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EMERALD RESOURCES NL Capital/Financing Update 2007

Oct 3, 2007

64849_rns_2007-10-03_55238707-f84f-4994-8aeb-9c4d9684717a.pdf

Capital/Financing Update

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PANCONTINENTAL OIL & GAS NL

ASX Release

4 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: $0.059 Market cap: $ 26M Cash at bank: $3.6M Issued shares: 444M

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 Valentine-1 exploration well have completed and that drilling operations at the Stokes Bay-1 well bore have commenced.

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 Ian Cornelius

Drilling in the Stokes Bay-1 sidetrack commenced at 0930 hrs on 3 October 2007 and the current plan is to drill to 2,500mMDRT. 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 look forward to sidetracking the well to the Stokes Bay-1 target location to further evaluate the very strong gas shows and indications of porosity in the intersected intervals of the Anderson and Laurel Formations of the Valentine-1 well bore. These shows were considered very encouraging for the targets of the Stokes Bay 1 well which will be encountered as planned substantially up-dip in the Stokes Bay structure.”

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.