Ladies and gentlemen, thank you for standing by. Welcome to VAALCO Energy Fourth Quarter 2015 Earnings Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to our host, Investor Relations Coordinator, Mr. Al Petrie. Please go ahead..

Thanks, Janet. And on behalf of the management team, I welcome all of you to today's rescheduled conference call to review VAALCO's fourth quarter and year-end 2015 operating and financial performance. After I cover the forward-looking statements, Steven Guidry, our CEO, will review key highlights of the fourth quarter and full year 2015.

Following Steve's comment, Cary Bounds our COO will then review operational results in more detail and our plans for 2016. Don McCormack, our CFO, will provide a more in-depth financial review and 2016 guidance. Steve will then return for some closing comments before we take your questions.

During our question session we ask you limit your question to one and a follow-up. With that let me proceed with our forward-looking statement and comments. During the course of this conference call, the company will be making forward-looking statements.

We caution you that any statement that is not a statement of historical fact is a forward-looking statement.

Forward-looking statements are those concerning VAALCO's plans, expectations, future drilling and completion activities, expected capital expenditures, sources of future capital funding and liquidity, future strategic alternatives, prospect evaluations, negotiations with governments and third parties, reserve growth and other operations.

Statements made during this conference call that address activity, events or developments that VAALCO expects, believe or anticipates, will or may occur in the future are forward-looking statements.

These statements are based on assumptions made by VAALCO based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.

Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond VAALCO's control. Investors are cautioned that forward-looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements.

VAALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on forward-looking statements.

These and other risks are described in yesterday's press release and in the reports we filed with the Securities and Exchange Commission including the 2015 Form 10-K filed yesterday afternoon. Please note that this conference call is being recorded. Let me now turn the call over to Steve..

Thank you, Al. good morning everyone and welcome to our fourth quarter 2015 earnings conference call. Before I discuss our quarterly results, let me begin by welcoming Don McCormack as a speaker on our call today. Don joined us last November as CFO and we have certainly kept him very busy since then.

On an equally positive note we received full payment including interest of $19 million from our Angola block 5 partner which required us to delay the filing of our 10-K and earnings release and this call by about 48 hours. We apologize for any inconvenience that may have caused but it certainly was a good problem to have.

On the call this morning we will represent an updated investor handout that has been posted in the presentation section of our website under the Investor Relations tab.

In early 2016 we completed our multi-year off shore development program that included the design, construction, installation and commissioning of two new eight block platforms, drilling of 3 development wells from each of those new facilities and a work over program to replace sound hold equipment on the wells of Avouma platform approved by VAALCO and out partners in 2012 in a very different oil price environment, it was by far the largest scale expansion program VAALCO has ever undertaken.

We are very pleased with how our project has been executed on that program and the overall production results that we have achieved. We reversed our production decline in 2015 and achieved our highest net production since 2012.

As we listed in the release, those results included floating and under-developed fault block in the Etame field adding new Gabon production that continues to exceed expectations in the previously undeveloped southeast Etame area and initiating an industry first Dentale production and offshore Gabon from two different horizons which increased the prospectivity of productions from the Dentale and other areas on our block.

As part of a new field development plan we have identified 17 future drilling opportunities on our Etame block. Unfortunately, these projects are not economic in the current low oil price environment. Cary will talk in more detail about what we learnt in the drilling program and how this has led to a number of these future opportunities.

The Transocean rig we had contracted in early 2014 was scheduled to work for us from late 2014 to early summer 2016. After further significant decline in oil prices late last year, we decided to release the rig after the work over program was complete and are negotiating the remaining cost under the contract.

Our focus is on strengthening our balance sheet before we initiate any further drilling campaigns. We saw the benefit from the Gabon production -- drilling program in the production and sales volumes we have reported in the fourth quarter.

Our production of 4,876 barrels of oil equivalent per day was up slightly from the third quarter of 2015 and 32% from the fourth quarter of 2014 and above the mid-point of our fourth quarter guidance.

On Slide 13 in the investor presentation, you can clearly see that the fourth quarter production was up about 2,350 barrels of oil per day were achieved from the drilling of work over program compared to where we would have been producing without the production. Don will review our guidance for 2016 in more detail later in the call.

Following the maintenance turnarounds that was completed February, we are seeing further production volume growth so far this year as we benefit from our successful work overs, as well as from improved field production throughput.

Over a 10-day period following the full field ramp up, gross production from the field averaged over 20,000 barrels a day and 5,000 barrels a day net. While production and sales volumes were strong in the fourth quarter 2015 prices declined yet again.

If you look at Slide 14, you will see an updated listing towards the end of 2015 along with our expectations for the first quarter of this year. As you saw in the listings that were posted on our websites, February sales volumes declined due to the FPSO turnaround when production was shut in for about six days.

We expect the March gross listing to be in the range of 580,000 to 620,000 barrels of oil. Turning now to cost, we continue to take steps in the fourth quarter and earlier this year to further reduce our production costs and G&A expenses. We saw a portion of the impact from these actions in 2015 and expect full year benefit in year 2016.

Regarding production expenses Cary’s team did an excellent job last year achieving approximately $8 million in gross field level operating costs savings through reductions in helicopters, boats, and personnel, chemical without sacrificing safety or the environment.

As shown on Slide 17, ongoing lease operating costs including work overs and crude sweetening project or CSP cost declined 32% to $18.78 per BOE in the fourth quarter in 2015 compared to $27.43 per BOE in the same quarter of 2014.

These unit costs reduction have been delivered despite the doubling of infrastructure with the two new platforms and five new wells. Cary’s and his team have reduced and will continue to reduce cost in early 2016 with our Gabon development project now behind us.

On the SG&A front, we took major steps in 2016 to significantly reduce our cash G&A deposit. We recently had another round of layoffs in our corporate office in Houston and our staffing level there is roughly 40% lower than it was last July.

A combination of employee separations, reductions in cash incentive compensation and board fees results in a cost savings of approximately $3.7 million net to VAALCO. We will continue to look for additional opportunities to lower our personnel costs.

Overall in the fourth quarter we generated positive adjusted EBITDA of $1.2 million despite the 23% decline in oil prices. Our efforts to reduce our cash operating cost and our cash G&A per BOE have helped bring down our cash break even significantly as you can see on Slide 12.

We are working to get it even lower to be prepared if prices will fall to new lows again or stay at the present levels for an extended period. Turning to our capital expenditure program in the fourth quarter, we invested $11.9 million which brought our whole year total to $87.3 million on an accrual basis.

With our offshore Gabon drilling campaign complete and the rig released, we expect our 2016 capital program to be dramatically lower as $3 million to $6 million which is comprised primarily of maintenance capital. We do not plan to drill any wells in 2016 in any of our concession areas.

Even if we see an upshift in oil prices we don’t expect our plans to change as we are laser focused on shrinking our balance sheet and bolstering our liquidity. In regards to year-end reserves about 75% of decline in reserves was related to the decline in oil prices.

We believe that these volumes are likely to be re-classified as crude once oil prices recover sufficiently. Now let me turn the call over to Cary for a more detailed review of these reserve revisions as well as an update on our operations..

Thank you, Steve. The industry downturn we are facing has created challenges in every area of the E&P business however, VAALCO has achieved tremendous success in our operations over the past year and I will spend the next few minutes reviewing our results.

Let me start by going into more detail on the successful outcome of our 2015 drilling and work over program. We drilled and completed five producers in 2015 without encountering hydrogen sulphide in any of the wells.

The addition drilling validated our belief that the hydrogen sulphide is localized and appears to be limited to Ebouri field and a portion of the Etame field.

Again, let me stress we have found no other evidence of hydrogen sulphide in any other fields on the block which includes two new fields brought online in 2015 those being southeast Etame and North Tchibala fields.

I also want to mention that all five wells were drilled from our two new platforms Etame and SEENT and both platforms started up with no operational upsets and no mechanical constraints or other issues often seen on startups.

As shown on Slide 24, the first two wells drilled in 2015 will be Etame 10-H and Etame 12-H wells from the new Etame platform and both wells targeted the under developed Etame 1-V fault block adjacent to the Etame field main fault block.

Performance from the atomic oil based well is exceeding expectations which indicates there may be additional development required to fully exploit the 1-V fault block. As always, we are closely monitoring the performance of the 10-H and 12-H wells and we are updating our models to optimize future drilling locations.

As shown on Slide 25, the third well drilled and completed in the program was the southeast Etame 2-H which targeted an undeveloped Gambon reservoir from the new SEENT platform.

This southeast Etame well has proven to be one of our strongest producers with production rates continuing to hold at approximately 3,400 barrels of oil per day at a stabilized bottom hold blowing pressure with no signs of water production.

We are also very proud that our 2015 North Tchibala drilling established the first Dentale production for the industry in the offshore waters of Gabon in two different formations. The first Dentale well drilled was the North Tchibala 1-H well which targeted the Dentale B-9 formation.

The well continues to flow naturally and productions remain steady at approximately 1,750 barrels of oil per day while maintaining GOR at stabilized levels with no water production. Our second Dentale well drilled was the North Tchibala 2-H which targeted the Dentale D-18/19 formation.

Production from North Tchibala is stabilized with approximately 600 barrels of oil per day. Based on our analysis of pressure data and open whole logs we believe the well is capable of producing at much higher rate for this constraint due to formation damage.

Work is underway to determine the root cause of the formation damage and to identify the opportunities to alleviate the damage. The results from our successful 2015 development drilling campaign fuelled our efforts to identify additional development opportunities in both Gamba and Dentale across the Etame block.

As I mentioned earlier, the strong performance from the Etame 12-H block indicates there may be additional drilling locations at the Etame field. Also the strong performance from the southeast Etame 2-H well has given us higher confidence in several other undrilled combo structures on the block.

And of course our successful Dentale well North Tchibala has given us optimism about Dentale potential. The map in Slide 28 in the investor handout shows other areas on our block where we think there maybe potential Dentale resources of approximately 150 million gross barrels of oil in place.

Based on what we learned from our drilling campaign, we now have an inventory of 17 appraisal and near field step out drilling locations across the block. The map on Slide 27 in the investor handout shows these perspective areas which may contain up to 65 million barrels of gross un-risked recoverable oil resources.

We are working to further define the opportunities shown on the map and finalize a development plant that will balance risk and resource potential in the right commodity price environment.

However, it will take additional drilling along with long term monitoring of the new wells before we have a clear understanding of the open list potential on the block. At the completion of the 2015 development drilling campaign, we initiated our 3-well workover program.

The objective of the workover program was to replace electrical submersible pumps, or ESPS as we like to call them, in three wells on the Avouma platform.

The first workover enabled us to restore production from a well that was offline due to an ESP failure and the second workover allowed us to increase production from a well where rate is declining due to mechanical degradation of an ESP. The last workover was on a well that was not producing and the workover was suspended due to mechanical issues.

I'm pleased to say that the workover program added incremental production of over 2,200 barrels of oil per day gross with 540 net barrels of oil per day. I would also like to briefly mention the field live turnaround that occurred during February.

We performed our plant maintenance turnaround for the FPSO and four platforms on schedule in just under 6 days on budget and with no environmental or safety incidence. Following the quick turnaround, we were able to successfully restore production at full capacity.

In fact the field came back online at rate higher than pre-shutdown level into removal of constraints and efficiency gains accomplished during the planned shutdown. The preventive maintenance work performed during the planned shutdown was also key to insuring overall asset integrity and reliability.

We made asset integrity a priority in 2015 and it is paying off with impressive reliability numbers. On Slide 20 you can see that in 2015 we experienced unplanned downtime of less than 1% which allowed us to deliver the strong production we realized during the year.

In addition, the preventive maintenance work mitigates costly major repairs that can occur when preventive maintenance is neglected. I would now like to move away from our producing assets and briefly discuss the Crude Sweetening Project, our project in Equatorial Guinea, our on shore Gabon project and Angola.

Well, our engineering efforts identified over 15 potential solutions for the removal of hydrogen sulfide from the affected wells at Ebouri and Etame. None of these solutions are economic in the current low oil price environment. We remain committed to developing the seller resources that need help with oil prices to allow the project to proceed.

Development of our discovered resources in Equatorial Guinea and onshore Gabon are opportunities which remain available to us. However, there are no plans to advance these projects in 2016 due to the depressed commodity pricing environment.

As oil prices recover to levels that support the economics for these projects, then we'll evaluate all of our options. As we have mentioned we are focused on strengthening our liquidity until we see a sustainable improvement in oil price. Turning our attention to Angola.

We opened a data room in London to seek the sell down a portion of our working interest in Block 5 offshore Angola. While large number of independent E&P companies and major oil companies expressed interest and reviewed the data, no offers have been received today which we again attribute primarily to depressed prices.

I would like to briefly talk about the movement in our overall proven reserve base from year-end of 2014 of 8.5 million barrels of oil equivalent to yearend 2015 of 3 million barrels of oil equivalent.

As was the case with many companies at yearend 2015, a material drop in crude oil prices was the primary driver behind the reduction in reserves and accounted for approximately 75% of the total decrease in our proven reserves.

As shown on Slide 15, 1.4 million barrels of reserve deductions came as a result of reclassifying salary reserves to resources due to the sub-economic returns for crude sweetening in the current commodity pricing environment.

Another 2.7 million barrels of reserve deductions was due to low prices shortening the economic life of our producing field and also the reclassification that proves an undeveloped reserves to probable.

Our 2015 production accounted for another 1.7 million barrels of reserve reductions, and all of these reductions were partially offset by performing conditions totaling 300,000 barrels of oil.

Finally, I would like to wrap up the operations update by talking about field level cost deductions that were put in place in 2015 as well as our plans for additional reductions in 2016. This past year we implemented sustainable reductions by changing how we run our operations and finding ways to do more with less money.

Note that all of the cost reduction announced that I'm discussing are gross figures and VAALCO'S net shares approximately 30%. As you can see on Slide 16, the majority of the savings we have captured are related to transportation and people. We have saved money on helicopters by renegotiating our rate and operating more efficiently.

We have also realigned our workforce to fit our current activity level which has shifted from platform installation and drilling to production operations. In 2015, we captured a total of $8 million of savings from these and other initiatives.

We are continually looking for ways to add value by reducing cost, and in 2016 we are targeting an additional $6 million to $10 million in gross cost deductions. Again, by doing more with less and focusing on operational efficiency we were able to increase profit margins with the component that we can impact the most our cost.

None of these cost reductions have impacted our asset integrity programs, safety programs or environmental performance, and we are proud of the strong safety culture we have built. In fact, VAALCO did not have a single recordable incident in the second half of 2015 and we have carried that into 2016 with nearly nine months now without an incident.

To close out, I want to emphasize that we are very focused on conducting our operations in a cost-effective manner while we optimize production without compromising safety, the environment or the integrity of our assets. With that, let me now turn the call over to Don for our review of the financials..

Thank you, Cary. It is a pleasure to be joining you this morning. I'm pleased to be part of Steve's executive team and looking forward to meeting with our shareholders and analysts in the coming months. We filed both our Form 10-K and earnings release yesterday evening. Today I will be covering earnings release.

The updated investor deck on our website also has additional financial analysis and comparisons that should be helpful. I will keep my comments brief, hit the highlights and try not to repeat everything available in our release.

Our Q4 production came in at 4,876 barrels of oil equivalent per day which was above the guidance midpoint of 4,600 to 5,000 of oil equivalent per day. However, the benefit of higher volumes generate through our drilling program was more than offset by lower oil prices which dropped 23% during the fourth quarter of '15.

We reported an adjusted net loss of $13.6 million, or $0.23 per diluted share which excluded $52 million non-cash impairment charge related to the offshore Gabon block. Other non-cash and/or non-recurring items excluded totaled $19.8 million and are detailed in earnings release on Page 12.

The items comprising the total include retail impairments, equipment ride off, shareholder matters and cancelling the Crude Sweetening Project or CSP where Steve mentioned earlier. Our GAAP net loss was $80.8 million, or $1.38 loss per share for the fourth quarter.

Looking ahead to 2016, production has increased because of the '15 development program and the successful workovers that Cary described. The other contributing factor was the successful field maintenance turnaround which occurred in February that Cary also described.

Keep in mind that the entire complex was shut in for about six days and so that obviously impacts our quarterly guidance. We estimate that our net production for the full year 2016 will be in thre range of 3,700 to 4,500 barrels of oil equivalent per day, with the first quarter being in a range of 4,600 to 4,800 barrels.

Our guidance is detailed on Slide 37 in the deck posted on our website. Turning to expenses, we are pleased that most of our expenses came in below the guidance, the exception being production expense, I will go down on that production expense component and provide more details if you hear Steve’s description earlier.

Total production expense for the fourth quarter of 2015 was $13.5 million which includes $4.2 million related to work overs performed in the quarter and $600,000 of non-cash cost related to the CSP suspension.

Adjusting for these items, the adjusted production expense totals $8.7 million or on a per BOE basis its $18.78 and that is based on sales volumes. And that’s compared to $23.43 for BOE in fourth quarter 2014 which also excludes leftovers and then $19.36 per BOE in the third quarter of 2015.

The decrease in the expense per BOE year-over-year is attributable to cost reductions in contract services, materials and operational efficiencies combined with increased volumes.

For the full year 2016 in Q1, as shown in our guidance we expect ongoing production cost to be in the range of 27.5 million to 32.5 million which works out to be $18 - $21 per barrel. Let’s take into account the cost cutting that Cary’s discussed.

We expect the work overs in 2016 to total to around $3 million to $4 million all of which will hit in the first quarter of 2016. Exploration expense in the fourth quarter in 2015 was $8.9 million compared to a $100,000 recorded in the fourth quarter 2014 versus $9 million in the third quarter of 2015.

And then, exploration expense during the fourth quarter 2015 was comprised primarily of non-cash undeveloped resold impairment cost, $8.2 million of the total was writing off the Angola leasehold, and another $600,000 write-off was due to the popular domed recess in Montana.

Exploration in 2016 should be minimal due to the fact that we completed our drilling program as Steve announced earlier. Digging in for the fourth quarter 2015 was $9.5 million compared to $4.6 million in fourth quarter 2014 versus $8.3 million in the third quarter 2015.

The fourth quarter DD&A rate was $20.56 per barrel however, guidance as you will see for the full year 2016 and the first quarter is in the range of $4.50 to $5.50 per barrel. This rate reflects the significant amount of impairments we recorded in the fourth quarter of 2015.

General and administrative expenses of G&A for the fourth quarter 2015 totaled $3.3 million compared to $3.5 million recorded in the same period a year ago versus $3.8 million in the third quarter 2015. As Steve discussed we have been successful in reducing corporate staff head count and lowering contract and third part costs.

We should realize the full benefits of those cost reductions in 2016 and beyond. But our ability to charge out our G&A to partners will be significantly reduced in 2016 due to the fact that we have no plans to drill wells this year.

Net G&A will increase request activity because you will charge out less as the operator of the Etame block did minimal activity. As a result our 2016 guidance for net cash G&A expense is expected to be in the range of $12 million to $14 million with non-cash totaling about $3 million.

Income tax expense for the fourth quarter 2015 was $4.2 million which is up from the $3.6 million for the fourth quarter 2014 and up from the $2.7 million in the third quarter 2015. The increase in income taxes was due to us writing off $1.3 million in the third year taxes which is a non-cash item and that hid in the fourth quarter 2015.

Turning to our balance sheet, in 2015 we invested $87.3 million in capital expenditures on accrual basis. As Steve discussed our guidance regarding capital expenditures in 2016, once again is expected to be dramatically lower with the range being somewhere in the $3 million to $6 million range.

Cash and cash equivalents on our balance sheet total $25 million at December 31, 2015. This excludes $15.8 million that is classified as long-term restricted cash. $15 million of that $15.8 million is related to the three wells commitment we have in Angola.

Speaking of Angola, as Steve mentioned we collected $19 million from our block 5 Angola partner this week. This paid in full all amount outstanding as of December 31, 2015. The total included $3.2 million in interest income that we had not built but had elected -- excuse me that we had built but had elected not to report.

Obviously this collection helps to bolster our liquidity and positions us to whither the depressed commodity cycle we are in. That’s all I have, I will turn the call back over to Steve now..

Thanks, Don. As we complete our most recent development plan I would like to reflect just briefly on VAALCO, who we are and what we have accomplished and how we can continue being proactive in this very challenging environment. VAALCO has built an excellent reputation as a proven operator with a track record of success in West Africa.

We have safely and successfully executed multiple development programs and have a history of strong co-operation with both government and local partners. We have the expertise and the operational capacity to execute on organic development opportunities and acquisitions.

The company has assembled a knowledgeable team ready to execute on a broad range of growth options. We have been proactive in this challenging environment and remain focused on lowering our costs maintaining our production, preserving our cash and exploring our optionality.

We have a clean balance sheet with only $15 million in debt and $25 million cash on hand at year end 2015 and as you heard earlier it is all in our releases earlier this week as Don just reported, we did collect $19 million from our Angola block 5 partners.

This further enhances our liquidity and expands our options during this very difficult time in the industry. We continue to optimize production and look for opportunity to look for cash flows. Through all of these accomplishments we continue to examine organic growth opportunities.

Aided by the success of our 2015 development program as Cary reported we have identified 17 additional development and near field step up wells in the Gamba and Dentale formations. We also have opportunities to develop existing discovered resources onshore Gabon at Gamba and offshore Equatorial Guinea, both already in our portfolio.

With an increase in oil price we have an upside to our reserves with these organic development opportunities. While prices have risen recently, we continue to actively pursue a wide range of options and opportunities and as we announced at the end of January we are actively looking at strategic alternatives to further enhance shareholder value.

This encompasses multiple options including securing additional investment to bolster liquidity, to fund attractive future development options, we are also considering joint ventures, asset sales or form outs as well as the sale or merger of the company.

We believe VAALCO has the right structure in place to consolidate and operate a broader portfolio of assets. We have the right management team and the board in place to capture potential upside value in the current market.

Speaking of the Board, I'd like to welcome our two newest members Michael Keane who is our Vice Chairman and Chairman of the Strategic committee and Mr. John Knapp.

Their many years of experience will further enhance the breadth and depth of our board which is actively involved in our strategic review process and working closely with management to help us navigate through this challenging environment. In their short tenure they have already have a positive impact on the company.

In summary, I would like to emphasize the energy level and the sense of urgency demonstrated by every member of our team. We continue to safely achieve strong production results, lower our overall cost structure and focus on preserving cash.

We have an opportunity to dramatically impact our future and we are pursuing many options to unlock an enhance shareholder value. Thank you. And with that Al, I think we are ready to take questions..

Okay Janice, we are ready to start the Q&A..

[Operator Instructions] Our first question comes from the line of Matthew O’Connor with RBC. Please go ahead..

Yes, hi it’s actually Don Cusan [ph] from RBC. Just wanted to get your insight on the capital raising aspect of the strategic review plan.

Can you prioritize for us how you're thinking about that now in terms of what would be your first choice and your second choice or your third choice about how you see that proceeding?.

Thanks for the question, Don. I think it's fair to say that our perspective on Friday versus our perspective on Monday are very different.

Given that we've received the boosting liquidity from the payment of the outstanding balance from our partner in Angola, and with that, that sort of causes us to rethink kind of what we thought might be our priority in terms of capital raise.

So I would say right now that the full basket of options is still open, and it's really too early for us to say what that real priority would be..

And the other question I had was on the CapEx for the year.

I thought I heard that workover expenses would be $3 million to $4 million and that was going to take place either substantially or entirely in Q1, is that right?.

Yes, Don. We expect all of those costs in Q1 on the OpEx. But to be clear, OpEx does not, the workover is an operating cost item, whereas CapEx is separate from the operating cost. So most of our CapEx will be as I said in maintenance capital for items in the field primarily on the FPSO that we'll be doing this year. So, those two are separate items..

Okay.

And last question, can you just review how much money the company spent in the construction of the platform and how that's being valued at this time for balance sheet purposes?.

Yes, I would have to probably give you a range. But let me ask Don to maybe provide some color on that..

Yes, I mean, thanks Steve. Yes, if you look at our impairment you'll see what we impaired in 2015.

There is roughly 81 million I believe, and so we value our reserves based on the SEC pricing which is going back in '15 we've taken the first day of the month for all 12 months of '15 and averaging that and applying that trial reserves and you come up with what the value is, it's in our 10K, and then you compare that to what your property plant and equipment balance is at that time and you write down your assets to, it's about $12 million I believe.

But I don't -- we valued the property plant equipment. I think we've got our Chief Accounting Officer here, she's telling me it's about $100 million on the platforms, net..

About $100 million spend is currently valued at about $12 million for balance sheet purposes?.

That's correct..

That's $100 million and everything else, all the wells drilled, everything..

Yes, that's all in..

That's all in. Okay..

For development..

Yes, okay. Very good. Thank you..

[Operator Instructions] Our next question comes from the line of Bill Develam [ph] with Titan Capital Management. Please go ahead..

Thank you. A couple of different questions. First of all, you've given us either reduction in cost that you have instituted through the fourth quarter. You said you've instituted further cost reductions here in the first quarter.

So, I guess the question is what was your breakeven point at the end of the fourth quarter and what is the breakeven point of the company today on oil price basis please?.

Yes, Don. I mean, Bill, thank you for your question. We have a slide in our deck that addresses that current breakeven, and so you can see it. We've demonstrated it as the breakeven at the field level, so just taking into account field operating cost and taxes, and that's on Slide 12 by the way.

And then they also demonstrate what our breakeven cost is today at the corporate level which adds to that cost, our G&A and our interest expense, and so you get a sense for how it plays out. On the operating breakeven side, we estimate it to be just on $25 a barrel realized.

And on the corporate level we're estimating it to be right at $31 a barrel realized.

Now those costs to be clear do not include the non-recurring cost that we expect to incur this year which include the workovers, the asset retirement obligation and the cost that we will eventually pay on the rig release, the money that we're currently negotiating with Transocean on in terms of the money under the existing contract for the period of time that we did not use the rig..

Understood. I had missed that slide. Thank you.

And so, with our current $40 oil price that we see this morning, you should be in the block, if you would have had that for the full first quarter?.

Right, that's what our analysis suggests. That's right. After those non-recurring cost..

And we got a differential too I might add, Bill, just to keep in mind. So if you see Brent trading at 41 we're not realizing 41. We can't afford a $5 differential on Brent. So, keep that in mind as well..

Great. Thank you. And then I'd like to shift to Angola. Given that your agreement goes through to 2017 and you won't be drilling any wells in '16 anywhere on any of your properties, that timeline is reasonably tight for a three-well commitment.

So talk to us if you would about how then Angolan government is looking at the situation particularly in light of them finally writing a check now.

What do you view that, what do you view the various options to be in Angola for you?.

We have already had conversations with the government about a potential extension, and I believe that to be at the stand right now the most likely result is to extend the license beyond November 2017. And it's a bit of a new ops but I will tell you that the contract requires that the third well be spud prior to November 30, 2017.

So essentially you've got a little more time than maybe one would first think, but not a lot. You're right.

And so right now our goal is to get an extension and get additional time, and part because if you look at the history of Angola, and I know you've followed it, we're in a situation where in not by our own doing but by some delayed that were caused by our loss of partner, the slow process that we went through to get the government to rename the new partner and some other things that have occurred that have caused the delays.

When we meet with the government we're very clear that we're in the position where in by no fault of our own, so we think we're in a good position to be able to convince them to extend likely..

And as you point out, those delays have been significant.

I mean, by my recollection, probably somewhere in the neighborhood of two and a half years, if you tie in the various delays, is the Angolan government amenable to an extension of that magnitude?.

It remains to be seen. I can tell you they were amenable to considering an extension, I can't really speak to how much of an extension they might be willing to grant. But, if want at all, but certainly when we talked to them it was something that they encouraged us to do to apply..

Thank you..

Thank you, Bill..

There are no further questions on queue. Please continue..

Okay. Thanks everyone for participating in the call, and we're looking forward to talking to you. If you have any further questions, feel free to give us a call and we'll talk to you for the next quarter. Thank you..

Ladies and gentlemen, this conference will be available for replay after 11 am today through April 17, 2016 at midnight. You may access the AT&T teleconference replay system at any time by dialing 1-800-475-6701 and entering the access code of 389345. International participants dial 320-365-3844.

Again, those numbers are 1800-475-6701 and 320-365-3844, access code 389345. That does conclude our conference for today. Thank you for your participation and for using the AT&T executive's teleconference. You may now disconnect..