19 March 2014
Jill Hewitt
Senior Adviser Listings Compliance (Perth) Australian Securities Exchange
Exchange Plaza
2 The Esplanade
PERTH WA 6000
Dear Jill

PRICE & VOLUME QUERY

We refer to your letter dated 18 March 2014 received at approximately 9.50am (WST). As requested please find below the Company's response to the questions from ASX:
1. No, the Company is not aware of any additional information which, if known, could be an explanation for recent trading in the securities of the Company. However the Company would like to refer to the Company's ASX announcements regarding the recently completed drilling campaign in Vietnam, and associated cost overruns and contingent liabilities. As disclosed we are currently in negotiations with Operator Eni to determine final costs and Neon's remaining financial obligation. We anticipate being in a position to advise the market of the outcome of those discussions in due course. As a result of the current contingent liability, Neon Energy believes that shares may have been oversold in the market with the share price reaching a low of
2.2 cents on 12 March 2014. The recent price and volume increase may be associated with recognition of this overselling in the market.
The Company is preparing for all possible outcomes further to the final determination of its financial obligation associated with the Vietnam drilling campaign, and to that end, various options remain on the table. The chosen path forward will be announced at the conclusion of a strategic review of those options which is ongoing. This review includes possible asset divestment to ensure that Neon attains a strong balance sheet and effective working capital to conduct its core business functions.
Besides the information disclosed in our recent Preliminary Final Report update on
28 February 2014 and above, there has not been any material event or changes in the Company's affairs.

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.comE-mail: info@neonenergy.com

2. Not applicable.
3. Not that the Company is aware.

4. Yes, the Company is in full compliance with the listing rules. Yours sincerely

GABRIEL CHIAPPINI

Company Secretary

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.comE-mail: info@neonenergy.com

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