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NEON ENERGY LTD - ASX: NEN
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Description
Neon Energy Ltd is an emerging petroleum exploration and production company listed on the Australian Securities Exchange. The company is headquartered in Perth, Western Australia, with an operations office in Bakersfield, California.
In Vietnam Neon holds 50% working interest and is Operator of offshore exploration Blocks 120 and 105-110/04. These blocks are highly prospective for large accumulations of both oil and gas.
In California Neon is Operator and 100% owner of the producing North San Ardo oil field, and has built an extensive portfolio of exploration and appraisal assets within the Salinas and San Joaquin Basins.
Within Southeast Asia Neon is actively engaged in an aggressive new ventures effort to expand the company’s asset base from the current two exploration licenses held in Vietnam.
Production
Through its wholly owned subsidiary Neon Energy Corporation, Neon is Operator and 100% equity owner in the North San Ardo (NSA) oil field, located in the Salinas Basin, onshore California. NSA is situated immediately to the north of the giant San Ardo field, which since 1947 has produced approximately 500 million barrels of heavy crude oil. San Ardo is operated by Chevron and Aera, and is subject to enhanced recovery techniques – principally steam flooding – in order to increase production and ultimate recovery. Presently the field is producing c. 14,000 bopd.
NSA is an anticlinal spur off the greater San Ardo field, and production of the 12° API gravity oil is from the Lombardi Sandstone. Neon commenced development of the field in 2006, with first commercial production achieved late that year. Primary production is achieved with pumping assistance, and significant upside exists via the implementation of secondary recovery techniques to lift production and ultimate recovery. Given its success at the San Ardo field, steam flooding is the most likely solution and such production enhancement techniques are quite common in California. A field-wide steam cycling program is due to commence during June 2010. Production has recently been increased by drilling of the Lombardi 17-27H horizontal well, and will be increased further in the short term by the drilling of up an additional production well in Q3 2010.
NSA Quick Look
Discovered: 1947
First Production: 2006
Original Oil in Place: 15 MMBbls
Reserves (1P): c. 3.4 MMBbls
Reservoir: Lombardi Sandstone
Depth: c. 2,100 feet
Producing Wells: 12
Water Disposal Wells: 2
Vietnam Projects
Vietnam
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 entails Neon farming out a 50% participating interest in return for past costs plus full funding of the recent 2D seismic acquisition and current seismic processing (capped at US$3MM). Neon retains operatorship.
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. The farmout is subject to the pending approval of Vietnamese authorities and entails Neon farming out a 50% participating interest in return for past costs plus full funding of the recent 2D seismic acquisition and current seismic processing (capped at US$2.75MM). Neon will retain operatorship.
California Project
Neon's California exploration and appraisal interests are held by its wholly owned subsidiary Neon Energy Corporation, and located onshore in the Salinas and San Joaquin Basins respectively. The two basins offer quite distinct opportunities, with the Salinas Basin assets being characterised by heavy crude oil opportunities reservoired in shallow clastic reservoirs; whereas the San Joaquin Basin offers large structural and stratigraphic traps with medium to light gravity oils reservoired at depth.
Mine For
gas, oil
Location of operation(s)
USA, Vietnam
Address
Ground Floor, 88 Colin Street
WEST PERTH, WA, Australia
Phone
+61 8 9481 1176
Website
Last Updated
3/3/2011
The data on Australian Shares.com is intended as a guide only and is provided purely as an indication of what information can be found through official announcements. Data on this website should not be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. The publisher (Intaanetto Pty Ltd) will not be held liable for any loss arising from the use of this website.
