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EMERALD RESOURCES NL — Capital/Financing Update 2007
Aug 16, 2007
64849_rns_2007-08-16_a7bfe52f-b2d3-4bea-9039-479465b5f366.pdf
Capital/Financing Update
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Level 2, 16 Altona Street West Perth WA 6005 Ph: 08 9482 0500 Fx: 08 9482 0505 Email: [email protected] www.emeraldoilandgas.com
17 August 2007
Centralised Company Announcements Platform Australian Stock Exchange 10[th] floor, 20 Bond Street Sydney NSW 2000
PALITO BLANCO PROJECT
Emerald Oil & Gas NL (“Emerald”) is pleased to announce that it has signed an agreement to acquire a 15% Working Interest in the Palito Blanco Prospect in Duval and Jim Wells Counties, Texas, from Oso Exploration Company of San Antonio, Texas.
Emerald will pay 20% of the land and dry hole costs to casing point and 15% of the completion costs in the Jaimie Garcia Gas Unit #2 Well to earn its 15% Working interest in the leased acreage and Area of Mutual Interest (AMI). It is expected that the 8,250 foot well to be drilled by contractor Pioneer Drilling Co (PDC – AMEX) will spud early next week, weather permitting.
Palito Blanco Prospect Duvall and Jim Wells Counties, Texas
Introduction
Palito Blanco Prospect is located in the South Texas Basin within Duval and Jim Wells Counties some 120 miles south of San Antonio. It is located within the prolific Yegua multiple-sand, gas-producing fairway within Braman, Four Seasons and Palito Blanco fault – separated fields, which to date have produced 45+ BCF gas and 1.0+ million barrels of condensate. Some 400 acres are currently under lease within a larger AMI. The operator Oso Exploration is proposing to drill an 8,250 foot well to test the Yegua formation multiple-sand package the lowest of which is the Y-21 sand.
Prospect Geology
Palito Blanco prospect is located within a faulted structural anticline and is surrounded by Yegua sand gas production named Braman, Four Seasons and Palito Blanco fields. A key well, the Jaimie Garcia #1 was re-entered by Oso Exploration two years ago after being drilled by Samedan Exploration in the 1970’s. Samedan ran no tests and abandoned the well. Oso successfully washed down the old hole, ran a modern suite of logs and completed the well as a gas producer.
Several Yegua sands were gas-bearing including the Y-21, Y-14 and others. The well produced 0.33 BCF gas from the Y-14 sand until recently when the casing collapsed. Gas was also present in the Y-21 sand but was not produced due the
high water cuts. It is now proposed to drill the Jaimie Garcia #2 well located structurally updip from the Jaimie Garcia #1 well to tap all gas-bearing sands within the Yegua formation.
Resource Potential
Structurally there appears to be room for 3-4 wells around the original Jamie Garcia #1 well. Total potential resources are approximately 10 BCF gas and 100,000+ barrels of condensate. Further development potential might emerge from the larger AMI (area of mutual interest) with Oso Exploration.
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Figure 1: Shows location of Palito Blanco project in the prolific Yegua trend, in close proximity to the Company’s NW Alice project.
For more information please contact:
Emerald Oil & Gas NL Tel: +618 9482 0510
JOHN HANNAFORD Executive Director – Finance [email protected]
BOB BERVEN Executive Director – Technical [email protected]
About Emerald Oil & Gas NL
Emerald Oil & Gas NL (ASX: EMR; EMRO) was listed on the ASX in June 2006, raising $4 million. Emerald is an oil and gas exploration and production company with project interests in North Dakota and Texas in the USA and in the Canning Basin of Western Australia. Emerald’s focus is on conventional reservoir targets for oil and gas prospects and its primary objective is to achieve near term production and cashflow to build shareholder value and provide funds to fuel further growth. Emerald’s strategy is to take modest but meaningful positions in low risk exploration projects that can be swiftly brought into production.
Information in this announcement pertaining to exploration potential was compiled by Robert Berven, Emerald Oil & Gas NL’s Technical Director who is a Member of the Australasian Institute of Mining and Metallurgy and the American Association of Petroleum Geologists CPG # 2498.
Statements regarding Emerald’s plans with respect to its petroleum properties are forward-looking statements. There can be no assurance that Emerald’s plans for development of its petroleum properties will proceed as currently expected. There can be no assurance that Emerald will be able to confirm the presence of additional petroleum deposits, that any discovery will prove to be economic or that an oil or gas field will successfully be developed on any of Emerald’s petroleum properties.