In recent years Vietnam has become a favoured destination for investment by E&P companies, drawn by a combination of:

• Proven petroleum provinces
• Recent discoveries
• Underexplored
• Large exploration blocks
• Significant upside potential
• Favourable fiscal terms
• Burgeoning domestic energy demand
• Low sovereign risk
• Government transparency

Neon's interest in Vietnam first developed in 2007 through analysis of the company's inhouse proprietary geoscience data.  The company participated in the Song Hong Basin licensing round of that year and were awarded Block 120 as Operator and 100% working interest holder.  In March 2010 Neon announced a farmout of Block 120 to KrisEnergy Ltd and Enovation Resources Ltd.  The farmout is subject to the pending approval of Vietnamese authorities and entailed Neon farming out a 50% participating interest in return for past costs plus full funding of the 2010 2D seismic programme.

In January 2010 Neon was awarded a PSC for Block 105-110/04 ("Block 105") in the central Song Hong Basin (as Operator with 90% participating interest).  In May 2010 Neon announced a farmout of Block 105 to KrisEnergy Ltd and Enovation Resources Ltd, in return for past costs plus full funding of the 2010 2D seismic programme.

The joint venture is now preparing to commence exploration drilling of the blocks during 2012.

More detail on Blocks 120 and 105-110/04 is available at the following page links.