Good morning. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vermilion Energy Inc. Second Quarter Results Conference Call. [Operator Instructions] Thank you. Anthony Marino, Chief Executive Officer, you may begin your conference.

Good morning, ladies and gentlemen, thank you for joining us. I'm Tony Marino, President and CEO of Vermilion Energy. With me today are Mike Kaluza, Executive Vice President and COO; Lars Glemser, Vice President and CFO; and Kyle Preston, our Director of Investor Relations. I'd first like to refer to the advisory on forward-looking statements contained in today's news release. These advisories describe the forward-looking information, non-GAAP measures and oil and gas terms referred to today and outline the risk factors and assumptions relevant to this discussion. During this call, I'll provide you with an overview of our second quarter 2018 financial and operating results and updated guidance. The most notable event during Q2 was the acquisition of Spartan Energy, which was announced on April 16 and closed on May 28. This was the largest acquisition in Vermilion's history. The integration of both the assets and employees has progressed extraordinarily well. We're excited about the opportunities that these assets bring to Vermillion, and we're even more delighted with the creativity and capability that the former Spartan staff brings to our company. With respect to organization, we have combined the legacy Vermillion positions in Saskatchewan with the new larger set of Spartan assets and reformed this position into 4 geographically based asset teams. These asset teams have integrated geoscience, engineering and production disciplines. So that they are self-contained technical entities, fully capable of developing the assets in each of the 4 areas. 3 of the 4 asset teams are led by former Spartan technical professionals and 1 by a technical professional who was already with Vermillion working Saskatchewan. Although it has only been 2 months since we closed, we've already begun identifying additional development and production optimization opportunities within the asset base, beyond those, which we recognized at the time of…

[Operator Instructions] Your first question comes from Brian Kristjansen from Macquarie.

Can you quantify the impact to the core production in the quarter that was due to the electrical interruptions?

Brian, I'll turn that question to Mike Kaluza, our COO.

Brian, thanks for the question. Yes, it was -- the majority of it [was decline], so it was only several hours that shut that down so -- probably on the order of 100 barrels per day.

[Operator Instructions] Your next question comes from Greg Pardy from RBC Capital Markets.

Maybe just to continue on just with a few of the operational questions. Tony, with the -- with Australia now done in terms of the workovers, how much should we be thinking about that bouncing back to -- I mean, I know where it's -- maybe it's 4,000, 4,500, 5,000 barrels a day, just trying to get a feel there?

Yes, with the workovers, they're probably running about -- our run rate should be on the order of probably 5,300 to 5,500 barrels a day is what we're looking at when we get those fully optimized.

Okay, great. Okay. That's helpful. And then with Corrib then, you mentioned that the decline is consistent with your expectations. Is that still about a 15% annualized rate?

Yes. We do a -- this is Tony, answering this one. We do a pretty detailed numerical reservoir simulation taking all this pressure in production data that we get from the individual well. So we can do a pretty accurate match of the data, we got a real detailed geologic description from the various 3Ds that have been shot and the core data and log data that we have in the field. So that reservoir simulation shows an average decline as we go forward of about 15%. It bounces around a little bit each year but some years are a little lower, some years are a little higher but yes, it's an average of 15% and that hasn't changed.

Okay. And maybe just the last one for me, I guess what did jump out just a little bit was just the oil, gas mix in Canada. Can you -- I think you mentioned you -- your activity was limited on your lands, to begin with. But can you give us an idea just how those numbers would have shaken out the way they did? And this is -- someone was asking, is this kind of the new norm? [Interest kind of] oil, gas mix ex the Spartan properties?

Yes. Greg, we noticed that in your comments this morning that came out after we released. For us, really, the oil, gas mix in Canada wasn't different than what we had expected. The -- I don't think in general it's a whole lot different than maybe the consensus estimates. We have -- perhaps there's some fluctuation that was introduced by having Spartan come in mid-quarter but we're just not aware of anything that is different in the proportion of oil and gas in Canada versus where we had expected to be.

[Operator Instructions] Your next question comes from Jason Frew from Crédit Suisse.

Tony, I just wondered if you could clarify the $70 million CapEx increase? Is that -- did I hear you say that's largely Australia pretty much, just minor from FX? If could you clarify that. And then secondly, could you just give us some additional color on any reallocation and production mix for 2018? Just how you managed that?

Okay. On the first one, the $70 million change, so between $5 million and $10 million was due to FX. So I think, if I remember correctly, $6 million, $7 million FX versus the original budget. The remainder is the Australian drilling program. We did have a few million that we planned already this year that was going to be invested to prepare for next year's drilling and that's why that total doesn't put to a number in excess of $70 million. The second question on the production mix, we've outlined in the new corporate presentation, the estimates by business unit shown graphically in there, for example, for the Netherlands, we'll be down about 2,000 boe/d from the original estimates that we had made, putting us at a level that is above last year's but about flat with where we were in '16. And that Netherlands' production is made up by additional production in primarily in Canada. We've adjusted all of the business units for the latest estimates but that is mainly the shift that you get in the mix as a result of the permitting in the Netherlands.

And your next question comes from Darren Engels from GMP.

Tony, quick question on the capital program, with the acceleration of the capital spending in Australia into Q4 this year, can you give us a sense of what 2019 capital spending is going to look like now?

We haven't guided to 2019 yet, Darren, we're working on the budget, trying to take into account the projects that are available to us now with having Spartan in the portfolio. What doing Australia this year will do is take that chunk of capital that would have otherwise been invested in '19 and just taking it into '18. And at the same time, generating a 2-year savings of about $12 million, but we are -- we don't have an estimate yet for next year that we're willing to release.

And your next question comes from Sanjeev Bahl from Edison.

Tony, just one question for myself. Canadian units OpEx clearly has gone up once you've included the Spartan assets. So I was just wondering what we should expect for the full year? Are there any synergies that could potentially bring these down over time?

Yes. In fact, there are quite a few synergies and reductions I think that will occur out of the Spartan assets. We've -- we've got a few ones that occurred just in administrative areas before I get to the field operations but -- for example, we're capable of generating about $2 million a year just out of different marketing arrangements, consolidated insurance for the company is probably about another $0.5 million a year. G&A items like reserve evaluations are about $0.5 million a year. Now, this is out of the -- these are not part of the very basic production operation consolidations and improvements we think we can make. And that number with respect to the OpEx on the Spartan assets would be probably a reduction of about $2 to $3 per boe over time. That's what we think we can achieve. Doesn't all show up immediately but it's something that we're pretty confident we will get.

And there are no further questions at this time. I'd like to turn the call back over to Mr. Marino.

Thank you, again for participating in our Q2 conference call. We look forward to speaking with you again after our Q3 2018 results and 2019 budget release in October.

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