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EMERALD RESOURCES NL Capital/Financing Update 2007

Oct 10, 2007

64849_rns_2007-10-10_56933f3a-ba64-457a-88e9-c34afed1e1fd.pdf

Capital/Financing Update

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ASX RELEASE

Release Date: 11 October 2007 To: Australian Stock Exchange Ltd No of Pages: 3 From: Eric Streitberg Re: Stokes Bay-1 Update

Please find attached an update on the Stokes Bay-1 well.

The attached release will also be available on the Company’s website at; www.arcenergy.com.au.

For inquiries please contact:

Eric Streitberg, Managing Director Telephone +61 8 9480 1300 Freecall 1800 337 330 Email [email protected]

About ARC Energy Limited ARC Energy is one of Australia’s pre-eminent energy companies, owning and operating oil and gas interests in the Perth, Canning and Bass basins, and internationally. Listed on the Australian Stock Exchange with a market capitalisation of approximately A$450 million, ARC has an aggressive onshore and offshore exploration and development drilling program. It continues to drive increased shareholder value by the early adoption of innovative technical and commercial practices.

Page 1

Level 4, 679 Murray Street, West Perth, Perth Western Australia 6005 Freecall: 1800 337 330 Tel: 61 8 9480 1300 Fax: 61 8 9480 1388 Website: www.arcenergy.com.au, Email: [email protected], ASX Code: ARQ

STOKES BAY-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

Date: 11thOctober 2007
Permit: R1
Well Location: Lat : 17o08’ 23.46”SLong : 123o42’ 32.40”E
Directional offset to target: 1024 metres
Elevation: Ground Level is 12.4mAMSLRotary Table is 18.1mAMSL
Proposed Total Depth(measured KB): 2505 metres
Prognosed drilling time: 15 days
Spud Date: 0930 hrs, WST 3 October 2007
Present Depth at 0600 hrs: 1841mMD
Time of Reporting: 0600 hrs, WST 11thOctober 2007
Operations Since LastReport: Drilled 8 1/2” hole from 1226m to 1840mMD. Pipe stuck at858m while pulling out of hole for a new drilling bit. Stringwas freed and recovered. A cleanout trip was made duringwhich 1m of new formation was drilled prior to POOH for anew drilling assembly.
Current Operations: RIH with new BHA and bit to drill ahead in 8 ½” hole from1841mMD
Hydrocarbon indications: None
Comment: N/A
Participants in the well(post earning): Empire Oil and Gas NL - 14.8%ARC Energy Limited - 38.95% (Operator)Emerald Oil & Gas NL - 12.75%Pancontinental Oil & Gas NL - 10.0%Phoenix Resources PLC - 10.0%First Australian Resources Limited - 8.0%Indigo Oil PtyLtd - 5.5%

Page 2

- Canning Basin Stokes Bay 1

Spud Date: 09:30hrs 3[rd] October 2007 DATE : 11/10/2007

General Well Data

Planned TD : 2500mMD / 2130m TVSS Drill Floor Elevation : 18.1m amsl

Summary @06:00hrs WST

RIH with new bit to continue drilling 8 ½” hole from 1841mMD

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----- Start of picture text ----- Canning Basin Stokes Bay-01(Exploration Well from KO)Predicted Progress Stokes Bay 1Actual Progress Stokes Bay 1Bli0200Spud Stokes Bay -1 at 09:30hrs 3rd October 20074006009 5/8" @808mMDin Valentine 1800 KO Stokes Bay-1 ftom 975mMD at 09:30hrs 03/10/0710001200 4/10/07 Drilling 8 1/2" at 1226m1400 5/10/07 Drilling 8 1/2" at 1439m1600 6/10/07 Drilling 8 1/2" at 1652m1800 7/10/07 Drilling 8 1/2" at 1819m Anderson Formation Marine Member8/10/07 Drilling 8 1/2" at 1840m Primary Target9/10/07 Work stuck pipe. 10/10/07 POOH w /Fish11/10/07 RIH w /new BHA to drill2000220024002600Expected TD 2500mMD 2130mTVSSLog & Evaluate280030000 5 10 15 20 25 30 35 40DaysDepth (Measured below Rotary Table in metres)----- End of picture text -----