EMERALD RESOURCES NL — Capital/Financing Update 2011

Feb 16, 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

17 February, 2011

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

Emerald Signs MOU to acquire strategic US Rocky Mountain Unconventional Oil and Gas Assets

Highlights:

• MOU to acquire 45% working interest in approximately 60,000 acres of highly prospective Niobrara Shale acreage in Colorado and Wyoming from New Frontier Energy Inc for $US10 million cash and the equivalent of $US5 million in EMR shares

• Plan to work closely with Entek Energy Ltd (Operator and holder of other 55% WI) to realise the value potential of the assets

Emerald Oil and Gas (ASX: EMR) is pleased to announce it has entered into a binding Memorandum of Understanding (MOU) with US listed public oil and gas company New Frontier Energy Inc (US OTCBB:NFEI) to acquire 100% of New Frontier’s interest in its highly prospective Green River Basin JV. The Green River Basin JV holds over 60,000 acres of highly prospective Niobrara Shale formation of which New Frontier holds a 45% working interest. Entek Energy (ASX: ETE) operates the Joint Venture and is currently working to complete its farm-in obligations to New Frontier to earn a 55% working interest in the Green River Basin JV.

Under the terms of the MOU, Emerald will acquire all of NFEI's Green River Basin assets and liabilities pertaining to the Participation Agreement between NFEI and ETE which governs these assets. This includes:

• Leasehold interests in over 60,000 acres of leases located in north western Colorado and south western Wyoming

• Associated equipment and property located on these leases used for production

• Partnership interests in a company which owns and operates an 18 mile, 6" gas export pipeline with associated access rights connected to the greater Rocky Mountain natural gas pipeline grid

• Rights and claims under the Participation Agreement with ETE

• Legal claims in ongoing litigation against certain parties to recover monies from previous joint venture dealings

In consideration for the above, EMR will pay NFEI $US10,000,000 in cash and the equivalent of $US5,000,000 in EMR ordinary shares.

The transaction is conditional on:

• EMR completing its due diligence and receiving necessary shareholder approvals within 45 days of MOU execution

• EMR carrying out the capital raising to satisfy the cash component of the consideration within 50 days of MOU execution on terms acceptable to EMR

• All representations made by NFEI to EMR be true and correct

• NFE holding or being contractually entitled to title over at least 15,000 net working interest acres

• ETE not exercising its Preferential Rights under the Participation Agreement

• The transaction closing no later than 30 April, 2011.

An additional $5,000,000 working capital will be raised in addition to the $US10,000,000 to be raised for the consideration.

After the transaction is closed EMR plans to appoint an individual experienced in US shale plays to join EMR's Board of Directors.

Alignment with Energy Investment and Capital Markets Leadership:

Emerald has formed an alliance with Pelagic Capital Investments (“Pelagic”) and Ochre Management Pty Ltd (“Ochre”), whereby Pelagic and Ochre will work with Emerald to build a substantial unconventional resource portfolio in the US Rocky Mountains and the North American West. Pelagic and Ochre bring EMR access to significant capital and relationships required to deliver value from unconventional oil and gas plays in the US. Pelagic is a resource focused private investment partnership and Ochre is a merchant bank. In consideration for facilitating this transaction, Pelagic and Ochre, together, will receive a total of 15 million EMR shares and 50 million options exercisable at $0.05 for a period of 3 years from date of issue.

Technical Attributes of the Acquisition:

• The Green River Basin is one of the largest self sourcing, continuous oil and gas resource basins in North America, containing all the elements required for potential high rate oil and gas production with the application of recently developed specialised shale drilling and completion techniques

• Competition for acreage is rapidly increasing in the Green River Basin as evidenced by recent deals driven by large North American independent E&Ps and multi-national oil companies

• Niobrara shale oil and gas prospectivity is high, but requires further technical

  • investigation to unlock its full potential

• Multiple operators are currently evaluating future Niobrara shale oil development drilling in close proximity to the Green River Basin JV

EMR intends to work closely with ETE to develop plans to prove the resource potential, maximise the value of the asset and to consolidate the competitive position of the Green River Basin JV by acquiring additional acreage in the area based on insights and knowledge gained from its recently acquired well data.

The Green River Basin promises to be the next area of the prolific Niobrara oil shale to be developed in the US Rocky Mountains and Emerald is pleased to acquire an interest in assets with such high resource development potential. Through the Green River Basin JV, Emerald will hold one of the largest contiguous acreage positions in the Green River Basin Niobrara play.

Further details regarding the above will be released as appropriate and a Notice of Meeting will be forwarded as soon as it has been prepared and cleared for despatch.

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), 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 nonconventional reservoir targets for oil and gas prospects. Its near term objective is to achieve production and cashflow to achieve an operating cash surplus from current assets, while seeking high impact opportunities in the energy sector.

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.