David Brunetta – Director of Investor Relations Martin Ferron – President and CEO David Blackley – CFO.

Greg McLeish - GMP Securities Ben Cherniavsky – Raymond James Bert Powell - BMO Capital Markets Maxim Sytchev – Dundee Capital Markets Chris Lalor – GMP Securities Luke Folta – Jefferies.

Good morning ladies and gentlemen. Welcome to the North American Energy Partners Earnings Call for the Fourth Quarter Ended December 31, 2014. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, there will be an opportunity for analysts, shareholders, and bond holders to ask questions.

The media may monitor this call in listen-only mode. They are free to quote any member of management but they are asked not to quote remarks from any other participant without that participant’s permission. I advise participants that this call is also being webcast concurrently on the company’s website at nacg.ca.

I will now turn the conference over to David Brunetta, Director of Investor Relations at North American Energy Partners Inc. Please go ahead, sir..

Thanks Mellissa. Good morning ladies and gentlemen and thank you for joining us. Welcome to the North American Energy Partners fourth quarter conference call.

I would like to remind everyone that today’s comments contain forward-looking information and our actual results may differ materially from expected results because of various risk factors, uncertainties, and assumptions.

For more information about these risks, uncertainties, and assumptions please refer to our December 31, 2014 management’s discussion and analysis which is available on SEDAR and EDGAR.

On today’s call, David Blackley, CFO will first review our results for the quarter, and then he will hand the call over to Martin Ferron, President and CEO for his remarks on our strategy and outlook. After the prepared remarks, there will be a question and answer session. For your information, management will not provide financial guidance.

I will now turn the call over to David..

Thank you David and good morning everyone. I’m going to review consolidated results for the fourth quarter ended December 31, 2014 as compared to the quarter ended December 31, 2013. Revenue from continuing operations for the quarter was $113.2 million up from $108.9 million in the same quarter last year.

Our current quarter revenue benefited from strong site development volumes at the Fort Hills mines combined with MSE wall construction project completed at both the Fort Hills and Horizon mines. This offset lower demand for mine support services at the Base Plant and Millennium mine sites.

In addition we wound down site development activity at the Joslyn mine, in line with the planned suspension of mine development by the customer. Revenue was also lower at the Horizon mines as the customer took over responsibility of the equipment supply chain cost at the start of 2014 on the cost reimbursable of the burden removal contract.

The previous year’s revenue benefited from heavy civil construction activity on the MLMR project at the Base Plant mine. Gross profit for the current quarter was $10.1 million or 8.9% of revenue down from a gross profit of $16.8 million or 15.4% of revenue during the same period last year.

In the current quarter performance was negatively impacted by $1.9 million charge to depreciation for the write-down of plant and equipment and assets held for sale.

Also productivity was interrupted on two projects; one, due to a high volume of client required changes, the other being negatively affected by a higher than anticipated number of inclement weather days. These negative effects were partially offset by strong performance on civil construction and mine support projects.

Increased rental equipment cost required to support both these projects led them to benefit of equipment cost efficiency. Prior year performance included a claim settlement on a construction project and strong performance on a second project.

Operating income for the current quarter was $1 million compared to an operating income of $5.6 million during the same period last year. The reduction in operating income resulted primarily from lower gross profit in the current year.

This was partially offset by a $3.8 million decrease in stock based compensation expense compared to 2015, reflecting the revaluation of our liability related awards to be settled in shares from fluctuations in our share price.

G&A expense excluding stock based compensation expense was $8.1 million for the current quarter similar to $8 million in the same period last year.

We recorded a net loss from continuing operations of $1.5 million and a basic and diluted loss per share of $0.04 in the current quarter compared to a net income of $5.5 million and a basic and diluted income per share of $0.15 during the same period last year. The current year did not include any non-cash items affecting net income.

Non-cash items affecting net income in the prior period included non-cash gains on embedded derivatives. Excluding these non-cash items from the prior period results, net income would have been $2.1 million for the basic and diluted income per share of $0.06.

In the three months ended December 31, 2014, total interest expense was $3.2 million comparable to $3.2 million in the same period last year.

Interest on the Series 1 debentures of $1.5 million in the current quarter was lower than the expense in the same period last year due to the partial redemption of our Series 1 debentures in 2013 and early 2014.

To date we have redeemed $150 million in July 2013, $10 million in April 2014, and a further $6.3 million in December 2014 of our Series 1 debentures.

Offsetting the savings was $0.2 million write off of deferred financing cost related to the Series 1 debentures, and increase in current year capital lease expense arising from additional adverse finance by capital leases and higher credit facility interest due to increased borrowing activity in the current quarter.

We received $36 million of the carrying amount financed by NAEP on January 2, 2015 from Canadian Natural as settlement for assets sold to them per our agreement. Given the current economic uncertainty, we plan to hold on to the cash to maintain our liquidity. That summarizes our fourth quarter results.

I will now turn the call over to Martin for his remarks. .

Thanks David and good morning to everyone. With the recent significant declines in the price of oil, the very viability of oil sands mining is coming to question. However, our customer's reaction to this challenging situation should reduce those concerns.

They have clearly demonstrated that they are committed to that oil sands mining projects despite the current lower price environment. Oil sands mining is a long-term investment, which lies typically in excess of 40 years.

As such they do not share the same sensibility of the short-term fluctuations in oil price but North American shale play and even SAGD project experience. Despite [indiscernible] oil prices in low 40s range, oil sands mining is including Horizon, Fort Hills, and Kearl have announced that they will continue with their mine expansion plans.

In some cases funds have even been diverted from other projects even SAGD ones to ensure the mining projects remain on schedule. Also it is important to note that there is roughly 25% appreciation in the Canadian dollar has helped to mitigate the effects of the oil price decline as our current capital cost are primarily in Canadian currency.

This is also to say that spending on oil sands mining projects will continue without scrutiny. Our customers continue to cut costs and we are very much trying to be part of the solution. It is important to note that our financial performance over the last 30 months has improved. At the same time we were able to pass cost savings onto to our clients.

So we have been on this moment for the last 30 months anyway. We expect that we will be able to help further, especially as the customers appear open to new ideas and initiatives.

From revenues of $472 million which was relatively flat in comparison of 2013 and 20% lower than in 2012, we made $64 million of EBITDA, 14% margin compared with $43 million of 9% margin in 2013 and $28 million of 5% margin in 2012.

We achieved this by scrutinizing every cost line on our income statements and as an asset intensive company we reduced overall equipment cost by $35 million from 2013 levels. For the same time, we reduced our G&A cost by $4 million before stock based comp.

As expected and as David mentioned, the owner of the Horizon mine took over the equipment and maintenance activities associated with overburden removal in early January. We continued to provide operating man power and are in discussions with the customer about the terms of this arrangement.

The impact is changing and contract and approach will be a reduction in revenue of about 80 million of roughly 12% margin on a year-over-year basis.

David has previously mentioned also that as a result of declined equipment, $36 million of cash was received as expected after continuation of our commitment to shareholder -- a portion of this cost has already been committed to our second normal course issue of bid for our shares in two years.

In December we purchased 6.3 million of our debentures bring the total volume of our redeemed debentures in 2014 to 16.3 million. Our quest to release both the amount and cost of our debt resulted in $9 million drop in our interest payments year-over-year.

This allowed us to almost breakeven on the continuing operations in terms of net profitability for the first time in years. One of our main corporate goal is just to achieve some revenue diversification outside the oil sands mines.

In this context we are very pleased to have the opportunity to bid for both the site preparations work and the main civil package related to the site C Hydro project in British Columbia, which is likely to kick off this summer. We certainly have the cost structure and expertise to be competitive for this high value work.

In addition we are hunting for other diverse work opportunities for example in an international areas where our Canadian dollar cost structure will make a difference. We have reasonable amount of winter work for the first quarter and our bidding for construction scopes that will commence after spring breakup.

All in all we expect first half performance to be similar to that of last year. Normalize the reduction of work at the Horizon mines that I went to earlier. At this time we anticipate that we should be in a much better position during quarter two to communicate what the second half of the year will bring.

At this juncture I’d like to give one of my predictions that similar to 2014 60% of our EBITDA roughly will appear in the second half not just based on kind of looking at the bids that we’ve put in and the timing of work. So that part I think we are continuing through 2015.

Our recent debt reduction initiatives and operational improvements help us view the down turn of an ever present risk in our cyclical business and provide us with the ability to take advantage of organic growth and acquisition opportunities that may arise.

Our clear objective for 2015 is to demonstrate with the – of cash flow and what is obviously going to be a challenging operating environment. In particular we are going to limit to our CAPEX to around the $25 million level, only targeting essential to sustain needs.

So we are writing in the cash flow to produce operating cash flow in the top of the markets here. So that’s our theory. So with that thought in mind I’ll pass the call back to Melissa for the Q&A session. Thank you. .

[Operator Instructions]. Our first question comes from the line of Greg McLeish with GMP Securities. Please proceed with your question. .

Good morning guys, just a couple of questions.

Just looking at Kearl, Horizon, and Fort hills I was wondering if you could just maybe talk about the plans or when is the major ramp up on these things, is it 2015 or we will see more work going into 2016 and even 2017 as they get ready to sort of come online?.

Yes with all these expansions seem to be targeting kind of late 2017. So there is work that will continue through 2015 and 2016 and into 2017. I think that’s the partner we’re seeing Greg. .

Is there any sort of year where there will be may be a little bit bigger build or its just sort of constant?.

We are hoping that it will be a constant uptick in that activity. .

Okay, and just a question for David, I see that accounts receivables increased about $14 million over Q3.

There is a note just talking about I guess you had some change with a client, can you sort of tell us or sort of guide what normalized accounts receivable would be or is that a good normalized number moving forward?.

Greg, what you are seeing in there in that increase is a combination of things. Part of that increase is related to the CNR money that we collected here in early January. So that was about $7 million that's come out of building and gone into accounts receivable. The balance is just the normal timing so it is just that projects have ramped up.

It is hard to really predict at what point as a normal number, it is all about the size of the project and timing but I would normally have expected accounts receivable to grow in the fourth quarter as we wrap up construction projects at the end of December. .

Okay, and just on your SG&A, your run rate was 30.2 million, you have been able to bring that down through cost cutting initiatives over the last couple of years.

Is that a good sort of run rate that we should be using going forward or are you looking for further reduction this year?.

We are always looking for further reductions Greg but I would kind of use that as our run number to start with. .

Okay, and just on interest expense, what's your -- should we be using that run rate of Q4 as the good sort of number for the balance of 2015?.

Yeah, I would think that is good number to use. .

I will get back in the queue, thanks guys. .

You are welcome. .

Thank you. Our next question comes from the line of Ben Cherniavsky with Raymond James. Please proceed with your question. .

Good morning guys. .

Good morning. .

I know you did provide a little bit of commentary on the earn out for piling group in your MVNA but I am wondering if you could maybe elaborate on the culture that you basically determined to pursue on the finalization until 2015 and if you could just maybe elaborate on what that decision means, why it was made and just how you are feeling in general about those earn outs?.

Yeah, sure Ben. So, obviously the bulk of the earn out comes from two years of activity. So, we got the numbers for the first year and we scrutinized those and challenged certain things. We got to a point where we thought that it was kind of on the margin of us getting something.

But we couldn’t quite get over the line so we decided that rather than have maybe a couple of discussions that we could use that word. We had one at the end of the second period which is coming up at the end of June. So once we get those numbers, have a chance to look at them then if it is open to further discussion on orders. .

Any idea on how the piling industry, how the piling market has performed, I imagine it is slightly deteriorated from past year?.

Well, clearly any oil related activity you would expect that but they kind of study diverse business. And I think this year they do have a major oil sands project that they did not have last year. So, obviously I think we are hoping to get something and would certainly give up assurance in terms of the numbers and talking to the buyer..

Okay, thanks.

I am wondering also in the past you have helped us with little bit of color on utilization rates to your fleet and I am wondering if you can maybe give us an update on that particular large mining trucks, what the utilization rate is now, and maybe that versus the smaller fleet?.

Well, David made the point that we were renting equipment in Q4 and that's because our mix of work started off as construction work while the weather was good and we found ourselves in a position where we didn’t have quite enough of the smaller construction assets to drill what we had.

But then we swung into winter work and as I have said we have got a reasonable amount of it so we got pretty decent utilization on the heavier equipment in late Q4, January, February hopefully into March. So, I am not going to put a number on it but I am saying it is pretty reasonable in comparison with other years. .

So, it has improved. .

I wouldn’t say dramatically improved but improved a little bit. .

And do you think that is the same for the industry as whole or is that more indicative of some market share contracts that you specifically want?.

No, I think our cost structure has allowed us to pick up more work. So, I don’t think the overall activity levels in the industry have picked up. I just think we are at a position to take more than our usual share. .

I guess I am trying to understand in addition to how you are performing, is there still a fair amount idle lying in the market right now?.

Yes, we got still idle lying around for sure. .

And finally, I guess just on a higher level you guys deserve huge credit for turning this business around and getting some cost savings implemented which turned out to be very timely.

So congratulations for that, I am just wondering though does that -- what’s happen to the market does it sort of eradicate some potential for margin expansion, in other words do you end up passing those cost savings on to the customers who become more and more focused in demanding in this kind of environment.

I recognize it has been tough for the last two or three years for you but arguably it is going to get even tougher here as these oil prices are not just -- so just maybe help us understand what the potential is for numbers in this kind of environment with respect to pricing power and margins. .

Well that’s a great question there and I appreciate your comments about what we’ve done in the past. Clearly we are in discussion with customers right now about how we can help them. We are in the middle of those talks, too early to say exactly how they are going to work out.

But it appears to me anyway that the customers are willing to look at things differently. I don’t think I am modest.

I think if we can find ways of improving efficiencies and removing interferences and just driving out cost by doing things in a different way then we can come up with some ideas to help them to reduce cost and the main savings will come from mines.

Obviously as I mentioned also as we improved our cost structure, we have started to share that with the customers anyway in order to get market share right. So that’s been a constant approach that we can adopt now for time -- and nothing really changes. I think there is just more talk about how we can help right now.

So I can’t predict, in fact I don’t want to predict what our margin is going to be this year beyond the kind of color given on our expectations. .

Okay, fair enough. Thanks very much guys. .

Thank you. Our next question comes from the line of Bert Powell with BMO Capital Markets. Please proceed with your question. .

Hi, just to be clear it’s Bert.

Martin, how much have you done on the share buyback after receiving some of the proceeds from here on?.

It was just about 1.1 million shares. So the initial limit was about 1.78 or something like that as I recall. .

Okay, that’s helpful.

And just I want to go back, just back to the cost side of things and in your comments that you can add this for a while and you been sharing all along, I was just curious how much of the cost savings that you have been able to achieve are what I would say kind of North American specific versus going back and you extracting your concessions from if your major cost by the things your equipments and the parts and I guess labor as well?.

Well, we shared a fraction of all those savings with our customers where we needed to in order to win certain projects and to regain share activities like the earth moving. So where we found that we made a difference offsite in order to be more competitive we were able to kind of lower our prices and work on our basis. So that’s how you share right.

If you can lower your price but still make a reasonable margin, get some to the customers is a good way of working. .

I am just trying to think about if I kind of put the cost into two buckets one that are where just inefficiencies inside North America and upon your arrival and kind of utilize equipment in all those kinds of things are kind of one category of cost and the other category you know maybe going to back to your suppliers saying we are just not prepared to pay back for this service from you or this part or this piece of equipment.

Just trying to figure out which one contributes for to your cost savings over the –?.

There is certainly what we did on offsite clearly we have been discussing cost with our vendors and those discussions are heated up just lately obviously. I would say 80% of what we found was on offsite. .

Okay, how much more you think is there to go on the supplier side?.

We are in discussions with those right now. So it’s hard to say. We are going to ask the question and we’re obviously asking same question to them. .

Okay and just last question, you use a rental in the quarter or the construction side of the gear, would you be looking to augment on the larger side using our strategy as well or is it just this type of a situation this quarter, there is nothing really to read into that?.

Yes, it's sometimes despite the party on the very kind of diverse and logically you don’t have quite the right equipment to do every job at a particular point. So we found that part to be true in the certain point in the fourth quarter. So we rented more equipment rather than purchasing.

So I think I mentioned we are going to just target sustaining capital this year. So we are not going to be, our stock is trading like at 50% of book value so clearly we are not going to be buying your equipment right. So we’ll probably rent and hopefully rent at reasonable prices given the environment we are in.

So if we need to run bigger equipment we will but I am expecting that not to be the case. Well, obviously if we both can win some Site C work that will be great because that will take heavy equipment and then we’ll see what we have in the oil sands at that time. .

Okay, thank you for your comments Martin. .

Pleasure..

[Operator Instructions]. Our next question comes from the line of Maxim Sytchev with Dundee Capital Markets. Please proceed with your question. .

Good morning gentlemen, just Martin the commentary you made in relation to the Horizon project and potentially talking with the customer about extending the terms, I mean I would assume it’s going to be a different context structure.

Can you comment sort of in a preliminary way in terms of how that could work and where the negotiations have taken you so far?.

Maxim we are starting right now with the labor part of the -- contract which remains and it ends at the end of June. So I think the operator likes the way we are running the equipment. We’ve done it for few years and we got some good people obviously involved.

So I think the discussions are going on pretty well in terms of lengthening that arrangements. But it’s too early to say -- it’s a lot we are hopeful like anything else we are in discussion and I think by the end of this quarter possibly we will know better. .

Okay, that’s helpful. And then looking at the balance sheet, I mean it’s always been in a very good shape and you talk about being patient both from an organic and inquisitive perspective.

So how do you square the reality of the stock trading below tangible bulk end and you having the little cost structure and potentially some distress situations emerging on the Horizon.

Can you maybe walk through your mental map in terms of how you could access those opportunities if it’s possible?.

All I could say Max really is that we are going consider this much of a cash as we can here and use that cash in a very responsible way to try and grow out profitability in the future now. I think relative to some of the companies we’re looking at we’re pretty strong. We got a great balance sheet right now as you say.

So I think should distress situations emerge we’ll be looking at a lot of them either process or businesses and if something makes sense we’ll take a hard look but I think the key is to just be patient and wait to see what happens here. .

Okay, now that makes a lot of sense, and then lastly the conversation about potential booking at international opportunities I mean, what’s your thought process there in terms of how can you successfully access that marketplace.

I mean I assume as long as you get paid for mob [ph] cost you can do the work anywhere but is there anything imminent on the horizon or what can you share with us?.

I can't share much. Max, we are obviously in a very competitive situation. What I can say is that I wouldn’t have mentioned it unless we have an opportunity. So we are looking at something that could start off in the next quarter or two.

But we are looking at it hard, it might make some sense, and obviously in this situation any sort of revenue diversification as long as it is safe revenue we are going to look at. .

Okay, that's helpful.

And then lastly on Site C do you have all the consortia submitted with them already or is that still in process?.

Well, there are two pieces of work Max, the site preparation which is turning out to be quite a big package. It is going to be a significant piece of work. So, there are lot of bidders for that obviously. People are looking to getting normal action. So the full consortia of refitting to main Sybil [ph] of that activity had not started yet.

So we are bidding the preps but it goes into [indiscernible] as it expands and then I think we will be turning our attention to the main civil. .

Okay, that's it from me. Thank you very much. .

Thanks Max. .

Thank you. Our next question is a follow-up from the line of Greg McLeish with GMP Securities. Please proceed with your question. .

Hi, guys just one sort of follow up question on some of the oil sands, I see that when they cut capital budget they have also talked about cutting their employee count as well.

Does that give you guys an opportunity to sort of come in and back the workers that are not capable of doing it anymore or how you sort of view that situation?.

We are not seeing that type of opportunity just yet Greg but this has longer legs than we might see that. We might also see them wanting to rent equipment from us rather than apply stuff right. I think that would make sense if they are trying to cut their CAPEX budgets.

So, the initial reaction is being to cut and if they happened to go forward with any newer initiatives at this juncture but they will probably will in the future. .

Great, thanks a lot guys. .

Thank you. Mr. Ferron there are no further questions. I would like to turn the floor back to you for any final remarks. .

Well thanks Mellissa and thanks to all the listeners. We look forward to talking to you next time. .

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..