EMERALD RESOURCES NL — Capital/Financing Update 2007

Sep 19, 2007

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20 Sept 2007

ASX ANNOUNCEMENT AND MEDIA RELEASE

ACTIVITY UPDATE

Lake Long Project, Lafourche Parish, South Louisiana Production commences from SL 328 # 9 Deep Well (FAR 10.1875%)

Following construction of surface installations, production has commenced from the Middle Hollywood Sand interval of the SL 328 #9 well at Lake Long Field.

The well has been placed on line and is producing 1.825 million cubic feet of gas and 50 barrels of condensate per day on a restricted 7/64 inch choke at a flowing tubing pressure of 4,425 psi. The operator plans to open up production during the next few weeks to a planned rate of 4 million cubic feet per day with associated condensate.

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The Upper Hollywood Sands (where 13 feet of additional net pay has been logged) will be produced at a later date.

Interests in the well are also held by the Operator, Kriti Exploration Inc and ASX listed entities Amadeus Energy Limited and Sun Resources NL.

Kicker Prospect, Vermillion Parish, South Louisiana (FAR 5%) Surface Installation complete – Marceaux #1 well turned to sales

Construction of surface production facilities for the Marceaux #1 well has been completed. Production tubing has been run and gas lift valves installed to provide for artificial lift over the life of the well.

Pressure analysis studies have been performed and subject to establishing production history there remains the possibility that a further one or two well locations exist downdip from the Marceaux #1 well.

The well was turned to sales on 14 September 2007 on a very restricted 4/64 inch choke at a flowing tubing pressure of 5150 psi.

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FAR ASX Release 20Sept 2007 P.2

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Prior to running tubing approximately 4,500 barrels of oil were produced into frac tanks over a 6 day period and trucked by Central crude to sales point.

On turning the well to sales the well sanded up suggesting either a packer failure or an issue with the gas mandrills. A coiled tubing unit is being mobilised to start cleaning out tubing and place the well back on line.

The Operator is Neumin Production Company of Lafayette, Louisiana. FAR’s working interest reduces to 3.75% after payout. All other participants are North American entities.

Valentine-1, Onshore Canning Basin, Western Australia (FAR 8%) Drilling ahead at 3,241 metres

FAR has been advised by ARC Energy Limited that current operations at the well comprise drilling ahead at 3,241mMD.

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

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FAR ASX Release 20Sept 2007 P.3

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.

Stokes Bay 1

The Stokes Bay 1 well is planned to 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.

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

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FAR ASX Release 20Sept 2007 P.4

VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

	VALENTINE-1 DCANNING BASIN, W	VALENTINE-1 DCANNING BASIN, W	RILLING REPORTESTERN AUSTRALIA	RILLING REPORTESTERN AUSTRALIA	RILLING REPORTESTERN AUSTRALIA
Date:			20 September 2007
Permit:			R1
Well Loc
	ation:		Lat : 17o08’ 23.46”SLong : 123o42’ 32.40”E
Directio	nal offset to target:		0 metres
Elevatio	n:		Ground Level is 12.4mAMSLRotary Table is 18.1mAMSL
PrognosKB):	ed Depths (measured	Top primary obj	ective	Total depth
		3,222 metre	s	3,407 metres
Prognos	ed drilling time:			25 days
Spud Da	te:		1230 hrs, WST 12 August 2007
Present	Depth:		3,241mMD
Time of	Reporting:		0600 hrs, WST 20 September 2007
Operatio	ns Since Last Report:	Directionally drilledirectional assem	d to 3241m. Changed the drill bit and reconfigurbly and now preparing to recommence drilling a		ed thehead
Current	Operations:		Drilling Ahead
Hydroca	rbon indications:		None
Commen	t:	Lithologies presentlyclaystones of probablThe target Virgin HillsCorrelation of the newequivalent well (50 kmobjective is now progchange in prognosedifdii	being drilled are predominantly tight limestones ae Devonian age with minor mud gas shows obseFormation clastic section has yet to be intersectValentine 1 stratigraphy with Puratte 1; the moss away); indicates that the top of the Virgin Hillsnosed slightly deeper at approximately 3315m Mdepth is not structurally significant and reflects thf ihd dh i dl		nd minorrved.ed.tclasticD. Thised basin.
		uncertantyoprect	on o stratgrapyan epts n an unerexpore
Participa(post ea	nts in the wellrning):	ARC Energy LimitedEmpire Oil and GasEmerald Oil & Gas NPancontinental Oil &Phoenix Resources PFirst Australian ResoIndigo Oil PtyLtd - 5.	- 38.95% (Operator)NL - 14.8%L - 12.75%Gas NL - 10.0%LC - 10.0%urces Limited - 8.0%5%
	A time versus depth chart follows:

A time versus depth chart follows:

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FAR ASX Release 20Sept 2007 P.5

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

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