Neon Energy Ltd. (NEN), the explorer that formed a partnership in Vietnam last year with Eni SpA (ENI), plans to look next for a company to help fund the development of its natural gas prospects off Indonesia.
Neon expects to decide this year whether to proceed with drilling at the Tanjung Aru block in Indonesia’s Kutei Basin, where it has two gas finds, Ken Charsinsky, managing director of the Perth-based company, said yesterday by phone.
“With two discoveries already on the block, and prospects that look like those discoveries, we think there’s a pretty good chance we’ll be able to go to the next level, the drilling phase,” Charsinsky said. “There have been some inquiries in joining us on that one.”
Neon is focused on Indonesia, California and Vietnam, where it reached an agreement last June to bring in Eni, Italy’s biggest oil company, on a project. The areas off the coast of Vietnam that Neon is exploring are near Exxon Mobil Corp. (XOM) natural gas discoveries, according to Neon’s website.
Neon, whose shares closed yesterday at 25.5 cents in Sydney, valuing the company at A$140 million ($143 million), has six buy ratings from analysts, without any hold or sell ratings, according to data compiled by Bloomberg. It traded at 26 cents at 10:30 a.m. local time.
The equivalent of more than 12 billion barrels of oil has been discovered in Indonesia’s Kutei Basin, according to Neon’s website. Neon has a 42 percent stake in the project in the basin, while KrisEnergy Ltd. has 43 percent and Natuna Ventures Pte Ltd. has 15 percent, according to Neon’s website.
Neon expects drilling of the Cua Lo prospect off Vietnam to start in June and drilling at a second field in the country to go-ahead in August, the company said earlier this month. Neon holds 25 percent of the Vietnamese permits, while Eni owns 50 percent and KrisEnergy has 25 percent.
The Australian explorer also may bring in a partner in California and has started giving companies access to the data, according to Charsinsky, a former Noble Energy Inc. executive. Costs to develop assets there have been higher than the company had anticipated, he said.
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