EMERALD RESOURCES NL — Capital/Financing Update 2007

Sep 26, 2007

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27 September 2007

ASX ANNOUNCEMENT AND MEDIA RELEASE

ACTIVITY UPDATE

Valentine-1, Onshore Canning Basin, Western Australia (FAR 8%) Conducting logging operations

FAR has been advised by ARC Energy Limited that current operations at the well comprise conducting electric wireline logging operations.

A Drilling Report on the Valentine well is contained in the attached well summary sheet.

Stokes Bay 1 (FAR 8%)

The Stokes Bay 1 well will be drilled by sidetracking from the Valentine-1 wellbore after the completion of drilling operations at Valentine 1. Stokes Bay 1 is planned as a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment 1 well and will be drilled as a deviated well with a total depth of approximately 2,500 metres. Point Torment 1 was drilled in 1992 and subsequently flowed gas at a rate of up to 4.3 million cubic feet of gas per day from the Carboniferous aged Anderson Formation sandstones. Subsequent tests of these sands produced ambiguous information on potential volumes and reservoir quality and the Stokes Bay 1 well is designed to provide a definitive test of the reservoir quality and extent of the accumulation.

The very strong gas shows and indications of porosity in the shallower intervals of the Anderson and Laurel Formations which were encountered as planned substantially down-dip in the Valentine-1 well bore are considered highly encouraging for the targets of the Stokes Bay 1 well.

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FAR ASX Release 27 Sept 2007 P.2

VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

		SIN WESTERN	AUSTRALIA	AUSTRALIA
		,
Date:		27 S	eptember 2007
Permit:			R1
Well Location:	Lat : 17o08’ 23.46”SLong : 123o42’ 32.40”E
Directional offset to target:	0 metres
Elevation:	Ground Level is 12.4mAMSLRotary Table is 18.1mAMSL
Spud Date:	1230 hrs, WST 12 August 2007
Final Depth at 0600 hrs:	3430mMD
Time of Reporting:	0600 hrs, WST 27 September 2007
Operations Since LastReport:	Conditioned hole prior to logging
Current Operations:	Conducting electric wireline logging operations
Comment:	The total depth of 3430mMD was reached at 09:00hrs 25thSeptember 2007
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%

For information on FAR’s drilling activities visit our website at www.far.com.au

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