Geoff Rochwarger – Vice Chairman and Chief Executive Officer-Genie Oil E&P Michael Stein – Executive Vice President and Chief Executive Officer-Genie Retail Energy Avi Goldin – Chief Financial Officer.

Aaron Shafter – Great Mountain Capital.

Good morning, and welcome to Genie Energy's Third Quarter 2016 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 its presentation, Genie Energy's management team will discuss financial and operational results for the three month period ended September 30, 2016.

Any forward-looking statements made 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 cause actual results to differ materially from those that they forecast. During their remarks, management may make reference to adjusted EBITDA, which is a non-GAAP measure.

Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

Management believes that Genie Energy's adjusted EBITDA provides useful information to both management and investors by excluding certain expenses that may not be indicative of Genie Energy's or the relevant segment's core operating results.

Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, gross profit, income or loss from operations, cash flow from operating activities, net income or loss, basic and diluted earnings or loss per share or other measures of liquidity and financial performance prepared in accordance with GAAP.

The Genie Energy earnings release including a reconciliation of adjusted EBITDA to net income is available on the Investor Relations page of the Genie Corporation website, www.genie.com. The earnings release has also been filed on the Form 8-K with the SEC. Please note this event is being recorded.

I’ll now turn the conference over to Geoff Rochwarger, Genie's Vice Chairman and CEO of Genie E&P. Please go ahead, Mr. Rochwarger..

Thank you, operator. Welcome to Genie Energy's third quarter 2016 earnings conference call. On today's call, we will review operational and financial results for the three months ended September 30, 2016. I will lead off with an update on the oil and gas exploratory operations conducted by our Afek subsidiary operating in Northern Israel.

Michael Stein, CEO of Genie Retail Energy, will then review operational developments at Genie Retail, our retail energy provider business. Then Avi Goldin, our Chief Financial Officer, will discuss the quarter's financial results. At the conclusion of Avi's remarks, we will take your questions. Turning now to Afek.

During the third quarter in conjunction with our team of consultants and external experts from the industry we continue to analyze results obtained from both the drilling and well flow test programs conducted in the Southern block of our license area.

That is the portion of our license area South of the Sheik Ali Fort [ph] which runs Northeast to Southwest through the license area. In addition we have stepped up our analysis of the reprocess seismic data generated in the early 1990s and a portion of the Northern block of our license area.

This study is some of which we have completed and others that are ongoing are intended to provide us with a better understanding of the resource and subsurface conditions which will help to enhance our resource models across the license area. In light of the results of this analysis to-date we have shifted our operational focus to the Northern block.

Given current market conditions and what we know right now we do not currently see a clear path to probable or possible reserves in the Southern block in the course of the next 12 to 18 months.

In conjunction with this determination, accounting rules require that we write-off the capitalized drilling asset even as we continue to improve our knowledge of the resource across our license area.

Our ongoing analysis of the results also suggests that the resource we encountered in the Southern block is likely present at a significantly greater depth in the Northern block starting at approximately 1,250 meters as compared to an average of approximately 550 meters in the Southern block. If this hypothesis is correct.

The greater debt could have induced additional maturation of the resource possibly generating light oil. In another hopeful sign the analysis also suggest the presence of one or more potential subsurface structures. That could serve us traps to catch methane migrated oil.

Based on these findings we intend to continue our exploratory drilling program at one of the Northern block sites included in our original drilling permit approval. This site NES-10 is well suited to test our resource hypothesis. We could spud as early as the first quarter of next year but still have several local permitting hurdles to over come.

We’ve also need to complete drilling rig modifications and upgrades that will allow us to operate at the greater depths. In the mean time, we have kept our team and the drilling rig busy on a water exploration project on behalf of the maple onboard of cooperative and cooperative of agricultural settlements on the Golan Heights at our NES-12 site.

As we previously announced we provided the National Water Authority with the right to access and utilize this site after we encountered significant quantities of water there while drilling NES-12. Because the Golan Heights has suffered from a sustained drought in recent years in new water resource would be terrific news for local farmers.

Now I will turn the call over to Michael Stein to discuss this quarter’s operational results for Genie Retail Energy..

Thank you, Jeff. Let me start with the breaking news. Yesterday, we closed on the acquisition of Retail Energy Holdings, LLC., a privately held retail energy provider which operates Town Square Energy and serves approximately 45,000 electric RCEs to customers in eight states.

The purchase price was $9.5 million plus the value of net working capital or approximately $210 per RCE, which is in line with the market of this type of operations. We paid in cash and that will impact our balance sheet and other financials beginning in the fourth quarter.

Importantly for Genie Retail, Town Square significantly expanded our geographic footprint, bringing us licenses and customers in four new states New Hampshire, Rhode Island, Massachusetts and Connecticut and increases our market reach in Ohio to additional utility territories.

Town Square will also add to our existing meter base in New Jersey, Maryland, Ohio and Pennsylvania. We will continue to serve these customers under the Town Square brand and look for this acquisition to be immediately accretive to our bottom line and provide valuable operational synergies. Turning now to the quarter’s results.

Genie Retail Energy again performed well in the third quarter which includes the peak cooling months of July, August and September. RCE served at September 30 were 241,000, an increase of 2,000 from June 30. But a decrease from $260,000 at September 30, 2015.

The sequential increase in RCEs reflect impart increased average per meter consumption including the impact seasonality and other weather driven changes. Meters served decreased to 383,000 at September 30 from 390,000 at June 30 and from 388,000 at September 30, 2015. We added 58,000 gross meters in the third quarter.

The same as in the second quarter while still a little below the 74,000 meters added in the year ago quarter. Our pace of new meter acquisition continues to be impacted by the regulatory uncertainty in New York. We continue to grow in a nice clip at both Illinois and Ohio even as we see signs maturation in some markets within some of our states.

As we previously disclosed we entered the Buckeye State in the second quarter. Average monthly customer return was 6.4% in the third quarter that represents the 30 basis point decrease compared to the year ago quarter and a 20 basis point increase sequentially.

The sequential increase is no surprise, churn in the third quarter is often higher than in the rest of the year due to seasonal factors. As we have discussed in recent quarters we serve a significant customer base in New York State and therefore have followed recent regulatory initiatives by the States Public Service Commission closely.

To recap this past February, the PSC issued an order that would have imposed significant new restrictions on retail energy providers operating in New York.

Industry representatives challenged the order in state courts and in July State Supreme Court judge nullified its key provisions primarily on the ground the PSC neglected to follow the correct procedures in developing and issuing the order.

Also in July the PSC issued its second order prohibiting retail energy providers who serving customers, who participate in the states low income utilities systems programs.

Again the industry challenged the order in September; a New York State judge issued a temporary restraining order and scheduled a hearing on the industry’s request for a permanent injunction for later this month.

As I mentioned last quarter, we’re moving aggressively to mitigate the risks and meet the regulatory challenges in New York, while simultaneously diversifying our customer base to other states. As a result of these measures our business will remain healthy and profitable regardless of the outcome in New York.

Now for discussion of Genie’s third quarter financial results. Here is Avi Goldin..

Thank you, Michael and thanks to everyone listening and for joining us this morning. My remarks cover financial results for the third quarter of 2016, the three-month period ended September 30, except or indicated otherwise all comparisons in my remarks are to the results of the corresponding period in 2015.

Consisting with my approach in prior quarters, our focus on the year-over-year comparisons rather than the prior quarter’s results, to remove from consideration the seasonal fluctuations that are characteristic of our retail energy business.

Our financial results this quarter reflect a consistent results from Genie Retail Energy and the impact of reduced oil and gas exploration activity in Northern Israel. As in prior quarters, Genie Retail Energy generated all of Genie Energy’s revenue direct cost of revenues and gross profit.

In the third quarter, Genie Retail revenue increased to $57.2 million from $52.9 million in the year ago quarter. The increase was driven by an increase in kilowatt hours sold as higher average per meter consumption was partially offset by lower revenue per meter.

Higher commodity costs and more competitive pricing reduced our gross margin to 35.4% from 40.1% in the year ago quarter. Gross profit came in at a solid $20.2 million, a slight decrease from $21.2 million a year earlier. We reduced consolidated SG&A expense to $15 million from $15.9 million in the year ago quarter on lower sales and general expenses.

Research and development expense was nil, compared to $394,000 in the year ago quarter, as a result of the wind down of operations at GOGAS. Exploration expense incurred entirely by Afek's operations in Northern Israel was $1.3 million, compared to $1.5 million in the year ago quarter, reflecting the reduced scope of operations in the Southern block.

Afek capitalized just $126,000 in exploration cost, compared to $6.8 million in the year ago quarter. Also, as Jeff mentioned in the third quarter, the company wrote-off the capitalized drilling expense incurred in the Southern block to-date, just over $41 million.

We will evaluate the new plans drilling activity for the appropriate accounting treatment. Reflected with the write-off, Genie reported the loss from operations, $37.1 million on a consolidated basis, compared to income from operations of $3.3 million in the year ago quarter. Adjusted EBITDA increased to $5.2 million from $4.6 million a year earlier.

The reduction in gross profit I mentioned earlier was more than offset by reductions in SG&A expense, exploration cost at Afek and research and development expense at GOGAS. At Genie Retail, adjusted EBITDA declined slightly coming in at $8 million, compared to $8.1 million a year earlier.

For the first three quarters of the year, Genie Retail has generated $24.2 million of adjusted EBITDA, compared to $10.7 million in the first three quarters last year.

The net loss attributable to Genie common stockholders after non-controlling interest and preferred stock dividends for the third quarter was $32.5 million or $1.4 per diluted share, compared to a net income of $2.4 million or $0.10 per diluted share in the year ago period.

Based on our results for this quarter, Genie’s Board of Directors again declared a quarterly dividend in our common stock for $0.06 a share. Turning now to our balance sheet, we remain in a strong position financially with plenty of flexibility to invest new growth initiatives.

At September 30, we had $53.8 million in cash, cash equivalents, restricted cash and certificates of deposit, and $69.3 million in working capital with no debt. Before I conclude I’d point your attention to a footnote in the press release in the financial results section.

We recorded a reclassification increasing revenue and cost of revenue for prior quarters related to our treatment of gross receipts tax and also reported an additional cost of revenues for correcting an item that was previously reported as prepaid expense in the first and second quarters of 2016.

The year-over-year comparisons reflected corrected amount. That concludes my prepared remarks and third quarter’s financial results. Jeff, Michael and I would be glad to take any questions you may have for us on the business in general or this quarter’s results specifically. I’ll now turn the call back to the operator for Q&A..

We’ll now begin the question-and-answer session. [Operator Instructions] The first question is from Aaron Shafter of Great Mountain Capital..

Good morning, gentleman. First, congratulations on another solid quarter. Given that you’ve had several solid quarters in a row things seem to be going well in general, besides the disappointments in the Southern part of your lease related to Afek.

I'm wondering if you can comment on the recent and steady slow decline in the stock and if you think that it's undervalued?.

This is Avi. So obviously we've been paying attention to the Afek's operations performance. We’ve been disappointed by the recent movement down. That being said, we don't see any specific change in the fundamentals of what we've been saying over the past number of quarters related to the health of the retail business and our activity at Afek.

We recognize that the market is waiting for us to deliver on some of the things that we've been saying over time. And we’re hopeful that over the next few quarters we'll be in a position to do that. As you mentioned, we're very encouraged by the recent performance at retail as well as the continued prospects for Afek.

But we can't really comment on how the stockings..

Is there any possibility that you’d contemplate a stock buyback?.

I'm sorry.

Can you repeat the question?.

Any possibility that you’d contemplate a stock buyback?.

It's something that had been discussed at the Board level and some of that is on the table and our discussions among other things. We have an authorization for one and you can see within our 10-K, but it's not something we're concentrating at the moment..

Okay. All my questions for now..

[Operator Instructions] This concludes our question-and-answer session and conference call. Thank you for attending today's presentation. You may now disconnect..