EMERALD RESOURCES NL — Capital/Financing Update 2010

Aug 1, 2010

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Suite 2, 12 Parliament Place West Perth WA 6005 Ph: +618 9482 0510 Fax: +618 9482 0505 Email: info@emeraldoilandgas.com www.emeraldoilandgas.com

2 August, 2010

Centralised Company Announcements Platform Australian Stock Exchange 10[th] floor, 20 Bond Street Sydney NSW 2000

MAJOR FUNDRAISING TO FUND NW ALICE DRILLING PROGRAM

Highlights:

• Placement plus underwritten pro rata entitlement issue to raise approximately $2,750,000 (before costs);

• NW Alice well to be drilled in September as follow up to RJ Hunter#1 discovery well drilled in 2007;

• Emerald holds 35% of the large 3D defined gas/condensate-bearing structure with possible reserves likely to exceed 100Bcf gas and 2.5 million barrels oil.

Emerald is pleased to announce a major fund raising to provide funds to drill a follow up well on the NW Alice project in Jim Wells County, Texas, USA, plus providing funds to search for new projects and for working capital.

Emerald has signed an underwriting agreement with RM Capital Pty Ltd (“RM Capital”), and a management agreement with Ochre Management Pty Ltd (“Ochre”) whereby Ochre will manage and RM Capital will underwrite the following:

• Placement of 10 million shares at 2.0 cents per share, plus 5 million free attaching options (each exercisable at 5 cents on or before 31 August 2012), to raise $200,000 before costs (“Placement”);

• Pro rata entitlement offer to acquire up to 127,500,000 ordinary fully paid shares at a price of 2 cents per Share together with one free attaching option (each exercisable at 5 cents on or before 31 August 2012) in respect of each 2 Shares subscribed to raise up to $2,550,000 before costs (“Rights Issue”).

The underwriting agreement provides for a Placement Facility whereby, in the event that the shortfall from the Rights Issue is less than 40 million shares, RM Capital have the right to further subscription of shares up to 40 million shares on the same terms and conditions as the Placement, such that RM Capital has a minimum overall subscription of 40 million shares and 20 million options. Under the management agreement, 10 million options will be issued to Ochre on the same terms as the free attaching options under the placement.

Emerald is pleased to introduce Ochre and RM Capital to the Company. The underwriting commitment confirms the Company’s belief in the prospectivity of the NW Alice project and its potential as a significant hydrocarbon resource development.

A Prospectus for the issues will be lodged with ASX and ASIC today, and an indicative timetable for the capital raisings will be announced shortly.

For more information please contact:

Emerald Oil & Gas NL Tel: +618 9482 0510

MIKE KRZUS Managing Director mkrzus@emeraldoilandgas.com

About Emerald Oil & Gas NL

Emerald Oil & Gas NL (ASX: EMR), listed on the ASX in June 2006, is an oil and gas exploration and production company with project interests in Kentucky and Texas in the USA and in the Canning Basin of Western Australia. Emerald’s focus is on both conventional and non-conventional reservoir targets for oil and gas prospects. Its primary objective is to achieve near term production and cashflow to build shareholder value and provide funds to fuel further growth.

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.