ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE: 10 April 2014

Highlights Sale of Californian Assets

! Sale of Californian assets raises US$26,950,000

! Proceeds to fund expanded international new ventures program

! Culmination of process that commenced in mid 2013

Neon Energy (ASX: NEN) is pleased to advise that the Company has executed a binding Purchase & Sale Agreement with a major Californian exploration and production company, for the sale of the Company's Californian assets with a purchase price of US$26,950,000. The buyer, a subsidiary of a publicly listed company, wishes to remain anonymous for commercial reasons.
The agreement has an effective date of 1 January 2014 and is conditional upon receiving consent from various lessors to assign the oil and gas leases to the buyer. Closing of the agreement is anticipated to be completed within the next few weeks.
In mid 2013 Neon Energy appointed Roth Capital Partners to consider various initiatives to realise additional value from the Company's Californian asset portfolio. As a result of the review process it was determined that the significant capital investment required to achieve a material return on investment from those assets would be more prudently deployed in capturing high potential exploration assets elsewhere in the world, consistent with the Company's stated strategy.
Together with other cost reductions recently implemented, divestment of the Californian assets will achieve a reduction in group corporate overheads of some 40%. Neon Energy will be well funded to embark on a new phase of growth, and does not expect to raise further funds in the foreseeable future.
Neon Energy Managing Director. Ken Charsinsky, commented "We are pleased to have executed this transaction, which provides a stable funding platform from which to develop opportunities to create value for shareholders."

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Enquiries:

Managing Director: Ken Charsinsky Chief Financial Officer: Ben Newton Telephone: 08 9481 1176
Website: www.neonenergy.com

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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