Welcome to the Evolution Petroleum Corporation Third Fiscal Quarter 2016 Earnings Release Conference Call. [Operator Instructions]. I would now like to turn the conference over to Mr. David Joe, Chief Financial Officer of Evolution. Please go ahead. Thank you.

Good morning and thank you for listening to Evolution Petroleum's conference call to discuss operating and financial results for its fiscal third quarter ended March 31, 2015. I'm David Joe's, CFO for Evolution. On the call with me today is Randy Keys, our President and CEO. If you wish to listen to a replay of today's call, it will be available shortly by going to the Company's website or via recorded replay until May 12, 2016. Please note that any statements and information provided today are time-sensitive and may not be accurate at a later date. Our discussion today will contain forward-looking statements of management's beliefs and assumptions based on currently available information. These forward-looking statements are subject to risk and uncertainties that are listed and described in our filings with the SEC. Actual results may differ materially from those expected. Since detailed numbers are readily available to everyone in yesterday's news release, this call will focus on key overall results, operations and an update on our capital plans for the remainder of fiscal '16. I'm now going to turn the call over to Randy Keys, President and CEO.

Thank you, David. For the quarter despite exceptionally low prices our bottom line results were very close to breakeven. We reported a small loss of $0.01 per share for the quarter but we’re still solidly positive on a year-to-date basis with $0.10 per share through the first three quarters of our fiscal year. On the operational front, virtually all of our news is positive except prices. First production was up 2% to over 69,000 barrels per day on a gross basis from the Delhi Field. We’ve steadily rise in productions since reversion of our working interest in November 2014. At that time production was around 5800 barrels per day and over the succeeding 18 month period since reversion production has increased by more than 18% with a steady increase quarter-over-quarter during that period. Most of the increase has resulted from projects to increase sweep efficiency of the CO2 flood through selectively sending the C02 to the best subzones within the formation. This has been done with an eye to the most efficient and frugal use of the C02 resource. Our purchased C02 volume which are the main drivers of our lifting costs have averaged around 73 million cubic feet per day over the past six months. This is down from around 90 million per day in earlier periods in 2015. These lower C02 costs have been a key factor in our very competitive lifting costs which have been in the $13 per barrel range over the past two quarters. Since our purchased CO2 costs are tied directly to the price of oil. This cost has dropped significantly with lower oil prices. I should mention for comparison purposes that this lifting cost isn't all in cost including severance taxes because the Delhi Filed is a qualified tertiary recovery project in the…

Thanks, Randy. First of all we’re pleased to be in the position that we were in with a strong balance sheet despite the industry conditions. Adding to our financial strength we recently entered into a new senior secured reserve based credit facility with MidFirst Bank one of the largest privately owned banks in the country. The $50 million facility replaces an unsecured facility of $5 million which was expiring in April. Our initial borrowing base is set a $10 million, presently there are no outstanding borrowings under the new facility. This new facility expands our financial capabilities and provides an additional financial resource as the company evaluates acquisition and growth opportunities. In the quarter we did post a small loss of about 298,000 or $0.01 per common share marking our first quarter of negative earnings over the past nine quarters and only the second quarter of reported losses out of the past 20 quarters. This loss was primarily driven by lower revenues as a result of lower realized oil prices and significantly higher litigation expenses. Offsetting these factors were slightly higher oil production, lower operating expenses and realized hedging gains. As Randy mentioned for the nine months year-to-date we have a quarter $3.3 million of net income to common which is a $0.10 per share. Revenues in the third quarter were $5.1 million, 23% lower than the sequential previous quarter, as slightly higher production volumes were largely offset by a 24% reduction averaged realized price. Our averaged realized price per barrel excluding derivative settlements was $30 compared to $39.59 in the prior quarter including derivative settlements our average realized oil price per barrel was $40.75 compared to $47.43 in the prior quarter. The April 2016 derivative contract just settled resulting in a $40,000 net loss to the company. The May…

[Operator Instructions]. First question comes Joel Musante of Euro Pacific Capital. Please go ahead.

Just had a couple housekeeping items. On the litigation cost I mean how should I model it going forward? You talked about after you expect it to decline after the trial in July but up until then over the next couple of months?

Well we would like to believe that it has peaked this quarter and that we will be on a declining cost base, there will obviously be some continuing costs in the next quarter and the current quarter that we’re in now. There was a tremendous amount of activity in the first quarter -- in the first calendar quarter ended March about 25 or 30 depositions on each side and motions back and forth. So it's accelerating, we like to believe that cost is going to decline significantly in the next quarter and then largely go away after that. That's assuming we do hold that July trial date.

And on the LOE another appraise of kind of rebound some -- do you expect that to go up a little bit now on any unit basis I guess.

We do disclose the portion of those costs that are directly tied to CO2 purchases. I think they went from approximately a $1 million last year in a $40 price average price environment to around 800,000 of a $30 price environment. So I would expect them to go up -- we should average it appears in the $40 price range which would put us similar to where we were in the last December quarter which was actually not much higher on an overall basis. We did have some ad valorem taxes which are once a year expense that hit in this quarter which caused our non-CO2 cost to be a little higher than they had been in the previous quarter. So I think we'll see them probably tick up some but maybe not as much at least not in a $40 price environment as you know perhaps not a lot higher than the fourth calendar quarter of last year.

And then on the differential for oil from the benchmark, what's your differential now from LLS Benchmark?

So our pricing formula is we have received the WTI price plus an LLS premium and as I said that's been in the $50 range over the last several months which is down significantly from where it was most of last year and then we pay a total transportation cost of a little over $3 per barrel that's a combined marketing and pipeline cost to get the oil to market. So in the past the LLS premium had largely offset that transportation cost. We're now a little bit under on a net basis at least for the present but you know the LLS premium is somewhat tied to brent pricing and the overall availability of the lighter crudes in the U.S. So really don't have a clear view of what that's going to look like over the next several months.

Right, it bounces around quite a bit. And just on the acquisition front can you give us an update there what you're looking at? How that’s coming along?

Well I think we just ended a quarter where we all went through a tremendous shock and one positive result from that that we expect to see is much more rational pricing and a significant drop in the bid ask spread that we saw through most of last year. You know all I can say is that we are continuing to look and the one positive for us that happened with the new credit agreement is it does give us a better ability to look at cash transactions as people are forced to sell properties whether it be in restructuring or. non-core divestitures and we really didn't have an effective tool to do that prior to putting this new credit facility in place. So we're continuing to look, we think we may have hit a period of much more rational pricing. So we're optimistic in the short run that we will see some thing that is of interest but we've been very disciplined, very patient and we continue -- we're going to continue to be disciplined and patient. We were looking for properties with production and we're looking to add a significant core area that has meaningful production.

[Operator Instructions]. The next question comes from John White of Roth Capital. Please go ahead.

The waterflood initiative on the Southwest in the Delhi field is there is some timing you can give on that?

Well it has been approved and it's a relatively simple project. I mean it's a long lead time project. So it does not involve drilling any new wells. It basically involves converting existing wells to either water injection or production wells with ESPs, electric submersible pumps. So I don't know the exact timing but it should be a 60 to 90 day project and it's been approved by all the partners in my understanding. So this was just proposed about two weeks ago and I would expect that we would be largely complete by the end of this quarter perhaps it will roll into the following quarter.

[Operator Instructions]. There are no further questions at this time. This concludes the question and answer session. I would like to turn the conference back over to Randy Keys, CEO for any closing remarks.

Well thank you very much for listening to the conference call. We hope we've hit a bottom in the first quarter in terms of prices. We expect prices to be volatile but we do see some fundamental return to supply and demand balance later this year, but we’re fundamentally modestly bullish on oil prices over the next year to 18 months and we're managing the company through that process. So thank you very much for listening to the call.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a great day.