Greetings and welcome to W&T Offshore Incorporated Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today’s call, Lisa Elliott. Thank you. You may begin.

Thank you, operator and good morning, everyone. We are glad to have you join us for W&T Offshore's conference call to review the financial and operational results for the second quarter of 2017. Before I turn the call over to the Company, I would like to remind you that information recorded on this call speaks only as of today, August 4, 2017 and therefore, time-sensitive information may no longer be accurate as of the date of any replay. Also, please refer to the Company’s second quarter of 2017 financial and operational results announcement that WT released yesterday for a disclosure on forward-looking statements and reconciliations of non-GAAP measures. At this time, I'd like to turn the call over to Mr. Tracy Krohn, W&T's Chairman and CEO.

Thanks, Lisa. So, good morning, everyone and thanks for joining us today. With me this morning is, Tom Murphy, our Chief Operations Officer, Danny Gibbons, our Chief Financial Officer and Stephen Schroeder, our Chief Technical Officer as they will be available to answer questions later on during the call. So, before we review our second quarter results, I’d first like to update you on the Ocean Energy Management issue which we expect to have completely resolved in a few weeks. On June 28, the BOEM filed a Motion with the Department of the Interior to rescind its four orders issued in 2016 that instructed us to provide additional supplemental bonding of $260.8 million. And on June 31 – excuse me July 31, the DOI demanded the orders back – or excuse me remanded the orders back to BOEM which is the first important step to the BOEM reversing or rescinding the bonding requirements. So we anticipate that sometime this month necessary steps will have been taken to allow the BOEM to rescind the orders. When this does occur, we will make an announcement accordingly and hopefully put this behind us. So we are very pleased with both our financial and operational results in the second quarter. Production was in line with our expectations and was up modestly from last year’s second quarter and from the first quarter of this year. We produced 3.9 million barrels of oil equivalent or 43,848 Boe per day. Oil and liquids represented about 58% of production which was also up slightly. Undoubtedly, we’ve continued to drive down our lease operating expense, or LOE rather which declined $5.1 million or 14% compared to last year and down $8.6 million or 22%, compared to the first quarter of this year. We’ve been very successful at reducing our…

Thank you. [Operator Instructions] Our first question comes from Richard Tullis with Capital One. Please proceed with your question.

Hey, thanks, good morning everyone.

Good morning, Richard.

Tracy, it sounds like good news potentially on the way from the BOEM. Once that order would be rescinded regarding the supplemental bonding, where do you expect total bonding cost, say in 2018 to be versus what it is currently? Any change there?

No, no change. We might actually see a reduction in it.

Okay, good, good. From a follow-up, WT has done a good job over the years of drilling the sub-salt wells at Ship Shoal, do you see the opportunity to kind of transfer that success and knowledge to other fields where you have sub-salt prospects?

Absolutely.

Could you elaborate a little bit? Do you expect to start drilling some of those, say, in 2018? And where might those be?

We are a little bit variable on the timing right now as we get a little bit close to that, I will be able to reveal that to you. We are keeping that a little closer to this right now.

All right. Thanks a bunch.

Thank you, Richard.

Our next comes from Aloke Agarwal with Phoenix. Please proceed with your question.

Tracy, Danny, great quarter all around. Now that, now levels are back up, how are you guys thinking about the capital structure? You have these 2019 bonds coming due and in the past, you had talked about an exchange. I was just curious what you think here?

I don’t know exactly. I don’t recall exactly what I talked about in regard to an exchange on the 2019 bonds, I believe that’s exactly correct. I expect to generate enough cash to paying off.

Excellent. That’s good news and just as a quick follow-up, on the last call, I believe you had talked about 2017 plugging an abandonment coming in a little bit lower. It’s not still the case?

Yes, I think so. Hopefully, we don’t have too many storms out here and we should be pretty close to our estimate if we have some more storm activity then naturally that will get - that will be a little bit volatile, it will be deferred into the following year.

And my last question is, just on the tax refund, the $69 million, is that expected to come in next year?

Yes.

Thanks for taking all the questions. Good luck

Good.

We do have another question. It’s from Richard Tullis with Capital One. Please proceed with your question.

Yes, Tracy, I thought I jump back in.

Sure.

As oil prices get closer to $50 and you are generating more margin here. What do you see on the horizon for drilling more high potential deepwater exploration wells? What sort of oil price do you look for to maybe start taking on that higher risk?

Well, again, it’s so much the price, it’s the margins, Richard. Nominal dollars are important, but clearly what we want to have is margins. So drilling costs are going down, but fortunately with the price or they have been in the last couple of years. So, we think about it more as a margin investment and total capital improvement we have. Of course, we are working on the Zillion acquisition fund as well. So that will assist us in our average.

All right. And then just lastly Tracy, looking out to 2018, I know your plan is – planning process is still little ways off, but what’s on a drilling budget do you think it would take to keep production flattish in 2018?

I am not sure yet, Richard. I don’t have that answer. That’s a very good question. We are in the middle of that budget and of course, it will depend upon the success that we have for the remaining years. So, it’s a little premature to give you an answer and I don’t want to give you wrong and so others pile on that a little bit.

All right. Well, that’s all from me.

But keep asking, because I keep wondering what’s that going to be myself.

All right. Thank you.

Thank you, sir. All right, operator, we appreciate.

There are no further questions.

Okay, we appreciate it and we will be in touch with the markets here in the next quarter or if not soon. Thank you very much.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.