EMERALD RESOURCES NL — Capital/Financing Update 2011

Dec 15, 2011

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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

15 December, 2011

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

Emerald Capital Raising and Company Update

Highlights:

• Currently finalising a share placement to raise $3.5m of up to a potential $5m capital raising at a share price of $0.03, predominantly from US investors

• Production start-up operations underway on 3 recently drilled Green River Basin Niobrara oil wells located in Colorado and Wyoming, USA - initial production results imminent

• Competitor drilling activity around GRB acreage in Colorado likely to drive value in 2012

• Significant progress on US shale oil strategy

Equity Placement

Emerald wishes to advise that it is in the process of finalising a placement to sophisticated and institutional investors for a total of $3.5m under the Company's 15% capacity. Subject to Shareholder approval and best efforts, up to an additional $1.5m might be raised at a share price of at least $0.03 for a potential total capital raising of up to $5m.

These funds will be used to appraise, develop and deliver production from Emerald's GRBJV assets. The majority of the equity was placed with US investors at a share price of $0.03, which is significantly above recent market share prices, confirming the higher valuation of shale oil assets such as the GRBJV assets by US investors.

Niobrara Shale Oil Update

GRBJV

Emerald holds a 45% interest in the Green River Basin Joint Venture (GRBJV) in Colorado and Wyoming, USA, which includes approximately 86,000 gross acres (approximately 35,000 Net EMR acres) of undeveloped Niobrara shale oil leases, a partially developed coal bed methane (CBM) field and related production infrastructure. Entek Energy (ASX: ETE) operates the GRBJV and holds the remaining 55% working interest.

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A three well appraisal drilling program commenced in July was successfully concluded with valuable technical information gathered for oil development drilling in 2012. As previously reported, the wells intersected multiple, intensely fractured oil bearing zones above, below and within four prospective oil pay zones or "benches" in the Niobrara shale. Over 20 individual oil bearing intervals were completed in each well and stimulated with either a propped hydraulic fracture stimulation treatment or an un-propped mini-frac treatment to improve communication between the formation and the wellbore.

Pumps have now been installed on all 3 wells and start-up operations are underway to bring the wells into production with all completed zones in each well producing comingled, as planned. Further information will be provided in the next few days or weeks, as production information becomes available.

As part of the original acquisition of the GRBJV interests in May, 2011, the Company assumed legal claims in ongoing litigation against certain parties to recover monies from previous joint venture dealings. A counter claim in this litigation includes an unproved, potential claim over small portion of EMR's Net acreage. The Company is

confident the legal dispute will be settled in a manner positive to the Company's interests within the next few months. A surface rights owner hostile to oil development in the Focus Ranch Unit Area has also asserted a challenge to the Focus Ranch Unit, which if successful, would cause a number of the Company's mineral leases in the Unit area to terminate. The Company believes it very unlikely that the challenge will succeed.

EMR and ETE will now conduct a detailed technical review of the results of the 2011 appraisal program before agreeing a 2012 GRBJV Work Program and Budget in Q1 2012. The 2012 work program is expected to involve drilling a number of new wells (including both horizontal oil producers and vertical appraisal wells), seismic acquisition and field production infrastructure expansion to accommodate increasing oil production anticipated from development drilling.

GRB Competitor activity

The GRB Niobrara is an emerging shale oil play. Shale asset valuations are determined by acreage values ($/acre), which rise dramatically as the play is proved with drilling results.

In addition to the GRBJV's 3 appraisal wells, several large US companies are drilling in the area around the Company's acreage. Information on results is scarce, as a competitive environment exists and companies generally disclose as little as possible until required to do so by regulation. However, three companies active in the Craig Dome area located approximately 30 miles to the South of the GRBJV's acreage, Gulfport, Quicksilver and Shell, have publically disclosed some information. The geology in this area is similar to the GRBJV area, with multiple stacked oil zones present in a thick the Niobrara shale section.

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In a program very similar to the GRBJV, Gulfport drilled 3 vertical appraisal wells, has installed pumps and is currently commencing production operations. No information on oil production rates is yet available.

Quicksilver drilled 6 vertical wells and 1 horizontal well in 2011 and, like the GRBJV, experimented with various frac designs. To date they have only publically announced one flow rate of 70 bopd from a single fracced interval in one of their wells. This is a positive result, as multiple stacked oil zones exist in the Niobrara.

Shell commenced a 7 to 12 well drilling program using 2 rigs, which they intend to complete by the end of 2011, before shutting down operations for the winter. A number of wells including at least 2 horizontal wells have been drilled to date, with initial production expected in December and January after the wells are completed. In addition to their new wells, Shell upgraded two existing Niobrara wells which are currently producing between 80 and 100 bopd.

In the North Park Basin, lying approximately 50 miles to the east of GRBJV's acreage, EOG has drilled 7 horizontal wells and reports average 30 day production rates of 294 bopd.

The above drilling activity is evidence that experienced US shale companies are committing substantial expenditure to proving the potential of the GRB Niobrara shale play around the Company's acreage. The results to date, based on limited production information available, is very encouraging. Based on the above, Emerald believes the GRB Niobrara play is likely to be "proved" by well results within the next 12 months.

It is also worth noting that several vertical Niobrara wells in the GRB have produced at rates of several hundred bopd. This includes a vertical, unstimulated well in the Sierra Madre field some 8 miles to the NW of Emerald's appraisal wells which initially produced at 550 bopd and has produced over 350 thousand bbl to date. Similarly, another vertical unstimulated well in the Buck Peak field 30 miles to the south initially produced at 480 bopd and has recovered over 1.3 million bbl.

Oil production rates from vertical Niobrara producers in the GRB are significantly higher than typical oil production rates from vertical wells in successful shale plays such as Bakken and DJ Basin Niobrara shale, prior to the application of the hydraulically fractured horizontal wells which "proved" the potential of these plays.

US Shale strategy

On October 6, 2011, the Company announced its US Shale oil strategy to use its GRBJV assets as the foundation to build a substantial US shale oil business.

Emerald is now in the process of transforming its wholly owned subsidiary, Emerald Oil & Gas USA Holdings Inc (EOGUSA) into an active US shale oil player with the ability to effectively manage the Company's interests in the GRBJV and grow by selectively acquiring additional US shale oil interests. A separate Board of Directors comprised of individuals experienced and well connected in US capital markets and the US oil and gas industry, was appointed as part of this plan.

A key part of the Company's US Shale Strategy is to increase the scale of its US shale business by actively identifying and assessing substantial US shale acquisition opportunities in the Rocky Mountain region. Several such opportunities are currently under consideration. Funding for these acquisitions will be sourced from US investors and the Company may seek to securitise some or all of its US shale assets.

This may involve transferring the Company's US shale assets into a US vehicle not directly controlled by EMR.

Directors believe this could significantly enhance flexibility to fund its US shale projects and optimally position EMR for dealings in most dynamic sector in North American Oil and gas industry.

The current placement is the second time the Company has raised capital from US investors at share prices well in excess of the Company's ASX listed share price. This and $/acre valuations of analog US companies with similar assets clearly indicate US valuations for shale oil assets are significantly higher in US and that the full value of EMR's assets is not reflected in EMR's current share price.

If and when the US shale strategy is fully implemented, negotiations regarding equity based fees for two of the directors as previously announced will be concluded.

As another means of furthering the Company's US Shale Strategy, the Company is engaged in non-binding preliminary discussions with at least one other ASX listed company with complimentary US oil and gas assets, which may potentially lead to combining certain assets or merging of the two companies.

Directors believe significant value could be captured through potential company dealings with ASX companies or specific shale asset dealings complimentary to the Company's US shale strategy.

Additional information will be provided as appropriate.

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, EMRO) was listed on the ASX in June 2006. Emerald Oil & Gas NL is a petroleum exploration and production company based in Perth, Australia. The Company holds interests in exploration and production operations in the USA (Colorado, Wyoming, Kentucky and Texas) and offshore Western Australia. Emerald's main focus is its large Green River Basin acreage holding over the Niobrara Continuous Shale Oil accumulation in Colorado and Wyoming. Emerald plans to use its position in the Green River Basin as a foundation on which to build a company focused on unconventional resource plays in the Rocky Mountain region.

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.

Competent Persons Statement

Information in this report that relates to Hydrocarbon Reserves and or Resources is based on information compiled by Mr Mike Krzus, Chief Executive Officer and Managing Director of Emerald Oil and Gas NL, who has consented to the inclusion of that information in the form and context in which it appears. Mr Krzus has 29 years experience in petroleum engineering and the petroleum industry, both in Australia and internationally. He holds a Bachelor of Science Petroleum Engineering from Tulsa University and a Diploma of Oil and Gas Technology from the British Columbia Institute of Technology.