $10.4 million, and operating income was $8.1 million. Our Q1 2017 income compared very favorably, with a loss of $15.4 million from continuing operations in the first quarter of 2016, primarily due to higher oil prices and increased sale volumes. First quarter sales totaled 394,000 net barrels compared with 381,000 net barrels in the same period a year-ago, and 326,000 net barrels in the fourth quarter of 2016. The increase in sales volumes was primarily due to the workovers that occurred late last year to restore production to two Avouma wells that were temporarily shutdown. Our realized oil price for the first quarter of 2017 averaged $51.99 per barrel, up 92% from $27.07 in the first quarter of 2016, and up 24% from $41.88 in the fourth quarter of 2016. Beginning with our third quarter 2016 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 2016 to discontinue operations in Angola and withdraw from our production sharing agreement. Our loss from discontinued operations in the first quarter of 2017 totaled $176,000. In order to limit VAALCO's commodity price risk, in 2016, the Company hedged its oil sales by purchasing oil puts. As of March 31, 2017, VAALCO had unexpired crude oil put contracts covering 540,000 barrels of anticipated sale volumes for the period from April 2017 to December 31, 2017, at a weighted average price of $49.63. The Company recorded a noncash mark-to-market charge of $0.2 million related to the puts during the first quarter of 2017, which was included in other net in the consolidated statements of operations. The…

Thanks, Phil. As we look to 2017 and beyond, we believe that as a team, we can add significant shareholder value through the development of our premier Etame asset, while leveraging our existing infrastructure and technical expertise to pursue attractive acquisition opportunities. 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 we will continue to look forward in the near-term. 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’ve already recovered over 3 times that amount and still see substantial upside potential at Etame. With this in mind, one of our primary goals is to secure an extension on our existing license in Gabon. We are having ongoing constructed discussions with the Gabonese government on these matters and are encouraged by the progress we are making. 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 2021. We continue to evaluate several near-term economic development drilling opportunities that will utilize our current offshore infrastructure and extend the economic life and reserves at Etame. We will monitor oil price expectations and our balance sheet over the coming months to determine when the appropriate time might be to begin our next drilling program. However, the extension of the license goes hand-in-hand with additional development opportunities, and we believe that the combined impact of both will establish a solid foundation of value creation for 2018 and beyond. Another key strategic step we’ve continued to progress forward is the divestiture of our noncore U.S. based assets and our exploration asset in Angola. We’ve discontinued our operations in Angola to focus on development opportunities in Gabon and elsewhere in West Africa. We continue to talk with Angolan officials to resolve the question of any potential costs that could be assessed for not drilling the remaining commitment wells, but there is nothing new to report at this time. We would like to settle this issue quickly and remove the $15 million liability from our balance sheet. This will strengthen our balance sheet and could potentially lead to an increase in our borrowing capacity. In early April, we closed the sale of a non-core U.S. asset, the East Poplar Unit, in Montana for cash and the transfer of the asset retirement obligations. With our focus now on increasing recoverable reserves at Etame, strengthening our balance sheet, raising capital for development projects and continuing to deliver solid operational results, VAALCO is poised to add significant value to our shareholders in 2017 and beyond. Thank you. And with that, operator, we’re ready to take questions.

[Operator Instructions] Our first question comes from the line of Kenneth Pounds with Castlebury.

Hi. Good morning, guys. Good quarter. I didn't see anything mentioned about as a result -- that there was a smaller timing issue that was reported a few months ago, has that all been resolved or …?

Kenneth, are you referring to the material weakness?

I think so. I guess, there was a -- I referred to the -- some on ground assets, that were not being characterized or something, I can't remember the exact language.

Right, right. What you are referring to is the material weakness that we had year-end 2016, and we’ve efforts underway to remediate the material weakness, and we believe that we will do that in 2017.

Okay, great. All right. Now you said that -- now was there any plans -- what would be the first well you would think about drilling next year? Are you talking about a decline, you need to start drilling again?

Yes. Like I mentioned, any drilling we do goes hand in hand with the license extension, and we're working with the government to try to have the license extension in place, so that we can begin drilling as early as next year. But right now, we do not have any firm plans with our partners or the government to start drilling operations.

Great. All right. Thank you very much.

Okay. Thank you, Kenneth.

[Operator Instructions] And your next question comes from the line of Matt Dhane with Tieton Capital Management.

Great. Thanks.

Good morning, Matt.

Good morning. How are you, Cary?

Good, good.

I wanted to talk about Etame well that is producing intermittently. How serious are the equipment issues around that, and what additional color can you add around that?

Sure. Sure. What’s happening there is the control system is malfunctioning in the variable speed drive unit that delivers the power to the down hole motor in the Etame 10-H well. We’ve rebuilt the system several times, but we don’t -- right now have a clear understanding of what is causing the failures. We’re working closely with the equipment manufacturer that’s Schlumberger to determine the root cause of the failures, but right now, that’s all I’ve to report and the investigation is ongoing. I'll say that as of today, the well is producing and we may have solved the problem, but we still have an investigation underway as to the cause of the failure in the control system, in the variable speed drive that’s on the surface.

Okay. And so, you said you may have solved the problem. How long has it been, since you’ve had the issues most recently here? Has it been a while or …?

No, it's been 2, we are -- the well has run for 2 or 3 days now. I believe it's 2 days.

Okay.

So it's early. It's too early to say we’ve solved the problem.

Oh, okay. Okay. And you spoke of some additional development work. I think more -- actually, I thought the workover you’re looking at here later in the year, what additional details can you add around that? How many are you looking at potentially, and what could be the ramification of that?

Sure. What we’ve done is we’ve -- in our guidance, we've put some contingent workover costs out in the second half of the year. And we don’t have a specific well in mind, we just have some contingent funds for workover expense out there, because we may have an ESP fail unexpectedly. So there is no firm wells that we'll workover. It's just to recognize there is the possibility that an ESP will fail and we'll have to conduct a workover.

Okay. That’s helpful. Thank you.

Thank you.

[Operator Instructions] And we’ve no other questions in queue at this time.

All right. Thank you, everyone for joining our 2017 first quarter conference call. Good bye.

Thank you for your participation. This does conclude today’s conference call, and you may now disconnect.