neon energy limited -...

Neon Energy Limited An Emerging Explorer & Producer

NEON Energy Ltd. is an ASX Listed (“NEN”) oil and gas exploration and production company focused in selected countries in Southeast Asia and the US. Our primary goal is to add shareholder value by

acquiring significant equity positions in high quality prospective acreage via the appropriate use of the latest technologies, our large unique database and our experienced technical team

.

Disclaimer

This presentation has been provided for the sole purpose of providing preliminary background financial and other information to enable investors to review the business activities of the Company. This presentation contains interpretations and forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in the presentation are reasonable but may be affected by a variety of variables and changes in underlying assumptions which could cause actual results to differ substantially from the statements made. Including but not limited to: production fluctuations, commodity price fluctuations, variations to drilling, well testing and production results, reserves estimates, loss of market, industry competition, environmental risk, physical risks, legislative, loss of mineral lease tenure, fiscal and regulatory developments, economic and financial market conditions, project delay or advancement, approvals and cost estimates. Investors should undertake their own analysis and obtain independent advice before investing in Neon Energy shares. All references to dollars ($) in this presentation are to US$ unless otherwise stated. The Company and its Directors, agents, officers or employees do not make any representation or warranty, express or implied, as to endorsement of, the accuracy or completeness of any information, statement representations or forecasts contained in this presentation and they do not accept any liability for any statement made in, or omitted from, this presentation.

Slide 2

Investment Rationale

Slide 3

Leveraging profitable Californian production to fund “blue sky” exploration in Southeast Asia

Competitive advantage via: ! Unique geoscience data library

covering Southeast Asia ! Proprietary 5000 man hour study in

California ! Strong geoscience skills ! Proven Board, management and

technical team

Vietnam: Successful Strategy Case Study

2009$ 2010$ 2011$ 2012$ 2013$

Signed Block 120

PSC

Signed Block 105

PSC

Farmout to KrisEnergy: Funds 2D seismic

commitment

Farmout to Eni funds drilling commitments

plus 3D seismic

Drill two high-impact exploration

wells in 2013

Prospect development

! Producing asset underpins market capitalisation and funds company overheads

! NEN exposes the shareholder to a portfolio of transformational opportunities

! Portfolio diversity

! Competitive advantage via a large and unique geoscience database focused on SE Asia

! Successful track record of Board and Management

! Disciplined approach

! No debt

What sets us apart?

Slide 5

Board and Management

Commercial Manager Iain Smith

G&G Manager Dave Cliff

CFO Ben Newton

Commercial Manager Iain Smith

John Lander Non Executive

Director Ken Charsinsky

Managing Director Vacant

Chief Financial Officer

Ben Newton

Alan Stein Non Executive

Chairman

Non-Executive Chairman: Dr Alan Stein founded UK listed Fusion Oil and Gas, a successful West Africa explorer sold to Sterling Resources in 2003. Has since founded Ophir Energy plc, an Africa focused exploration company which listed in London in 2011. The IPO was the largest ever in Europe by an Exploration company currently has a market cap of ~A$ 3 billion.

Non-Executive Director: John Lander has over 45 years of experience in the international and domestic oil industry and has held a number of directorships in successful oil and gas companies listed in the United Kingdom. He currently holds non executive posts in three UK based companies, namely: Canadian North Sea Ltd, Alkane Energy Plc and Ophir Energy Plc.

Managing Director: Ken Charsinsky has over 35 years of worldwide upstream E&P experience, most recently as New Ventures Exploration Director for Noble Energy Inc. Previously he has been the Managing Director of E&P subsidiaries of CMS (Nomeco) subsidiaries based in Congo and Tunisia.

Slide 6

G&G Manager Dave Cliff

US Country Manager Don Nelson

Capital Structure

Slide 7

ASX Code: “NEN” Share Price: 27 to 59 Cents Shares on Issue (MM): 439.2 Options on Issue (MM): 17.03 Market Cap (@$0.35) ($MM): $154 Cash on Hand ($MM 30/6/12): $11.8 Top 40 Holdings: 45.8% Institutions: 21% Nil Debt

Market Coverage

Source: Broker Reports

May 2012 Buy

A Rare Gas Poised to Shine “NEN provides an opportunity to invest in an emerging Oil & Gas company with existing Californian production & development assets with unconventional exploration potential and significant high risk/high reward exploration upside in offshore blocks in Vietnam, supported by a management team with a proven track record in developing emerging oil & gas companies.”

August 2011 Outperform

A Drilling Play with Asian Upside “Attractive portfolio of development, appraisal and exploration assets with profitable production from California complimented by transformational exploration in Vietnam.”

Slide 8

June 2012 Buy

A Shining Light in the Oil & Gas Sector “We believe NEN’s award, work-up and farm-out of its Vietnam assets is testament to management’s strong technical and commercial ability and indicative of future growth potential.”

June 2012 Spec Buy

Time to Get Back in to Neon “…the US assets of NEN well and truly underpin the current share price of the company. We believe most investors have been, and should be investing in NEN for the Vietnamese exploration potential. However, some good news from the US is welcome, and strongly reinforces our Buy recommendation...”

March 2012 Spec Buy

Many Near Term Catalysts “We continue to rate NEN as one of our High Conviction plays for 2012...The key near term catalysts include the completion of the Vietnam farmout agreement and appraisal results from the Paloma Deep discovery.”

Balancing the Portfolio

!   Southeast Asia !   “Blue Sky” exploration !   Moderate risk for high reward !   Net NPVs US$200MM to $1000MM+

!   California !   Low risk production and appraisal !   Near term low-moderate risk exploration

upside !   Net NPVs US$10MM to $200MM

!   New Ventures !   Focus on medium risk exploration and

appraisal assets !   Targeting >25MMBOE net incremental

resources

Slide 9

Schematic only

Vietnam: High Impact Exploration

!   Neon offers material exposure to significant oil & gas upside in Vietnam

!   Neon acquired blocks and successfully farmed down on two occasions, to fund seismic and drilling costs

!   Large, underexplored blocks located within proven petroleum systems

!   Recent major gas find by ExxonMobil in Block 118, on geological trend with Block 120 prospects

!   Block 105 gas prospects adjacent to Chinese producing gas fields

!   Vietnam offers favourable fiscal terms, and a high-growth, progressive economy with corresponding energy demand

Slide 10

Netherland Sewell & Associates (MMBO recoverable)

Low Best High Rua Bien 160.1 611.2 1724.2 Ca Lang 125.7 460.6 1311.1

!   Large underexplored area: 8,469 km2 !   Proven petroleum system with an oil discovery on the block

!   1993 BHP well encountered 6 metre oil column above 32 metres of oil shows

!   ExxonMobil Recent Discovery successfully appraised along trend on a Miocene Reef play similar to Ca Lang

!   ENI Partnership results in: !   Risk reducing 500km2 3D survey and well to be drilled at no

significant cost to Neon !   Exposure to huge resource potential with a meaningful 25%

working interest !   Work program will exceed commitments made to Vietnam

under the PSC

! Ca Lang or Rua Bien to be Drilled in 2013

Rua Bien

Ca Lang

BHP #1

Rua Bien

Ca Lang

Vietnam Block 120 (Neon 25%)

Block120

Slide 11

Dong$Fang$Gas$Field$Cua$Lo$Prospect$

!   Large undrilled block: 7,192 km2 !   Proven petroleum system: multi-Tcf Chinese gas

fields immediately to east !   Shallow water (20 to 80 metres) !   Prospect exhibits Amplitude vs. Offset anomalies

in addition to Direct Hydrocarbon Indicators and offset multi TCF analogues

! Eni Partnership: !   Risk reducing 800km2 3D survey and well to be

drilled at no significant cost to Neon !   Exposure to huge resource potential with a

meaningful 25% working interest !   Work program will exceed commitments made to

Vietnam under the PSC

! Cua Lo to be drilled in 2013

Vietnam Block 105 (Neon 25%)

Block 105 Dongfang/LeDong Gas Fields

Netherland Sewell & Associates (Billion Cubic Feet Recoverable)

Low Best High Cua Lo 1088.0 3983.5 14221.6

Slide 12

Vietnam Farmout to Eni

Slide 13

!   Endorsement by a highly successful Supermajor ! Eni are the ninth largest oil and gas company in the world* !   Market capitalisation ~US$80 Billion !   Recent successes include multiple gas discoveries offshore Mozambique

(40 to 50 TCF), and a 150-250 MMBLS oil discovery in Egypt. !   Focused on growth in Asia-Pacific region

! Eni will fund: !   exploration drilling in both blocks, at nil to minimal net cost to Neon !   3D seismic surveys in each block to optimally locate the wells,

thereby increasing chance of exploration success !   Neon retains a 25% interest in each block !   As Operator Eni brings world-class technical and operational

capabilities, essential for efficient and early monetisation of a discovery

Corporate Strategy: To expose shareholders to large upside high quality opportunities with minimal capital dilution

*Source: Fortune magazine, 2011

Indonesia: High Impact Exploration

!   4,200km2 block located offshore Kalimantan, in prolific Kutei Basin

!   Neon working interest 42% (KrisEnergy 43%, Natuna Resources 15%)

!   Currently in Year 1 of three year term

!   Commitment to reprocess existing 3D, plus 500 km2 of new 3D seismic during a 3 year period

!   Shallow water and deep water petroleum plays

! Favourable “frontier” fiscal terms

!   Strong market and pricing for domestic gas

Slide 14

! Mature industry well over 100 years old currently produces ca. 630,000 bopd

! Much of the development completed without benefit of modern techniques

! Significant potential remains, e.g. Occidental’s San Joaquin Basin discovery (~250 MMboe)

Signal Hill Oil Field ca. 1923

California: Niche Play for a Niche Player

! Unconventional shale oil and gas potential

! Monterey formation estimated to contain more technically recoverable resources than Bakken or Eagleford*

! Small players achieve a competitive advantage through modern geoscience techniques not typically applied in mature onshore basins

*US Energy Information Administration, July 2011 Review of Emerging Resources: US Shale Gas and Shale Oil Plays

California Production: North San Ardo Field

! Cashflow from 100% owned North San Ardo oil field !   Production 300 to 500 bopd !   Heavy oil sold at premium to WTI !   Approx. 300 BOPD covers Neon operating

overheads !   Reversing natural production decline via:

!   Remedial works !   New development wells !   Thermal recovery

!   Implementing new technology !   3D visualisation !   Real-time geosteering ! Specialised well completion

Slide 16

Paloma Deep 1 Paloma Deep 2

!   Paloma Deep-1 testing confirms producible light oil and gas from Lower Antelope Shale, Lower Stevens Sand and Fruitvale Shale

!   Contingent Resource estimated at 26 MMbbls oil and 22 Bcf gas (recoverable, best case)

!   Three additional zones of interest remain to be tested

!   Paloma Deep-2 appraisal well completed on time on budget on prognosis: Testing

!   Paloma-3 well at TD 6,000 feet, tested shallow gas pay

Paloma Deep Discovery

PD 3 PD 1 PD 2

Paloma Deep Discovery: What Could it Be ?

Conceptual development based upon current estimate of conventional L. Stevens/Fruitvale reservoir Contingent Resource: 14 Million Barrels of Oil + 22 Billion Ft3 Gas Number of wells: 15 horizontal wells Cost per well (MMUS$): 7.5 First Production: Q2 2013 Peak Rate (BOPD): 5600 This would result in an NPV10 of $US 422 MM ($US 359 MM Net to Neon Interest)

Conceptual development based upon current estimate of the unconventional L. Antelope reservoir is likely to require many more wells and would likely be phased behind development of the conventional production as follows: Contingent Resource: 12 Million Barrels of Oil Number of wells: 22 horizontal wells Cost per well (MMUS$): 10 First Production: Q2 2014 Peak Rate (BOPD): 5400 This would result in an NPV10 of $US 239 MM ($US 203 MM Net to Neon Interest)

California Asset Base

!   Appraisal at Paris Valley oil field redevelopment project

!   9.1 Million Barrels of 2P reserves*

!   Exploration at Kettleman Middle Dome project, funded by 4 well farmout on a 2:1 basis

!   Ongoing Salinas Basin near-field exploration programme

!   Ongoing San Joaquin exploration & new venture programme

* MHA Petroleum Consultants’ report compiled by Leslie S O’Connor, President of MHA Petroleum Consultants, who is qualified in accordance with the ASX listing rule 5.11. Ms O’Connor, a practicing Petroleum Engineer and Geologist for 34 years, has given her consent to the release of the reserves contained in this report

Note: schematic for illustration purposes only and is subject to change as a consequence of operational limitations, shifts in commodity prices etc.

Activity On Multiple Fronts

North San ArdoFacility Upgrades

Seismic Programme

Thermal Recovery Operations

Well 19-27H

Well 18-27H

Well 23-27H

Well 20-27H RD2

Contingent wells

Salinas Basin ExplorationDeadman's Gulch Drilling

Lombardi East Drilling

Seismic Programme

Paloma Paloma Deep-1

Paloma Deep-2

Paloma Deep-3

Paris ValleyCPV Well 1

Kettleman Middle DomeFarmout

Well 36v-1

Well 58-5

Well 17-1

Well 17-1R

Vietnam Block 120 & 105Farmout Terms Agreed

Farmout Agreements Signed

3D Seismic Programme

Well 120

Well 105

Indonesia Tanjung Aru3D Seismic Programme

1Q 2013 2Q 20133Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012

In Summary

! Balanced Portfolio of Opportunities

! Exposure to high impact exploration in Southeast Asia

! Exposure to Unconventional Plays in California

! Competitive advantage in Southeast Asia and California

! Scale: Multiple “needle shifting” projects

! Short/medium and long term news flow

! Track record of delivering on promises

Slide 21

Ground Floor, 88 Colin Street, West Perth, W.A. Australia 6005

Tel : +61 8 9481 1176 Fax : +61 8 9481 7720 www.neonenergy.com

Slide 22

Contacts Ken Charsinsky - CEO

Ben Newton - CFO

neon energy limited -...

Documents