Neon Energy shares shine on Vietnam gas discovery THE market has responded to encouraging exploration drilling results from the Cua Lo gas prospect off Vietnam by sending shares in Perth-based junior Neon Energy 6.5c, or 25 per cent, higher to 32c. Neon holds a 25 per cent interest in the exploration block (105) that contains Cua Lo in a joint venture led by Italian energy giant Eni (50 per cent). Singapore's KrisEnergy holds the remaining 25 per cent. Ahead of the prospect being tested by the drill bit, Cua Lo had a best gas-in-place estimate of 3.9 trillion cubic feet, with a high side estimate of 13.9tcf. It sits 40km southwest of China's producing Dongfang gasfield. Neon said yesterday that the well had so far encountered gas shows in each of the upper three zones of interest, and that a gas "kick" was felt in the well at a depth of 2568m. Eni as operator has stabilised the well and now plans to drill a sidetracked hole at a point just above the gas kick zone, allowing the well to progress to two deeper zones of interest, as well as collect samples and data from the upper zones. Neon said it was "encouraged by the presence of gas encountered in the zones drilled to date." It said the ability of the reservoir to deliver gas could only be determined by production testing. A decision on a production test will be made once the well reaches its final depth (planned for 2826m), and evaluation of data and fluid samples is complete. The same joint venture involving Neon is also planning to test the oil potential of another exploration block. That block (120) has a proven oil system thanks to a well drilled by BHP Petroleum in 1993. Three oil prospects have been defined in the block. At yesterday's higher level for the stock, Neon is a $177 million company. Up until the Vietnam program, it was best known for its current cashflow mainstay from modest oil production in California.