KrisEnergy Ltd, reported Tuesday that Eni Vietnam B.V., as operator of Blocks 105-110/04 (Block 105) and 120 offshore Vietnam, has issued default notices March 7 to Neon Energy (Song Hong) Pty Ltd. regarding the latter's $22.1 million outstanding due and unpaid cash calls, including default interests.
Under the joint operating agreements (JOAs) for the two blocks, Eni and KrisEnergy as the other partners in the contract areas assumed the costs of the Default Amount pro rata. Neon Energy had 30 days under the JOAs from the date of the default notices to repay Eni and KrisEnergy their pro rata share of the default amount, together with default interest.
"The Default Notice Period has elapsed and Neon Energy has not effected full payment of the Default Amount, and therefore Neon Energy will be required by Eni and KrisEnergy, to withdraw from the contract areas, pursuant to the JOAs," KrisEnergy said in its press release.
Neon Energy’s 25 percent working interest will be transferred to Eni and KrisEnergy proportionately, resulting in Eni and KrisEnergy holding 66.66 percent and 33.33 percent working interests in both contract areas, respectively. Prior to the latest development, KrisEnergy held a 25 percent working interest in each of Block 105 and Block 120, with the remaining 50 percent of each contract area held by Eni and 25 percent by Neon Energy.
“It is with regret that we see Neon leave the JOA but this also provides an opportunity for us to increase our working interest at relatively low cost in two exploration blocks which we believe remain prospective,” Richard Lorentz, director Business development, said in the release.
Neon Energy remains responsible for the default amount, which is due to Eni and KrisEnergy on a pro rata basis.
Separately, Neon Energy is "disputing the validity of the Operator's actions leading up to issuance of the Notices of Withdrawal, and remains in negotiation with the Block 120 and Block 105 Joint Venture Partners ... The Company will provide further updates in due course," the Australia-based firm said in a company announcement.
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