Neon Energy Updates on Drilling at Cua Lo-1 Well off Vietnam

Australia-based Neon Energy Limited provided the following update Tuesday regarding drilling of the Cua Lo-1 exploration well, located in Block 105-110/04 (Block 105) offshore Vietnam.

Since the last update Aug. 26 the 12.25 inch hole has encountered gas shows within each of the upper three objectives, prior to experiencing a “kick” due to an over-pressured gas bearing formation at a depth of 8,425.1 feet (2,568 meters).

The Operator has worked diligently to stabilise the well and has plugged back to below the 13.375 inch casing shoe, at a depth of 5,905.5 feet (1,800 meters). The well will now be sidetracked and drilled to a revised 9.625 inch casing point located just above the over-pressured zone. This will allow for wireline log data, including reservoir fluid samples, to be collected across the upper reservoirs before setting casing and drilling ahead to the deeper two objectives.

Neon Energy is encouraged by the presence of gas encountered in the zones drilled to date. The presence of hydrocarbon gas bearing formations will be confirmed after collection of reservoir samples during wireline operations, while reservoir deliverability will only be determined by production testing. A decision regarding production testing will be made after reaching the proposed Total Depth (TD) and evaluation of wireline data and retrieved fluid samples is complete.

The Cua Lo-1 well is designed to test the Cua Lo gas prospect, which comprises five clastic reservoir targets ranging in age from Lower Pliocene to Upper Miocene. The well is being drilled by the Ensco 107 (400' ILC) in a water depth of 249.3 feet (76 meters), to a planned TD of 9,271.6 feet (2,826 meters).

The respective working interests of the joint venture parties in the Block 105 PSC are as follows:

• Neon Energy (Song Hong) Pty Ltd - 25 percent
• Eni Vietnam B.V. (Operator) - 50 percent
• KrisEnergy (Song Hong 105) Ltd - 25 percent