Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the VAALCO Fourth Quarter and Full-Year 2018 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]. I will now turn the call over to Ms. Liz Prochnow, Chief Accounting Officer. Please go ahead, Liz.

Thanks, Dennis. And on behalf of the management team, I welcome all of you to today’s conference call to review VAALCO’s fourth quarter and full-year 2018 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 and full-year, 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 questions session, we ask that you limit your questions to one and a follow-up. You can always reenter the queue with additional questions. 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 2019 guidance that should be helpful. With that, let me proceed with our forward-looking statements. During the course of this conference call, the company will be making forward-looking statements. 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, the presentation posted on our website and in the reports we file with the Securities and Exchange Commission, including the Form 10-K that we plan to file soon, but no later than March 18, 2019. 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 and full-year 2018 earnings conference call. I’m very pleased with our fourth quarter financial results and operational success. I would like to first reflect on the many accomplishments that VAALCO was able to achieve in 2018. Over the past several years, we have taken the steps necessary to transform VAALCO into a focused and financially strong company. In 2018, we operated efficiently, restored production through a successful workover program, paid off all of our debt, significantly grew our reserves and meaningfully added to our cash position. Most importantly, we secured the PSC Extension at Etame, which establishes a long-term time horizon for continued production and reserve growth in Gabon for up to 20 more years. With the PSC Extension in place, a clean balance sheet and strong quarterly results, VAALCO is now positioned to create significantly share – significant shareholder value for many years to come. Turning to operational results. Production for the fourth quarter averaged 3,717 barrels of oil per day net, which was within our guidance range, despite being impacted by a two-day field wide shutdown for normal maintenance that temporarily reduced production in the quarter by approximately 200 barrels of oil per day. For the full-year 2018, we maintained strong consistent production averaging 3,751 barrels of oil per day net. As we look at production estimates for 2019, we expect first quarter production to be in the range of 3,500 to 3,800 barrels of oil per day net, and for the full-year 2019, we are estimating production to be between 3,300 and 3,900 barrels of oil per day. I will speak to the timing of our 2019 drilling program in a minute. But as a reminder, the production impact from the new wells will not…

Thank you, Cary. Good morning, everyone. Our financial results for the fourth quarter were once again very strong. We reported income from continuing operations of $10.5 million, or $0.17 per diluted share. The quarter benefited from strong crude prices and production that was within our guidance range. These amounts included the impact from approximately $5.6 million, or $0.09 per diluted share or non-cash mark-to-market gains related to our crude oil swaps, as well as primarily non-cash gains for employee SARs of approximately $1.5 million, or $0.02 per diluted share. Adjusted income from continuing operations for the fourth quarter of 2018 totaled $19.8 million, or $0.32 per diluted share, after adding back $9.3 million in non-cash deferred income tax expense. For the full-year 2018, we reported income from continuing operations of $98.7 million, or $1.63 per diluted share. The full-year numbers included a $56.9 million, or $0.95 per diluted share non-cash deferred tax benefit and a $3.3 million, or $0.06 per diluted share non-cash benefit from the deferral of asset retirement obligations associated with the PSC Extension. Excluding these two non-cash items totaling $60.2 million, adjusted income from continuing operations for the full-year 2018 was $38.5 million, or $0.64 per diluted share. Adjusted EBITDAX for the fourth quarter was $16.9 million, which was up 6% versus the third quarter of 2018 and up over 400% from the same quarter in 2017. For the full-year 2018, VAALCO generated $56.2 million in adjusted EBITDAX, nearly double the $28.5 million we reported in 2017. Fourth quarter oil sales totaled 401,000 net barrels, compared with 280,000 net barrels in the same period a year ago and 329,000 net barrels in the third quarter of 2018. For the full-year 2018, we sold 1.4 million barrels of oil, essentially the same level as in 2017. Our realized…

Thanks, Phil. In 2018, we established a long-term time horizon for continued growth in Gabon by extending the PSC for up to 20 more years. We paid off all of our outstanding debt, successfully completed three workovers on the Avouma platform and generated $56 million in adjusted EBITDAX. We are focused on optimizing production and containing costs to grow our cash position in preparation for the 2019 drilling program. We are currently forecasting that any capital expenditures made during 2019 will be funded by cash on hand and cash flow from operations. As we continue to deliver on our guidance and strengthen our balance sheet, we remain confident in the opportunities on our Etame asset. With the PSC Extension, we have an extended runway of opportunities at Etame, where we see significant upside, which we have highlighted in our investment presentation on Slides 13 through 16. We are pursuing M&A opportunities, where we can utilize our operational expertise to maximize value creation. I’m optimistic that we will create substantial value for our shareholders by executing on our drilling program at Etame, and we believe we can repeat similar drilling programs multiple times adding reserves and production in 2019 and for many years to come. We have positioned VAALCO financially and operationally to succeed in the near-term and long-term, which will allow us to grow profitably and add meaningful value to our shareholders. Thank you. And with that, operator, we are ready to take questions.

[Operator Instructions] And your first question is from the line of Matt Dhane with Tieton Capital Management. Please go ahead.

Thank you. I want to discuss the workovers that you are considering doing here mid-year. What is the dynamics behind the timing whether or not you’re going to execute on those? And then can you dive a little deeper into the benefits if possible to both production reserves with those as well?

Right. There are two workovers we’re considering. These are proactive workovers, Matt. And so we see an opportunity to increase production from these wells anywhere from 500 barrels a day for an individual well up to maybe 1,500 barrels a day for the second well. The reserve forecast, we’re still working on, I’m not ready to release those numbers. But we do expect reserve additions to come along with these workovers. And the workovers are not driven by ESP issues. These are again proactive workovers to increase production and ultimately, reserves.

So with that in mind, Cary, what would be the reason you would not do it? It seems with the production increases, it would be pretty straightforward. What would be the reasons you would not execute those?

Right. The reasons for not executing is operational. The workovers are a very complex procedure that require simultaneous operations in the field, production and workover activities happening simultaneously. So it’s really a question around when is it the right time to execute operationally. It’s not a – not necessarily that we’re still trying to understand the value of the added production. We do believe we will add value. The question is operationally, when is it the right time to execute.

Great. And then also the additional lifting that you had in December, what led to use squeezing to into that month?

The answer to that really is that we had oil in the tank and we scheduled liftings to take advantage of that situation and moved as much product as we could during the month.

Okay. So there is nothing special then, it just was full and time to take care of it?

Yes.

Okay, great. Well, thank you, both.

All right. Thank you, Matt.

Your next question is from the line of Jamie Wilen with Wilen Management. Please go ahead.

Hi, congratulations on an outstanding year with so much progress on a lot of fronts. Just wanted to ask you about the drilling rig. Has it been secured? And what kind of rates and when would you expect it to be on-site?

Right. We expect it to be on-site September timeframe. We are still in the final stages of negotiating the contract. So Jamie, I can’t give any details just yet. But as soon as we have the contract signed, we can talk more about the details. But right now, I’m just not in a place, where I can give you those details. So I expect to sign the contract imminently.

Okay. So given September timeframe, we shouldn’t really expect much in the way of additional production till 2020?

Well, there will be one well that’s brought online in the fourth quarter and then a couple of more wells possibly in the first quarter of 2020. So that’s the way to view it, Jamie.

Okay. You mentioned something about the negotiations for Angola, the exit fee. Has that – I didn’t quite hear that. Is that ongoing at this point?

It is still ongoing. We have not finalized the negotiations in Angola. So I’m not ready to speak to any of the details, but it is certainly still ongoing.

Okay. And lastly, could you talk a little bit about the political situation in Gabon and what’s happening there?

Sure, sure. I can tell you our experience in Gabon. We have a staff of 80 in Gabon. And what we’re seeing is, it’s very calm. There is no signs of civil unrest. As everybody knows, if you read in the press, the President did suffer a stroke late last year. The messages we’re receiving directly from government – high-level government officials are that the President is recovering nicely and everything is very stable in Gabon.

Okay. And lastly follow-up on the question early about the workovers. You talked about being timing is a function of operational issues, but are there your people directly who are working on the workovers as well as everything else, or is that an outsourced operation?

No, it is our people. We have a group that focuses on workovers in drilling. So we have that in-house staff.

Okay. And timing-wise, even though we’re not going to be drilling till the latter part of the year, we can’t get the workovers done sooner. It sounds like a great opportunity. I’m not quite sure why we’ll put that one on the back burner?

No, Jamie, it’s certainly not on the back burner, and I don’t want to leave anybody with that impression. It – again, it’s operational planning, and we will execute the workovers as soon as possible. Our best estimate of timing on the workovers is mid-year. So – but it’s certainly a priority for us. I mean, we do see the value in the workovers.

Okay. So that could indeed happen before the drilling program actually begins?

I hope so, yes. It could indeed, yes. It’s certainly a possibility.

Okay. Al right. Thanks, fellas.

Okay. Thank you, Jamie.

And at this time, there appear to be no further questions. Do you have any closing comments?

No, I just want to thank, everyone, for joining our call, and have a good day.

Ladies and gentlemen, thank you, again, for joining today’s conference call. You may now disconnect.