ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE: 6 May 2014

Tanjung Aru Update

Neon Energy Limited (ASX: NEN) advises that further to a default by its wholly owned subsidiary Neon Energy (Indonesia) Pty Ltd, in relation to an unpaid cash call, Operator KrisEnergy has issued a Notice of Withdrawal to Neon in relation to its interest in the Tanjung Aru PSC and Joint Operating Agreement.
The US$1,300,000 cash call was due for payment on 2 April 2014, and was principally to cover the costs associated with mobilisation of the 3D seismic vessel for the recently completed survey.
Neon has had a close working relationship with KrisEnergy for a number of years, and is extremely disappointed by this unexpected development. The Company made a "good faith" contribution of US$300,000 towards the relevant cash call on 4 April 2014, after discussion with KrisEnergy and on the basis that KrisEnergy would endeavour to provide Neon with sufficient leeway to pay the balance of funds, pending completion of the sale of the Company's Californian assets. Completion of the US transaction is expected within the next few days, at which point Neon would be adequately funded to remedy the default.
Neon will now approach KrisEnergy in an effort to remedy the situation, and will provide a further update once those discussions are complete.

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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