Good morning and welcome to Genie Energy’s Second Quarter 2014 Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions). After today’s presentation by Genie Energy’s management there will be an opportunity to ask questions. (Operator Instructions). In this presentation Genie Energy’s management team will discuss financial and operational results for the three months ended June 30, 2014. Any forward-looking statements during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include but are not limited to specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC. Genie Energy assumes no obligation, either to update any forward-looking statements that they have made or may make or to update the factors that may have caused actual results to differ materially from those that they forecast. Please note that the Genie Energy earnings release is available on the investor relations page of the Genie Corporation website, www.genie.com. The earnings release has been filed on a Form 8-K with the SEC. Please note this event is being recorded. I would now like to turn the conference over to Geoff Rochwarger, Genie Energy's Vice Chairman and CEO of IDT Energy. Please go ahead.

Thank you, operator. On behalf of our management team, including our Chairman and CEO, Howard Jonas, welcome to Genie Energy's second quarter 2014 earnings call. We appreciate you taking the time to participate this morning. My remarks will focus on operational developmental plans. On the E&P side of our business I will cover recent progress in our oil and gas exploration program in Northern Israel and provide an update on our other projects. On the retail energy side of our business, I will focus on our rebound from a very challenging first quarter which resulted from last winter's polar vortex and I will provide an overview of several of our most important growth initiatives. Afek Oil and Gas is our subsidiary holding an exploratory license covering 396.5 square kilometers in Northern Israel. As you know if you have been following our story, we believe that there may be significant amounts of oil and gas in our license area based on our above ground geophysical work and analysis of existing data. Earlier this year, we applied to the Northern District Planning and Building Committee for a permit to conduct a ten well oil and gas exploration drilling program. The permitting process included extensive submissions and planning as well as a public notice and comment period culminating with a public hearing. As part of this process an extensive outreach program was conducted. It included consultation with geologic and national resource experts and conducting numerous town hall style meetings to meet with local residents, answer questions, and allay concerns about the impact on water quality and other local resources. After this lengthy process and a thorough review of the evidence presented, the committee met recently and made their decision. I am pleased to report that they voted to approve our application for a…

Thank you Geoff and thanks to everyone for joining us this morning. My remarks will cover our financial results for the second quarter of 2014, the three months ended June 30th. Except, where indicated otherwise, all comparisons in my remarks are to the results for the comparable year ago period, the second quarter of 2013. As in prior quarters IDT Energy accounted for all of Genie's revenue, cost of goods sold and gross profit. As Geoff pointed out in his remarks, this quarter represented return to normal from the impact of the polar vortex in the first quarter of this year. While there was a residual effect from increased churn and rebates in the early part of the quarter we are pleased with the overall performance of the business. On a consolidated basis IDT Energy's revenue decreased to $48.8 million from $55.1 million. Sales of electricity totaled $40 million, 11.3% less than a year ago quarter and gas sales totaled $8.8 million, a decrease of 12.1%. Looking at sales of electricity, kilowatt hour sold decreased 29.6% from the year ago quarter. This was caused by a decline in average meters served during the quarter which decreased 22.3% and consumption per meter which decreased 9.4% compared to the year ago quarter. The decrease in consumption was partially offset by a 25.9% increase in revenue per kilowatt hour sold reflecting higher electricity cost and increased market rates in many of our territories. Therms sold decreased 11.8% entirely as a result of an 18.9% decrease in average gas meters served during the quarter. In contrast to electric meters, average consumption per gas meter increased 8.8% compared to the year ago quarter. In general we have experienced more churn in the Greater New York Metropolitan area where per meter consumption is lower than in…

Thank you. We will now begin the question and answer session. (Operator Instructions). And our first question comes from Marco Rodriguez of Stonegate Securities. Please go ahead. Marco Rodriguez – Stonegate Securities: Hey, good morning guys. Thanks for taking my questions. I was wondering if you could talk a little bit more about Afek, I mean how should we be thinking about this in terms of the roll out of spudding these wells in terms of kind of like timing and then the CapEx expense associated with that?

Okay, hi Marco, it is Geoff. So, I will answer -- let me try to answer your questions in order and Avi please feel free to add in anything else. First of all in terms of the roll out with Afek, we certainly have passed a major milestone in terms of getting the Northern Council approval. We still need to get the paper document for the permit. While that sounds -- it sounds like a fairly simple feat, we know that we are getting it, it is just a matter of time. It probably will take upwards of about four weeks. There is some other administrative things that need to be taken care of. I would for now barring any other legal issues and any other bureaucratic issues, our hope and expectation is that we can spud the first well, I would say probably in -- I would say within the September or October timeframe and the plan will be that based on coring and sampling we will probably be stationed at that first well for approximately four months. We want to make sure that, you know, initially spudding in a new [inaudible] resource will take some time. As I said we want to take samples and core. So I think that for the time being that's how we are looking at it. If we see any delays we will obviously communicate that but we feel pretty good about that timeframe. Regarding the CapEx required based on what our now updated schedule is for spudding and for drilling wells for the remaining -- the remainder of this year, we are looking at approximately $3.5 million.

I mean, this is Avi, we are looking at each well to be approximately $3.5 million of incremental CapEx or incremental expense. You know obviously each well is unique and some of the earlier wells might be a little bit more expensive but on average that's what we expect the wells to cost. Marco Rodriguez – Stonegate Securities: Okay. And how do you foresee the other wells coming up after the first one spud here in September-October?

Well, what we were granted right now with the license and the permit that's forthcoming is it is a 10, it is a 10 well three year exploration project. So our intention is that as soon as we have completed all of the initial work, all the drilling at that first well it is our intention to move towards the second location which will be determined specifically which location by the results that we see from that first well. But it is our intention to try to at least complete the first three wells in succession as quickly as possible. Marco Rodriguez – Stonegate Securities: Okay. And can you give us sort of a sense as far as how long it takes to bring up a well?

Yeah, I think that the way that we are looking at it right now and we certainly will have a lot more information obviously once we spud and we successfully drill that first well. Because this is a specific resource that has not been drilled with the exception of some water exploration wells, it is a little hard to tell right now but we do believe that the four months represents the time of spudding to well completion. Marco Rodriguez – Stonegate Securities: Got it. And then switching gears to your -- on Diversegy, can you talk a little bit about the initiatives there and how do you see that or do you see that part of you growth driver here in the near-term bringing net meter growth in Q4 this year. And then what sort of growth rates on the net meter side do you think Diversegy can add in 2015?

Okay, so to answer your question - well, what we have done since our acquisition in December with Diversegy is actually EPIQ which was a wholly owned subsidiary of Diversegy is now -- we restructured it, we reorganized it. So they are actually now sister companies, EPIQ and Diversegy. Diversegy is much more focused on the high-end corporate industrial corp., energy, advisory and brokerage services which I will leave aside for a moment and talk a little bit more about EPIQ since that's actually much more relevant for what we are doing right now. So, as I mentioned in my remarks, once we acquired EPIQ, EPIQ was at the time of acquisition was probably around for about a year prior to the acquisition based on a couple of leaders in the industry coming together. And we spent a lot of time with them to rebuild, restructure, get them primed to start acquiring. They have two goals, and that is to acquire meters throughout the country, throughout the 35 somewhat deregulated states. And number two is to try to bring a focus and help acquire meters via this new channel for IDT Energy. Based on where their base of reps have already been established over the last four months there are some markets like Texas as an example that they have had some early success with reps that have come onboard and brought meters. We do see that ComEd in Illinois will be their first market where they will incrementally add meters for IDT Energy. We believe that, that is a process that has only very recently started and very much according to the network marketing model this is a process that starts off slowly and then has more reps as the base of rep spills and develops that then starts to grow exponentially. So that's where certainly the next quarter we believe that the ground base will start to grow. We do believe that towards the end of the fourth quarter that they will start adding a real material number of meters there. And I can tell you that at least for now based on where they are developing their base, Pennsylvania will probably be -- will most likely be the second IDT Energy market that we expect to see incremental meter growth coming vis-à-vis that channel. Marco Rodriguez – Stonegate Securities: Okay. I understand that, and then in terms of the extra marketing cost, the acquisition cost that you mentioned in prepared remarks, can you kind of quantify what that is and you also mentioned clients being a bit stickier, can you talk about why that is and what you are expecting there?

Sure, for us when we look at and then subsequently acquired EPIQ and Diversegy, EPIQ has a very specific purpose for us which is as we have our niche is very, very specific and focused on the residential and small business sector. This is a mass market customer base. We have developed and proven an expertise regarding the marketing channels that we have utilized over the last 11 years. What we like about network marketing is that it reaches ultimately the same customer base but because the introduction into the homes of these prospective customers is completely relationship driven as opposed to an instinctive sale, while on the upfront side the commission has paid out to the REPs, to the network marketing REPs is higher than what we have historically paid for the enrolment of the customers that come in vis-à-vis the door-to-door channel or up until the marketing channel, that's true. However, because it is relationship driven with income generation opportunities for the REPs, we believe and we study in the markets that the expectation is that the lifetime value of those meters is significantly longer than the lifetime value of meters that just signed up vis-à-vis the more traditional or the acquisition channels that we have historically used. Marco Rodriguez – Stonegate Securities: Got it, and is there any expectation that as you roll EPIQ and Diversegy out into the IDT Energy current territories if there is any sort of cannibalization if you will?

I think that there is -- while there is always the possibility of that to happen, we worked that -- we worked closely with the management at EPIQ and Diversegy to try to avoid that. I would say that the chances for that are probably pretty low because the one area -- an additional incremental area for us with the EPIQ channel is -- the reality is that they will have success in acquiring probably much higher consumption meters than that that we have historically been able to acquire with door-to-door and outbound telemarketing.

I am just going, this is Avi, I will say it just a little bit different, in the sense one of the reasons we are so excited about this marketing channel is that in our analysis of the various ways of marketing to our target customers we identified that this is a channel that is fairly distinct in the types of meters that it is going to target than what we have been traditionally able to reach with door-to-door and outbound telemarketing. So there is a certain cross section of our customer base that we haven’t been able to get to through our traditional meetings and our analysis of these marketing channel identified that this is a way of specifically targeting those types of customers. So that's why we are -- we feel strongly that from a cannibalization perspective the risk is low.

Right, and I guess to put it in a very plain terms and the way that we referred to this is, that the reality is that approximately 80% of residential customers are on the do not call list. Approximately 80% of the residential customers are either not home to open their door or won't open their door. And for us the challenge has always been, well if we can sign up a somebody on a block in Brooklyn how do we get into the door for their neighbors that we know exactly what their usage patterns are, what their income levels are. We basically understand the nature of the rest of those customers and we see in this channel a very -- potentially a very effective way of getting to those customers and that is what excites us the most about this. Marco Rodriguez – Stonegate Securities: Got it, and one last quick question, I am just wondering here from your prepared remarks you are talking about two different brands now on the IDT Energy side. I guess IDT Energy going and marketing the variable rate plans and forgetting what the new brand is called for the fixed ones, can you talk a little bit about how that's going to work are they two separate sales forces or what?

So, first of all what I will say is that I do expect by that the next quarterly call that based on some of the initial roll outs that I have announced today that I will probably have much more information to talk about these two brands, the focus, some of the other initiatives and how they fit in. But for now there will be different sales forces for the different brands. It helps us in terms of acquisition vendor management. We have seen and as we have grown with a lot of these vendors that they had specific specialties and yes, and it will be geared towards that. I mean, I think that one of the other things that we, one of the other products that I did not discuss in depth during this call which will also play a central role in the future is also how we are going to be positioning our very successful green product. And what we are trying to do ultimately is to create specific brands with their core competency backed by vendors who have the experience in those specific channels. So, for now Residents which is the other brand is in the process of getting licensed. It has licensing right now in two primary utilities in New York. It is our goal to get them licensed in every single utility that we are -- that IDT Energy is licensed in as will be the case with our evergreen brand that has been used and will be used as the primary brand for the green variable products that we are selling as well. Marco Rodriguez – Stonegate Securities: Got it, thanks a lot guys.

Sure.

Our next question is from Ian McLelland of Edison. Please go ahead.

Good morning gents. I am going back to Northern Israel if I may. I have got a couple of questions, the first one is in terms of your readiness to start the work program once you have the exploration license. You are talking about spudding your first well in September-October, does that mean that you actually have everything on the ground vis-à-vis a rig identified, long lead items actually in place, and the crew ready to be mobilized. And also specifically on the rig, if you do have something ready to go practically immediately does that actually mean that you are already effectively on the meter for the rig that you have identified? And then my follow-up question is in addition to drilling in that sort of first three to six months period do you plan to do any other activities on the -- I guess specifically I am thinking about additional seismic acquisition or -- anything about nature?

Okay, I will try to cover all the questions and if I don’t please feel free to interject. So, I am actually very happy that you asked the question, because as the permit process, the regulatory process has been underway with Afek based on how we have conducted ourselves and have worked well with all of the -- all the various parties on the ground in Israel, we have -- our operations crew has been working day and night to make sure that we can start drilling. We can spud that first well as quickly as possible after the actual permit is issued. So number one is yes, we do have at present I am happy to say, that not only do we have the rig on Israeli soil, it is not in the north yet but it is being warehoused right now in Israel. As well as I would say the vast majority of the ancillary equipment that we have sourced from at least four or five key vendors from the oil and gas industry to help ensure that we would be prepared to start as quickly as possible. For the next part of your question, while I can't disclose very specific terms of our agreement with our rig vendor what I would like to say is that we had developed a very strong relationship with Viking and they have thus far obviously, you know, it will come down to when we actually drill but up until now they have proven to be a not just a vendor but a partner that has now developed into a very strong relationship between the two companies. You know, we moved the rig from Turkey to Israel at a time of significant political instability in the region both in Israel as well as in Turkey. And they have never stepped back. They have responded and have worked very aggressively with us in a very proactive basis and they have additionally worked with us to ensure that I am just saying the priority is to get the rig on the ground, on the soil in Israel and make sure that financially that it would make sense for us as well as for them. So I will just say that we are working very closely together in a mutually beneficial relationship and I am very happy with what the economic terms are for that relationship.

Okay thanks and just specifically then on the rig contract, do you have the availability if the results are good to easily access a second rig to increase your efforts?

So, within the relation, within the Viking relationship, yes. The answer to that is yes. We have however, very strict terms that will govern the permit that we receive whereas the actual drilling rig can only work on one specific well at a time and what will probably happen is that working very closely with the Energy Ministry and the Northern Council who govern this license and -- the permit not the license, our work will be limited to drilling one well and then once we move the drilling rig out, all the completion work and prior to the completion work some additional coring analysis, pressure testing and some additional testing that we will do can happen in that initial rig. But that is a limitation of the permit for now for exploration. But certainly working with the relationship we have identified what would be the follow-up drilling rig that would allow for hopefully in the event of our anticipated expectation of a discovery during the exploration process and then some resulting in a production. That is something that we have already discussed with them at great length.

Okay, thanks, and then on the follow-up question about additional activities over and above drilling?

So, at the present time our focus will be using the -- using all of the testing that we have done up until now as well as the seismic work as well as the available data from all these folks and what exists from the sub surface. And what I would say is probably for now we are looking for the results from at least the first well and depending on what we see in the first well probably the results of the first two or three wells to then enable us to go back and map a much more accurate substructure qua to then matchup against what the initial periods that we have developed and based on that we then may decide to do additional work. But we feel that based on what we have been allowed to do that we have enough of -- we have enough information right now to dictate the priority of at least the first three or four wells.

Okay that makes sense. Thank you.

(Operator Instructions). And our next question is from Aaron Shafter, Great Mountain Capital Management. Please go ahead.

First congratulations on the progress you have made towards drilling in the North of Israel. My question is regarding the project in the Shfela Basin and the recent late filing by the environmental protection ministry and the curious statements that they made and anything else that you could tell us about the project there?

Absolutely. I will -- I want to present the update where we are today based on some of the late filings and some of the information that we have put that's in the release. I will call it tempered excitement. I think that for more than four years we received the license from the government of Israel to perform a pilot test in the Shfela Basin for oil shale and I think that as we have discussed many times we have been frustrated by the lack of any real progress since that license has been awarded to us and there is a lot of reasons for that. I think good, bad, and whatever, massive commentary for another time. But what has recently happened is a -- what was a baby step forward it is a step forward and I hope that this is and I am cautiously optimistic that we have actually taken very recently the first baby step forward in what I believe and what I hope will be some real -- some real decisions within the next year that will hopefully enable us to finally move forward with getting the permit for the pilot. The documents that was issued by the Environmental Ministry was a document that was issued 35 days late and not coincidentally I think two or three days before what has -- what is I think a critical milestone in our process and our progress and that we are finally for the first time attended and been invited this past Monday to an official meeting of the Jerusalem Council, that is the council that governs the awarding of the ultimate permit which means that they have recognized for the first time our application for the permit, that the process under which the regulations in Israel…

Okay, thank you.

(Operator Instructions). I am showing no further questions at this time. This concludes our question and answer session and conference call. Thank you for attending today's presentation. You may now disconnect.