Neon Energy Limited has commenced commenced Lombardi 17-27H, the first horizontal development well drilled since December 2008 at the Company's 100% owned NSA oil field. Following a detailed review by the new Neon technical team, the well is targeting one of the thickest reservoir sections within the field and is adjacent to one of the best producing wells in the field. The well is expected to take approximately two weeks to drill and is budgeted at US$850,000. The well is expected to be tied into the production facilities within a matter of days following completion.

Vietnam Exploration (Block 120 and Block 105) The seismic vessel Aquila Explorer has been contracted to acquire the 2,000 km 2D seismic survey in Block 120, offshore Vietnam, commencing late May 2010. The vessel will be assigned from another Operator in the region and subject to gaining the necessary approvals from the Vietnamese authorities, it is planned that Neon will use the same vessel to acquire the 1,500 km 2D survey in Block 105-110/04 immediately after completion of the Block 120 survey, estimated late June 2010.

Paris Valley Oil Field Redevelopment Project Analysis of the recent North Paris Valley (NPV-1) well in California has shown that a gross 41 metre oil column is present with two high permeability zones containing 7 metres of net oil pay that is less viscous than anticipated. Neon is incorporating these results into an ongoing field study aimed at determining the field's recoverable resources and a field development plan.

Neon's Managing Director Ken Charsinsky said, 'This is an exciting time for the Company with activity on a number of projects increasing significantly. The drilling of an additional horizontal production well at NSA is expected to significantly enhance production and boost revenues accordingly. Activity is also set to ramp up in Vietnam as the seismic acquisition window approaches and with David's appointment we are now well positioned to progress a number of opportunities.'

Tags: Neon Energy Limited