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EMERALD RESOURCES NL Capital/Financing Update 2007

Sep 3, 2007

64849_rns_2007-09-03_3c536408-512a-45fe-95c7-3a62377b27cf.pdf

Capital/Financing Update

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ASX RELEASE

Release Date: 4 September 2007 To: Australian Stock Exchange Ltd No of Pages: 3 From: Eric Streitberg Re: Valentine-1 Update

Please find attached an update on the Valentine-1 exploration well.

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

For enquiries please contact:

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

VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

Date: 4 September 2007 4 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: 2,589mMD
Time of Reporting: 1200 hrs, WST 4 September 2007
Operations Since Last
Report:
Drilled 8 ½” hole from 2,340 to 2,589mMD
Current Operations: Wiper Trip
Hydrocarbon indications: Further drilling through the claystones and limestones of the
Fairfield Group has revealed additional elevated gas
readings at 2295m, 2354m, 2404m, 2415m and 2470m MD,
each representing an interval of several metres. A wiper trip
is presently being run to condition the hole prior to running
an intermediate wireline logging suite to evaluate the
significance of these hydrocarbon indications.
Participants in the well
(post earning):
ARC Energy Limited - 38.95% (Operator)
Empire Oil and Gas NL - 14.8%
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%
Comment: N/A

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- Canning Basin Valentine 1

Spud Date: 12:30hrs 12[th] August 2007

General Well Data

DATE : 4/09/2007

Planned TD : 3407.5mMD / 3300m TVSS Drill Floor Elevation : 18.1m amsl

Summary @06:00hrs WST

Current depth 2589m. Observing Well. Wiper trip / RIH

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Canning Basin Valentine-01
(Exploration Well from Spud) Predicted Progress
Actual Progress
Bli
0 13 3/8"@112mMD
200
400
600
9 5/8"
@808mMD
800
1000 20/08/07
1200
Change drill bit at 1511m
1400
22/08/07
1600
24/08/07
1800
26/08/07
2000
Change drill bit at 2306m
28/08/07
2200
30/08/07 Change drill bit at 2589m
2400
2600 01/09/07
04/09/07
2800
3000 Valentine-1
Primary Target
"Virgin Hills Formation"
3200
Expected TD 3402.5mMD 3300mTVSS
Log & Evaluate
3400
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Days
Depth (Measured below Rotary Table in metres)
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