Neon Energy Limited confirms that the Paloma Deep-2 appraisal well spudded on 10 May, using the Kenai-7 rig.

The objective of the well is to appraise hydrocarbon pay zones already proven in the Paloma Deep-1 well, and to acquire core samples in the target Lower Antelope, Lower Stevens and Fruitvale shale reservoirs. The well will be drilled to Total Depth (TD) 13,600 feet in the Fruitvale Formation, and will be drilled with a larger diameter borehole than Paloma Deep-1. It will be completed with cemented liner in order to achieve optimal flow test results.

Neon Energy Managing Director, Ken Charsinsky commented 'The investment by Neon in these additional wells at Paloma will provide crucial information that will enable Neon to determine the magnitude of the resource discovered thus far, and the associated level of commerciality.'The wells are operated by Neon with a minimum 75% working interest in the project. Solimar Energy Limited is participating with up to a 25% working interest pending completion of the Farmout Agreement in relation to the Paloma Deep-1 well, under which Solimar is paying a promoted share of the dry hole and completion/testing costs up to an agreed cost cap.

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