(MENAFN- ProactiveInvestors - Australia) Neon Energy (ASX: NEN) will in August 2013 participate in the drilling of a second offshore Vietnam exploration well after operator Eni contracted the Songa Mercur semisubmersible rig for the work.
The company will be carried through drilling of the well in Block 120 to a gross cap of US$20 million.
Any costs in excess of the cost cap will be paid by the parties in accordance with their respective working interests with Neon and Singapore's KrisEnergy each holding 25% while Italian major Eni owns 50%.
The joint venture had previously selected a jack-up rig to drill the Cua Lo prospect in Block 105, commencing in June 2013.
A final decision on well location will be made once Amplitude vs Offset studies on 500 square kilometres of 3D seismic data acquired in mid-2012 and delivered in March 2013 is completed in early June 2013.
This data has already helped to identify a new prospect, currently identified as "Lead 1", which is being considered as a possible drilling candidate in addition to the previously identified Ca Lang and Rua Bien prospects.
Ca Lang and Rua Bien respectively offer unrisked prospective recoverable resources of 461 million barrels (MMbbl) and 611 MMbbls of oil.
Cua Lo has gross unrisked prospective recoverable resources of 3.9 trillion cubic feet of gas.
Neon had US$23.3 million as of 31 March 2013. Â
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