Shares in junior oil and gas explorer Neon Energy have surged over 70 per cent on the news that the company had agreed to pay $US5.75 million to its Vietnamese joint venture partners, settling financial liabilities.
In January, Neon said drill stem tests conducted at its Cua Lo-1 exploration well offshore Vietnam had produced undesirable results, and development was unlikely to be carried out.
Exploration of the block was carried out through a joint venture partnership with operator Eni Vietnam and KrisEnergy.
Neon said that, following the completion of the transaction, its cash balance would stand at about $US20.5 million.
The company said it had completed an extensive restructuring of corporate overheads, including salary reductions for management and redundancies for a number of staff positions.
“Following the closure of (our) Bakersfield office, expected to be finalised during Q3 2014, corporate overheads are expected to be around $US2.5 million per annum, representing a 65 per cent reduction,” Neon said in a statement.
Neon’s share price last traded at 2.9 cents per share at 12:20pm.
