EMERALD RESOURCES NL — Capital/Financing Update 2007

Sep 23, 2007

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24 September 2007

ASX ANNOUNCEMENT AND MEDIA RELEASE

ACTIVITY UPDATE

Valentine-1, Onshore Canning Basin, Western Australia (FAR 8%) Drilling ahead at 3,382 metres

FAR has been advised by ARC Energy Limited that current operations at the well comprise drilling ahead at 3,382mMD.

Valentine 1 is located approximately 20 kilometres north of the township of Derby in northwest Western Australia’s Kimberley region.

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The primary reservoir objective of Valentine 1 is the Late Devonian aged Virgin Hills Formation. Valentine 1 is designed to intersect the interpreted Virgin Hills sandstones and carbonates near the structural crest of the prospect.

The Valentine prospect is a large lowside fault closure that is mapped in both the EP104 and R1 permits and extends over an area of some 66 square kilometres along the Pinnacle fault system. The Valentine reservoir objective is interpreted to be a slope fan / marine sand body which has a very distinctive seismic signature. The principal risk on the prospect is interpreted to be the stratigraphic updip seal mechanism, but the distinctive seismic signature of the objective section and the proven good petroleum source potential of the underlying Gogo Formation shales, together with the large potential hydrocarbon volumes, make it an attractive target.

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

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FAR ASX Release 24 Sept 2007 P.2

VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

Date:	24 September 2007	24 September 2007
Permit:	R1
Well Location:	Lat : 17o08’ 23.46”S Long : 123o42’ 32.40”E
Directional offset to target:	0 metres
Elevation:	Ground Level is 12.4mAMSL Rotary Table is 18.1mAMSL
Prognosed Depths (measured KB):	Top primary objective	Total depth
	3,222 metres	3,407 metres
Prognosed drilling time:	25 days
Spud Date:	1230 hrs, WST 12 August 2007
Present Depth at 0600 hrs:	3,377mMD
Time of Reporting:	0600 hrs, WST 24 September 2007
Operations Since Last Report:	Directionally drilled from 3241m as of 20/9/07 to 3,377m on 22/9/07 when drilling stopped due to break-down of top drive hydraulic unit.
Current Operations:	At 0600 hrs this morning (24/9/07), repairs were almost complete and by 0700hrs the well was drilling ahead at 3382m MD.
Hydrocarbon indications:	None
Comment:	Lithologies are predominantly tight dolomites and minor dolomitic sandstones and claystones, of Devonian age; with minor mud gas shows observed. The primary reservoir objective; porous sandstones of the Virgin Hills Formation have not been intersected in the well to date.
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%

A time versus depth chart follows:

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FAR ASX Release 24 Sept 2007 P.3

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

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