Neon has announced the recent signing of a Production Sharing Contract (“PSC”) with PetroVietnam, the Vietnamese national oil and gas company for Block 120 in the Song Hong Basin, offshore central Vietnam. The PSC was awarded to Neon's wholly owned subsidiary Neon Energy (Song Hong) Pty Ltd pursuant to a bid submitted in the 2007 licensing round. Neon will operate the block with 100% participating interest. Neon has committed to acquire 2D seismic data and drill one exploration well within the first four-year term of the PSC.
Block 120 covers an area of nearly 8,500 square kilometers in water depths of between 50 to 1,000 metres. It is situated within a north-south trending, Tertiary-aged sedimentary basin that includes part of the Quang Ngai Graben. The only exploration well drilled in the block to date encountered a small oil column providing encouragement for the presence of an active petroleum system.
Neon Director Alan Sherrard commented, "We are delighted to have secured the rights to explore and develop such highly prospective acreage, which offers a combination of untested play types and a proven petroleum system. We look forward to a successful partnership with PetroVietnam in developing the petroleum potential of Block 120."
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