KrisEnergy, Eni resolve Vietnam dispute with Neon
Italy’s Eni and Singapore’s KrisEnergy have reached an agreement with Neon Energy to resolve a dispute regarding the settlement of the financial liabilities of Neon, subsequent to the Vietnamese drilling program conducted in late 2013 in Block 105-110/04 and Block 120.
In consideration for a full release from all liabilities Neon has agreed to pay US$5.75 million to Eni Vietnam and KrisEnergy, assign its working interest in the blocks, and remit the net proceeds from the Cua Lo-1 insurance claim (if and when that claim is settled). Upon completing the transaction Neon Energy’s cash balance will stand at approximately US$20.5 million.
More precisely, Neon Energy’s 25% working interests in Block 105 and Block 120 offshore Vietnam will be transferred to Eni Vietnam and KrisEnergy, proportionately.
The completion of such transfers is pending government approval. Upon completion, Block 105 will be held by Eni Vietnam (66.67%) and KrisEnergy 105 (33.33%) and Block 120 will be held by Eni Vietnam (66.67%) and KrisEnergy 120 (33.33%).
Neon Energy Managing Director, Ken Charsinsky, commented “We are pleased to have reached a settlement with Eni Vietnam and KrisEnergy, which allows the Company to now focus on a new growth strategy without constraint.”
Block 120 covers 8,574 sq km offshore central Vietnam, overlying the Quang Ngai Graben in the north and central section of the contact area and passing into the Phu Khanh Basin in the southern portion of the block. Water depths in the contract area range from 50 metres to 1,100 metres.
Block 105-110/04 covers an area of 7,192 sq km in the central Song Hong Basin offshore Vietnam where water depths range from 20 metres to 80 metres.