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EMERALD RESOURCES NL Capital/Financing Update 2007

Oct 10, 2007

64849_rns_2007-10-10_482b8454-7f59-47c1-8365-31ecfce57625.pdf

Capital/Financing Update

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PANCONTINENTAL OIL & GAS NL

ASX Release

11 October 2007

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www.pancon.com.au

MARKET DATA

Stokes Bay-1 Exploration Well Drilling Update

ASX: PCL

12 month high: $0.085 12 month low: $0.054 Market cap: $ 25M Cash at bank: $3.6M Issued shares: 444M

PROJECTS

Australia Onshore Canning Basin Offshore Carnarvon Basin

Kenya Offshore Lamu Basin

Malta Offshore Chebba Marin Basin

Namibia Offshore

DIRECTORS & MANAGEMENT

David Kennedy Chairman

Peter Munachen Finance Director

Barry Rushworth New Ventures Director

Pancontinental Oil and Gas NL (ASX: PCL) wishes to advise that Joint Venture (JV) partner and operator of the EP 104 & R1 Onshore Canning Basin project, Arc Energy (ASX: ARQ), has announced that operations at the Stokes Bay-1 well bore are continuing with the well bore currently at a depth of 1,841m.

Drilling in the Stokes Bay-1 sidetrack commenced at 0930 hrs on 3[rd] October 2007 and the current from a kick-off depth of 975mMD. Interests in R1 and EP104 post the Valentine-1 well farm-in earning program are:

ARC Energy Limited (Operator) 38.95%
Empire Oil and Gas NL 14.8%
Emerald Oil & Gas NL 12.75%
Pancontinental Oil & Gas NL 10%
Phoenix Resources PLCFirst Australian Resources Limited 10%8%
Indigo Oil Pty Ltd 5.5%

Pancontinental General Manager, Matthew Battrick said: “We drilled 8 1/2” hole from 1226m to 1840mMD since the last report but suffered stuck pipe at 858m while pulling out of hole for a new drilling bit. The drill string was freed and recovered. A cleanout trip was made during which 1m of new formation was drilled prior to POOH for the new drilling assembly. We are now running in with a new bit to drill ahead in 8 ½” hole from 1841mMD.”

Ian Cornelius

Non-executive Director

Andy Svalbe Non-executive Director Matthew Battrick General Manager

Enquiries:

Matthew Battrick General Manager Tel: 08 9227 3220, Fax: 08 9227 3211 Email: [email protected]

CONTACT DETAILS

Pancontinental Oil & Gas Ground Flr 288 Stirling St Perth Western Australia T: +61 8 9227 3220 F: +61 8 9227 3211 E: [email protected]

The summary report on the oil and gas projects is based on information compiled by Mr M A Battrick, BSc, MAAPG, MPESA, MAICD, MPESGB, General Manager of Pancontinental Oil & Gas NL. Mr Battrick has the relevant degree in geology and has been practising petroleum geology for 26 years. Mr Battrick is a full-time employee of Pancontinental Oil & Gas NL and has consented in writing to the inclusion of the information stated in the form and context in which it appears.