Neon Energy Ltd, ABN: 49 002 796 974, Ground Floor, 88 Colin Street, West Perth, 6005 Ph: +61 (08) 9481 1176 Fax: +61 (08) 9481 7720 PO Box 1789, West Perth, 6872 Website: www.neonenergy.com E-mail: info@neonenergy.com

ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE: 20 May 2013

BLOCK 105 INVESTOR UPDATE

Highlights Ensco 107 contracted to drill Cua Lo gas prospect, commencing June 2013 Preliminary 3D seismic interpretation/analysis complete Additional prospective zones identified within Cua Lo Neon Energy Limited (ASX: NEN) is pleased to provide the attached presentation regarding the results of the recent 3D seismic programme located within the Company’s offshore Vietnam Block 105-110/04 (“Block 105”).

The 800km2 3D seismic survey was completed in mid 2012; designed to delineate a specific well location for the Cua Lo gas prospect, located on the eastern side of the block in approx. 80 metres of water. The resulting high quality 3D seismic dataset has resulted in an improved understanding of the potential reservoir and hydrocarbon distribution, and has led to the identification of additional potential Miocene/Pliocene pay zones. All potential pay zones are supported by Direct Hydrocarbon Indicators (DHIs); seismic attributes often associated with the presence of hydrocarbons.

Map of Block 105 Showing Location of Cua Lo Prospect and 3D Seismic Area Cua Lo is located some 40 km southwest of the Chinese Dongfang gas fields. Both Cua Lo and Dongfang are adjacent to, and share, an extensive deep hydrocarbon source “kitchen”. The main structure at Dongfang hosts reserves of 3.5 TCF gas within fine grained Pliocene clastic reservoirs that have produced at individual well rates of up to 168 mmscfd (million standard cubic feet per day) of gas. Prospective reservoir zones at Cua Lo may be of superior quality to those at Dongfang, as they are believed to have been deposited in a more proximal location relative to the sediment source and are therefore likely to be coarser grained.

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In May 2011 Netherland Sewell & Associates Inc. (NSAI) completed a Prospective Resource Assessment* of Block 105, confirming gross unrisked prospective recoverable resources for Cua Lo of 3.9 TCF gas (best estimate) to 13.9 TCF gas (high estimate). NSAI’s assessment was based upon the 2D seismic data that was available at the time, and is based only on two prospective zones.

While the areal extent of the prospect remains broadly comparable to that assessed by NSAI, the identification of additional prospective zones from the new 3D seismic volume provides scope for the discovery of additional volumes.

Managing Director Ken Charsinsky commented “The new 3D seismic data validates Neon’s long held view regarding the potential of the Cua Lo prospect. Exploration success at Cua Lo could be transformative for Neon Energy, and as such we are excited that drilling will commence as early as late June 2013.”

The Cua Lo well location has been agreed by the joint venture and will be announced pending final approval by Petrovietnam. The well will be drilled with the Ensco 107 jackup rig, commencing June 2013. Pursuant to the terms of the farmout agreement with Eni, Neon will be carried through the drilling of the Cua Lo well up to a gross cost cap of US$25 million. Any costs in excess of the cost cap will be borne by the parties as per their respective working interests, which are as follows:

Eni Vietnam B.V. (Operator) 50% Neon Energy (Song Hong) Pty Ltd 25% KrisEnergy (Song Hong 105) Ltd 25% _________________________________________________________________________ Enquiries: Managing Director: Ken Charsinsky

Chief Financial Officer: Ben Newton

Telephone: 08 9481 1176

Website: www.neonenergy.com

*The report by NSAI was compiled by Mr. Allen E. Evans, Jr.,Vice President – Senior Technical Advisor, and Mr. Eric J. Stevens, Petroleum Engineer, of NSAI. Mr. Evans and Mr. Stevens are qualified in accordance with the ASX listing rule 5.11. Mr. Evans a practicing geologist for 28 years, has given his consent to the release of the Prospective Resources estimates contained in this report, as has Mr. Stevens, a practicing engineer for 9 years. The estimates of Prospective Resources included in this announcement have been prepared in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum Engineers (SPE). The PRMS defines Prospective Resources as those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations.

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Neon Energy Limited

Date: 20 May 2013

Block 105 Investor Update

3D Seismic Results

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Neon Energy Limited Offshore Vietnam: Block 105-110/04

•  Large block with no drilling to date •  Located within Song Hong Basin: a

large, gas prone hydrocarbon province

•  Adjacent to multi-TCF Dongfang gas fields

•  ExxonMobil and Vietgazprom gas discoveries to south

•  Shallow water (<100 metres)

•  Potential for large accumulations of gas •  Inboard oil play, supported by drilling

results in adjacent block to north

Ham Rong commercial oil

discovery

Appraisal of significant gas

discoveries

Farmout to Eni

Oil discovery on block

Exploration drilling

scheduled June 2013

Major gas discovery by ExxonMobil

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Neon Energy Limited Neon’s History •  Neon signed Production Sharing Contract in January

2010 •  Initially Operator and 90% interest holder

•  Farmed down to KrisEnergy Ltd in 2010 to fully fund 2D seismic commitment

•  In 2012 Neon & KrisEnergy farmed down to major Eni (now Operator)

•  Neon retains a 25% working interest

•  Neon fully carried through recent 3D seismic programme, designed to delineate drilling location on large Cua Lo gas prospect

•  Neon substantially carried through drilling of Cua Lo*

Ensco 107 jackup rig will drill Cua Lo prospect

commencing June 2013

Image: Ensco 107 jackup rig in transit

* Subject to US$25 million cost cap

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Neon Energy Limited Prospective Resources

•  Netherland, Sewell & Associates Inc. (NSAI) completed independent assessment of prospective recoverable resources in 201, based on the 2D seismic available at the time

•  7 gas leads and 3 oil leads assessed

Block 105 Cumulative Unrisked Prospective Recoverable Resources

Prospect Low Estimate Best Estimate High Estimate

Gas leads (7) 1.7 TCF 6.3 TCF 21.4 TCF

Oil leads (3) 40 MMbbls 197 MMbbls 650 MMbbls

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Neon Energy Limited Seismic Coverage

BLOCK 105-110/04

BLOCK 111/04 (Vietgazprom)

BLOCK 104-109/05 (Premier Oil)

Dongfang gas fields

Ledong gas fields

2012 3D seismic survey (800km2)

Premier Oil Jackfruit well: good oil shows in Oligocene

2D seismic grid

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Neon Energy Limited Primary Prospects

Song Ca trend oil

prospects

“Prospect 5” gas prospect

Cua Lo gas prospect

Cua Lo high case area

Dongfang main structure, 3.5 TCF

gas reserves

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Neon Energy Limited Cua Lo Depositional Environment

Mio/Pliocene Slope Fan Complex

Channels

Shelf break Sediment source

Cua Lo depositional

setting

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Neon Energy Limited Hydrocarbon Play

•  Cua Lo target depths 1700m – 3200m

•  Song Ca target depths 1500 – 3000m

Dongfang gas fields

Song Ca oil

prospects Cua Lo &

Prospect 5 gas prospects Late Pliocene

Pleistocene

A A’

A

A’

Song Hong Basin Schematic Cross-Section

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Neon Energy Limited

A

A’

A’ A Pliocene Channels

Mio/Pliocene Slope Fan Complex

Prospect 5

Mio/Pliocene Slope Fan Complex

Main R

eservoir Objectives

Pliocene Channels

Cua Lo 3D Seismic Example In-Line

•  3D seismic confirms presence of widespread amplitude and Amplitude vs Offset (AVO) anomalies

•  Well defined stratigraphic traps at multiple levels For

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Neon Energy Limited

A’ A Pliocene Channels

Miocene 4-way dip closure

Mio/Pliocene Slope Fan Complex

Cua Lo 3D Seismic In-Line: Stratigraphic Elements

•  Sandstone reservoirs deposited within submarine fan system •  Subsequently encased in shales to form a stratigraphic trap

A

A’

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Amplitude cut-off coincident with structure over southern portion of

prospect Sinuous geo-bodies extend beyond primary

amplitude area, indicating channelled

reservoirs

Cua Lo 3D Perspective View

Potential Cua Lo well trajectory targeting high amplitudes at multiple

levels

RMS amplitude draped on 4.1 Million Yrs surface

0 10 km

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Neon Energy Limited Cua Lo 3D Perspective View

RMS amplitude draped on 4.2 Million Yrs surface

High amplitudes over significant

areal extent

0 10 km

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Neon Energy Limited Cua Lo AVO Anomalies •  Seismic Amplitude vs Offset (AVO) anomalies can be indicative of the presence of

hydrocarbons, particularly gas •  Generally seismic amplitude decreases with increasing distance between the

seismic source and receiver (the offset) •  In a positive AVO anomaly amplitude increases with offset •  In hydrocarbon bearing reservoirs this is due to lower acoustic impedance relative to

surrounding formations •  The Cua Lo prospect exhibits multiple positive AVO anomalies

NEAR MID FAR

Objective 1

Objective 2

Cua Lo example of increasing seismic amplitude from near to far offset offset

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Neon Energy Limited Cua Lo Prospective Recoverable Resources

•  Netherland, Sewell & Associates Inc. (NSAI) completed independent assessment of Cua Lo area prospective recoverable resources in 2011

•  Cua Lo has prospective recoverable resources of up to 13.9 TCF

•  NSAI’s assessment assumed two prospective intervals •  3D seismic reveals additional prospective intervals

•  Prospective Resources supported by 3D seismic

Prospect Low Estimate Best Estimate High Estimate

Cua Lo 1.0 TCF 3.9 TCF 13.9 TCF

“Prospect 5” 217 BCF 787 BCF 2.5 TCF

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Neon Energy Limited Commercialisation

•  Low cost development in shallow water provides strong economic fundamentals

•  Local gas demand will exceed supply from 2016

•  Domestic gas prices strengthening to international levels

•  Gas most likely commercialised via power generation

•  LNG export may be an option if a very large resource is proven

•  Dongfang’s year 1 production was 2.4 Billion m3 (84 Bcf)

Source Hien, Ngo Anh. (2010). Vietnam Member Economy Report, GASEX 2010, Taipei.

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Neon Energy Limited Summary

•  Block 105 is considered highly prospective for gas •  Significant follow up potential with inboard oil play •  Cua Lo prospect has prospective resources of up

to 13.9 TCF* •  Neon substantially carried through exploration

well, commencing June/July 2013 •  Commercialisation aided by strong gas demand

with potential for LNG export in upside case

•  Exploration success at Cua Lo could be a transformative event for Neon Energy

3D Seismic Perspective View of Cua Lo, Showing Extracted Amplitude Anomalies

* Based on assessment by NSAI

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Neon Energy Limited Prospective Resource Estimates

Prospective Resource Estimates  The report by NSAI was compiled by Mr. Allen E. Evans, Jr.,Vice President – Senior Technical Advisor, and Mr. Eric J. Stevens, Petroleum Engineer, of NSAI. Mr. Evans and Mr. Stevens are qualified in accordance with the ASX listing rule 5.11. Mr. Evans a practicing geologist for 28 years, has given his consent to the release of the prospective resources estimates contained in this report, as has Mr. Stevens, a practicing engineer for 9 years. The estimates of prospective resources included in this presentation have been prepared in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum Engineers (SPE). The PRMS defines prospective resources as those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations.

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Neon Energy Limited 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.

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Neon Energy Limited

Neon Energy Limited Ground Floor, 88 Colin Street, West Perth, Western Australia 6005 Phone : +61 8 94811176

info@neonenergy.com www.neonenergy.com

Contact us

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