Jason Tyrone Spence, of Millburn Street in Cookstown, faced a charge of murder as he appeared at Derry Magistrates’ Court on Thursday.
Mr O’Neill, 56, died after being stabbed at a property in Kilrea, Derry, on Tuesday evening.
The court heard that the accused is the son of Mr O’Neill’s partner.
Spence indicated he understood the charge as it was put to him.
A detective sergeant said he believed he could connect the accused to the charge.
The prosecution said Mr O’Neill died after an “unprovoked attack” with a knife.
They said Spence drove away from the scene and was later arrested at his home, and that blood was found on his person and his clothing.
There was no application for bail and the defendant was remanded in custody to Maghaberry prison.
The court also heard that Spence has a history of paranoid schizophrenia.
Psychiatric and psychological assessments were ordered to be carried out on the accused.
District Judge Barney McElholm said the court extended condolences to Mr O’Neill’s partner, family and friends, describing the murder as “a very tragic incident”.
“The law will take its course,” he added.
The case will be reviewed on Wednesday, September 20, 2023 at Magherafelt Magistrates’ Court.
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