Andrew Phillips - President and Chief Executive Officer Pamela Kazeil - Vice President, Finance and Chief Financial Officer Cameron Proctor - Chief Operating Officer

Thank you, Chris. Good morning and thank you for dialing into the PrairieSky Royalty Q1 2017 earnings call.

On the call from PrairieSky are Pam Kazeil, Chief Financial Officer; Cam Proctor, Chief Operating Officer; and myself, CEO, Andrew Phillips. Before I turn the call over to Pam to walk through the financials, I will provide an operational update.

Average royalty production for the quarter totaled 26,812 barrels. The increase from Q4 2016 volumes of 23,979 barrels is from the full contribution of the 1000 barrels of thermal oil royalty production from Onion Lake and Lindbergh as well as organic additions from an active Q3, Q4 2016 drilling program on PrairieSky land.

More important in total production, production per share increased to 113 barrels per million shares from just over 100 barrels per million shares in 2016. In addition, production was 49% oil and liquids in Q1, up from 46% in 2016 and 40% at the time of the IPO.

On a cautionary note, the organic volumes added in Q1 will have a significantly higher decline than our existing days’ production. Our free cash flow for the quarter totaled CAD67 million.

Of this total CAD43 million was paid in dividends, CAD10 million used to cancel shares, and the remaining CAD14 million built on the balance sheet. This resulted in our positive working capital building to just under CAD100 million.

On the cost front, cash G&A was CAD3.32 a barrel up from CAD2.22 a barrel in the previous quarter. This is a result for the partial vesting of LTI grants from 2015 and 2016 for all 65 employees.

The 2014 IPO grant will clip fast in Q2 following which we expect this trend to go back below CAD3 per barrel in the second half of the year. Our goal remains to bring long-term cash G&A per barrel to the low CAD2 range on a sustained basis.

This will be achieved by finding further efficiencies in the business as well as organic production growth. The total dilutives outstanding at PrairieSky including employees, executives and board are less than 1% of the shares outstanding.

Acquisitions for the quarter not including Lindbergh totaled CAD4.6 million. We now have 1% gross overriding royalty on 46 sections of undeveloped Montney acreage directly offsetting Petronas and Shell in Northeast British Columbia.

PrairieSky also acquired land on [indiscernible] opportunity under one of our land plan arrangement. The combined scooper PrairieSky reflected CAD2 million over the quarter and continues to return lands to our inventory for future leasing.

Organic leasing the most important part of our business remain strong with 36 new leasing arrangements with 33 different operators. One trend observed over the quarter with more leasing in the deeper Westbourne and West Calgary of Alberta with emphasis from the Mannville liquids rich gas and light oil plays as well as further Duvernay leasing.

185 wells were spud on our lands in Q1 up from 100 in Q1 of 2016 and 140 in Q4 of 2016. This activity increase is consistent with increases in overall industry activity in rig counts.

We look forward to issuing playbook on May 24 in Toronto at the Royal York Hotel. And attendance will be [indiscernible] individual from PrairieSky including three directors.

So it will be a unique opportunity to learn a little more about the assets, future cash flow generation of the business, strategy and those that worked hard at implementing it. I will now turn the call over to Pam to discuss the financial results.

Thank you, Andrew. Good morning, everyone.

PrairieSky generated funds from operations of CAD67.3 million or CAD0.28 per share in the first quarter. This is up 9% from Q4 2016 funds from operations due to increase production, improved NGL pricing and higher lease bonus consideration in the period.

Average daily production for the quarter was 26,812 BOE per day. Production was comprised of natural gas volumes of 81.6 million a day, oil volumes at 10,214 barrels a day, and NGL volumes of 2,998 barrels per day.

Production volumes were up during the quarter as a result of active drilling at PrairieSky lands combined with the addition of a full quarter of our thermal oil royalties at Lindbergh and Onion Lake. PrairieSky’s production volumes included 1,788 BOE a day from compliance activity and 926 BOE a day of other prior period adjustments related to new wells on stream and better well performance.

Q1 2017 product revenue totaled CAD73.5 million, which were 77% liquids. Product revenue was positively impacted by increased production and improved NGL pricing in the quarter.

The compliance group identified and collected CAD2 million in missed or incorrect payments. These compliance amounts are included in product revenue.

Other revenue for the quarter was CAD6.8 million, which included lease rental income of CAD2.5 million and bonus consideration of CAD3 million related to entering into 36 new leases with 33 different counterparties in the period. Administrative expenses in the quarter totaled CAD5.6 million or CAD2.32 per BOE.

Cash administrative costs were CAD8 million or CAD3.32 per BOE, due to long-term incentive payments in the quarter. In 2017, PrairieSky expect cash G&A to be in a low CAD3 per BOE range.

PrairieSky declared dividends at CAD43.2 million in the quarter with the resulting payout ratio of 64%. Under the normal course issuer bid, PrairieSky repurchased 335,200 common shares for $10.1 million.

Since instituting the normal course issuer bid in May 2016, PrairieSky has repurchased over 1.3 million common shares for approximately CAD38 million. PrairieSky intends to extend its normal course issuer bid and allocate up to CAD44 million over the next 12 months to repurchase in capital shares.

At March 31, 2017, PrairieSky have positive working capital at CAD97.6 million including cash at CAD92.4 million and no debt. We will now turn it over to the moderator to proceed with the Q&A.

Thank you all very much for calling in and your continued support as shareholders, then if you have any further questions, please call Pam or myself at 587-293-4005. Thank you.