Good morning. My name is Mellissa and I will be your conference operator today. At this time I would like to welcome everyone to the Stone Energy First Quarter 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. Thank you. Mr. Welch, you may begin your conference.

Okay, thank you very Mellissa and welcome everyone to our first quarter 2013 earnings conference call. Joining us this morning is Ken Beer, our Executive Vice President and Chief Financial Officer. Ken will discuss our quarterly financial results and then return the floor to me where I will discuss our progress in implementing our strategic plan. After that we will be happy to answer your questions. So, with that, Ken.

Thanks Dave, let me start with the forward-looking statement. In this conference call we will make forward-looking statements within the meaning of the Securities Act of 1933 and Securities Exchange Act of 1934. These forward-looking statements are subject to all the risks and uncertainties normally incident to the exploration for and development and production and sales of oil and natural gas. We urge you to read our 2012 Annual Report on Form 10-K and our soon to be filed first quarter 10-Q for a discussion of the risks that could cause our actual results to differ materially from those and any forward-looking statements we may make today. In addition, in this call we may refer to financial measures that may be deemed to be non-GAAP financial measures as defined under the exchange act. Please refer to the press release we issued yesterday, which is posted on our website for reconciliation between the differences between these financial measures and the most directly comparable GAAP financial measures. And with that, rather than go through the first quarter press release in great detail we will assume everyone has seen the release and the attached financials accordingly I’ll focus on selected financial items on this call. Our discretionary cash flow for the quarter was $159 million or over $3.15 per share and earnings for the quarter were $40.8 million or $0.82 per share; with both of these results being well above the analysts’ first call estimates. Production for the quarter came in at 40,000 barrel equivalents per day or 241 million cubic feet a day, just above the upper end of our guidance with a split of approximately 46% oil, 6% NGLs and 48% natural gas. Production of natural gas, NGL and condensate was affected by the previously announced third party pipeline issues in…

Okay, thank you very much, Ken. We felt that this was a good quarter as we achieved many strategic milestones and also delivered above our first quarter guidance while maintaining our guidance for the full year, despite the extended third party pipeline downtime in Appalachia and also our reserves were stable and expected to grow again this year. We also continue to generate significant discretionary cash flow of almost $160 million which more than funded our $114 million of capital needs in the first quarter. The balance sheet remains strong as we ended the quarter with over $261 million in cash and an undrawn bank revolver of $400 million with no debt obligations due until 2017. Also, our current assets of approximately $478 million far exceeded the current liabilities of about $206 million. We continue to exploit our legacy conventional shelf assets as we develop our three growth areas Appalachia, Deep Water and the liquids rich Deep Gulf Coast gas. Our strategy remains the same as the last seven years, and that is to pursue investment and price advantage nature gas and material oil prospects. Our proved reserves are still balanced with approximately 49% liquids and 51% natural gas. Disposition in continuing performance sets us up well for the execution of our three year plan. The three year plans includes an aggressive work over program with limited drilling investment in the conventional shell; continuation of our two rig program in Appalachia and accelerating investment in the deep liquids rich gas; Gulf Coast play and also in Deep Water. On the shelf, we plan to drill about three to four oil wells this year with the aim of maintaining a relatively stable liquids production rate but not trying to grow reserves there due to the limited size of remaining opportunities. In…

(Operator Instructions). Your first question comes from the line of Michael Glick with Johnson Rice.

Just a question on Amethyst, I know you guys have a cartoon on the prospect in your presentation, but I was wondering if you could kind of just walk us through the history of the prospect and what you like about it.

Well, just in general we like the fact that there is a, what we believe to be a down dip well drilled that had an oil [show] [ph] and we have new seismic data which we believe indicates a good strong positive ABO response and indicates that the sand could likely thicken up as we move up dip. And so that in a nutshell is what we like about it.

And then in just terms of funding, I mean given your increased activity level both on the operated side and on the non-operated side, could you kind of walk us through some potential funding scenarios and do you have some success on the exploration side.

Sure. Ken you want to take that one.

Yes, Mike and again we entered the year recognizing that we wanted to have a strong and flexible balance sheet because of this issue, we didn’t want to be hurt by success, we wanted to take advantages of success; and (inaudible) with the quarter of a billion dollars of cash and undrawn line, we’ve got a lot of flexibility going through this year and into 2014. Although as you highlight one of the things we certainly can do as we have exploration success is turn to either sell down some interest to help pay for, fully pay for development expenditures. We can bring in partners more on the front end. Certainly, the debt and equity markets are always out there but we really are trying to position ourselves to have a lot of different arrows in the quiver and again I think starting off with a pretty strong and flexible balance sheet as your, I am sure, where Mike none of our public debt is, as that becomes due in really 2017 – 2022. So we have a lot of flexibility in our capital structure with the thought of looking at the different alternatives, of which there are several win-success-occurs.

Would selling a portion of the shelf be one of those potential possibilities?

Certainly as we progress through this year, that’s certainly something, we will address this as we get closer to the end of the year. We have certainly been pinged by different people on that and yet feel like that is an asset that has provided us with really positive cash flow and allowed us to really [prompt] [ph] the pump for both Deep Water and Appalachia during the last several years.

Your next question comes from the line of Dave Kistler with Simmons & Company. Dave Kistler - Simmons & Company: Just following up on the Marcellus a little bit here; gas prices are getting a little bit better on the margin. Does that cause you guys to think about stepping out to Christine and Katie, potentially, or is that acreage that you’re just going to maybe let expire over time?

Well, let me just take that one. You know we have this program that we gotten very efficient, executing in the Mary area, and our intent over the next three years is to really stay focused in Mary. Christine is up in an area where there is a lot of industry activity and we have a number of 10 year leases there, David, so we don’t feel a sense of urgency to really get up there and do something in Christine. And then our Katie area; it’s a smaller area and we like the results there. But it is dry gas and we just feel the economics would actually require an even stronger gas price to make that something that would worth picking up another rig for. Dave Kistler - Simmons & Company: Okay, I appreciate that. And then going back to Amethyst for a bit. You guys have talked about selling that down in the past. Would the timing of that sell down impact the timing of when you drill that, especially now that you’ve gotten the Diamond rig or won’t you be willing to if you don’t sell it down to just continue to press forward and try to be spudding that by year end?

I think we are going to continue to try to press forward, but we do have a full (inaudible) press on trying to market that. Now I can tell you that we do have a number of people that are actively evaluating, participating with us on Amethyst.

And Dave realize one of the very attractive parts about Amethyst is with the Pompano facility right there it is a exploration project that has with it some pretty quick turnaround to production, so I think that’s one of the more attractive parts about the prospect and as Dave said, we’ve got a number folks who are certainly looking at it. Dave Kistler - Simmons & Company: Okay appreciate that. And then just think about your commentary about La Cantera the operator on lot of that activity indicate that they thought production could reach 120 million to 130 million Boe equivalent per day, you guys kind of talk of 100 plus, can you kind of help us understand the deviation between the two of those?

I hope the operator knows more about it than we do. I said overall 100 but I feel little - I don’t know I feel a bit out on a limb promising you a number that I didn’t - have not had detailed review and we do feel confident it will get above a 100 and hopefully that will be correct and we’ll see a bigger buzz from it. Dave Kistler - Simmons & Company: Okay, appreciate the additional color, thanks guys.

Your next question comes from the line of the Samuel Culbert with the University of California.

I’ve listened to several of your calls, and I’m encouraged because you keep talking about making money and growing the business. What you haven’t talked about is what you plan to do with the money, we’re going to see dividends, we’re going to see acquisitions, where are you headed?

Well, I’ll just take a stab and Ken you can fill in what I missed, but we have an incredible opportunity set now Sam that we feel like we can continue to use the proceeds of these earnings to continue to organically grow the business; that being said though we have been opportunistic in terms of always looking at acquisitions when assets are available and we’ll continue to do that as well. Ken anything else to add?

You know that’s again right as Dave highlighted, I think at least in our minds, the reinvestment into these projects and I think it’s been highlighted that we do have an abundance of project right now that our sense is relative to a dividend that’s the more appropriate reinvestment vehicle for Stone at this point in time.

Where we are going with this? As an investor, I have not a clue about what’s ahead for me. You are going to make more money? You are going to show better profits? To what end?

Yes, as I said, the way the stock market does work, is there are some dividend payers but you also do have a majority of companies that do take that capital that cash flow and reinvest it in their business if they see that, if they have got an abundance of projects. And the ultimate investment at least as we see at it is less tied to a dividend and more tied to stock appreciation, so that would at least be the suggested answer.

Well, here is an analogy, consider yourself a kid with a very rich parent. Don’t you want to go out to dinner every once a while or do you have to wait for him to die?

Well, with my kids, I know a lot of times I just would not give them a whole lot of money during a growth period I rather have that build up and not provide a very hefty allowance if we think we can, as parents, we can invest it a little more wisely. So we can talk about lot of theoretical analogies, but the decision by the company and by the Board is that we have got plenty of projects to reinvest in, to grow the company.

Your next question comes from the line of Mario Barraza with Tuohy.

Just wonder if you visit the Marcellus for a second. What is kind of your midstream? We have had a couple of issues in the past that obviously aren’t your fault weather-related and then these repairs. What do you have I mean can you go out and seek access third capacity if there are any other hiccups you know if you do find, have some good success with this upper Devonian or if you want to further accelerate the Marcellus, do you have the capacity on the Williams’ pipeline to support a decision like this?

Ken, you want to talk about the pipeline issue or you want me to?

Let me jump in there, again this has been a bumpy road with the pipeline situation some of which has been some real bad luck. And going forward I think we are certainly working with Williams to address issues and problems. We are also working with Williams to even address different options. As you may be aware in our Heather field, we are actually tied to different gathering systems mid stream to system. So, we feel like once we get a lot of these issues quick to dead, the bottle neck has not been at the major trunk line which is the Texas eastern line; we have plenty of capacity there. It's really just been working through these issues as William's is again digesting their acquisition of the came in lines between that and as you pointed out Mario, some real bad weather. I think it’s a matter about just working with them to try to work through these issues. This is a start up situation where; came in handed the keys to William and just taking a little more time to work out the gains.

And then I asked this question last quarter; I am going to try it again; the non-core profit is the small Eagle Ford, The Paradox Basin and the Niobrara. I know there is no CapEx going there. Do you have a data room opened for those assets? I know you're balance sheet is in solid condition right now, but where do you see those going longer term in the portfolio considering there are not going to get any CapEx right now.

Fair enough and at least a couple of them have some industry activity around them that were hoping to benefit from; certainly and I think you categorized them correctly, these are more non-core assets and certainly subject to someone knock on our door or us being a little more aggressive into putting them out to bid. But in the Interim, for instance in the case of the Eagle Ford it is, its generating some production and thrown off some cash flow. It can increase again industry activity around there but again certainly not a focus for the company now and my sense is over time those non-core assets will be disposed from one form of fashion.

And then the next question comes from the line of Hubert van der Heijden with Tudor Pickering.

Just a quick question on the Marcellus kind of the higher level way of thinking about the Mary area, on your current kind of one, or one horizontal one vertical rig, you've quite a long inventory life there. What would it take for you guys to put more capital to work there and accelerate that program then?

Think it would take some sustained higher natural gas prices and our belief that they were going to stay high or else our ability to hedge amount in the future where we could lock in returns that we think would be comparable to what we can get on our other businesses, Ken, what are your thoughts?

Yes that again, it's the sustainability obviously we've had over the last 2-3 months we've seen some strength in the price of natural gas. I think for us to shift gears would want to see that at a sustained rate for some period of time, and as Dave pointed out I do think it's, the Marcellus is also competing against other parts of our business and that's some pretty hefty competition when you're talking about some of the people or the projects that have very strong rates of return, so I think as Dave highlighted in his commentary, the idea of us just staying focused with a two rig program for at least the next couple of years is probably the path we'll take.

Okay, so to quantify higher price, is that kind of sustainably at 4.50 to 5 or would you really to have see higher than that?

Yes, I'd think we'd want to see something above 4.50 and hopefully in a $5 range, but the other thing to point out is that as we have really to hone in on this particular area and get into a factory production mode almost, we've seen a number of wells, that we've been able to drill per year go from 18 wells a year up to over 30 wells a year with the same program, so we're getting a lot more efficient and it's almost like we've added another rig up there just by the efficiency that we've gained over the last three years.

(Operator Instructions). The next question comes from the line of Dave Kistler with Simmons and Company.

Hey guys, just to follow up real quick on a couple of things, when you look at 2Q production guidance you talked a little bit about Pompano field being down. Can you kind of guide us through why that number is kind of need first as we what we saw in Q1, I know Q1 surprised a bit to the upside. Any color you can give us on that would be useful.

Dave, we had a combination of; Pompano was down for a little over a week, but more importantly during the month of April, Appalachia, the volumes at Appalachia were very restricted as we highlighted in the press release. It’s really comeback but it’s really comeback only in the last few days. And so we want to make sure we had appropriate guidance for the quarter. And certainly the month of April, in a three month quarter was on a lower end and so we wanted to make sure we didn’t over our skills on the second quarter value. So again, a lot can happen as you know, there is always downtime, Appalachia might be up in running today but it still could be down two weeks from today. And also as you might be aware there is, in the second quarter particularly as the weather in the gulf is relatively mild, I would expect to see some additional downtime from other areas, other pipelines during the course of the quarter; might not be for a week or 10 days but I think you can see some other downtime projects. As you might be aware of the Pascagoula plant went down for I think several weeks. We were able to divert gas to keep our productions at Pompano flowing but those are the types of issues we’ve to deal with as we come up with projections or guidance for the particular in the second quarter. Dave Kistler - Simmons & Company: One just to understand on the Marcellus, if I recall from your previous releases you were saying it was producing kind of towards the low end, 30 million to 35 million a day in April and then shall just be blending that with 60 million to 70 million in May end and June.

We would certainly hope so. But that’s were again;

But that’s where we are right now, I mean we just want to get confidence that we can keep this cash flow and sustainably that we not continue to have any more of these pipeline problems David. That’s the uncertainty. Dave Kistler - Simmons & Company: I appreciate that and I understand probably a frustration level on your end thinking that onshore would be more predictable than offshore but understand and appreciate the color.

There are no further questions at this time.

Okay, thank you Mellissa, and thanks everyone for joining our call and we look forward to seeing you in various conferences and speaking to again at our next call, so long.

This concludes today’s conference call. You may now disconnect.