EMERALD RESOURCES NL — Interim / Quarterly Report 2007

Oct 30, 2007

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Level 2, 16 Altona Street West Perth WA 6005 Ph: 08 9482 0500 Fx: 08 9482 0505 Email: info@emeraldoilandgas.com www.emeraldoilandgas.com

31 October, 2007

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

QUARTERLY ACTIVITIES AND CASHFLOW REPORT - SEPTEMBER 30, 2007

Please find attached the Quarterly Activities Report and Appendix 5B Quarterly Cashflow Report for the quarter ended September 30, 2007.

Yours sincerely,

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JOHN HANNAFORD

Director – Finance

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ASX Release

31 October 2007

EMERALD OIL & GAS NL Level 2, 16 Altona Street West Perth WA 6005 Tel: +61 8 9482 0510 Fax:+61 8 9482 0505

Contact:

BOB BERVEN Technical Director bberven@emeraldoilandgas.com

JOHN HANNAFORD Finance Director

jhannaford@emeraldoilandgas.com

MORGAN BARRON Company Secretary mbarron@emeraldoilandgas.com

E-MAIL: info@emeraldoilandgas.com

WEBSITE: www.emeraldoilandgas.com

Directors/Officers:

Jeremy Shervington (Chairman) John Hannaford Bob Berven

Issued Capital: 62,369,261 Shares (EMR) 35,605,739 Listed options (EMRO) 6,486,639 Unlisted options

Market Capitalisation: Undiluted $11.8m (19 cents)

Cash on hand 30.9.07 $2.8m

QUARTERLY ACTIVITIES REPORT FOR THREE MONTHS ENDED 30 SEPTEMBER 2007

Highlights

USA

• Gas discovery at Palito Blanco Prospect, Jim Wells County, Texas. The Jaime Garcia Gas Unit #2 well encountered 80+ feet of gas-bearing sands at the Palito Blanco prospect, currently being completed, to be brought into production in November 2007.

• The Kathleen Marie #2 well at Pandura Prospect, Webb County, Texas was plugged after encountering several thin gas-bearing zones deemed to be non commercial. On going studies of the well data might result in a re-entry and completion in early 2008.

Canning Basin WA

• Valentine – 1 well reached a total depth of 3,430 meters on September 29, 2007. The well was plugged and abandoned after encountering encouraging gas shows in Anderson formation sandstones and Nullara formation carbonates.

• Stokes Bay – 1 drilled to a total depth of 2,777 meters to the Nullara formation carbonates. The well has run 7 inch casing to a depth of 2,589 meters and is proceeding to test the Nullara and Anderson formations. The Nullara will be an open-hole drill stem test below casing, while the Anderson will be tested through casing. Preparing to drill stem test the Nullara carbonate formation.

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2007

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Overview

The Board of Emerald Oil & Gas NL is pleased to present its quarterly activities report for the quarter ended 30 September 2007.

During the quarter the Company continued its active exploration drilling program in the USA that commenced in March 2007. The Company participated in 2 wells in USA of which the Jaime Garcia Gas Unit #2 well discovered 80+ feet of gas bearing sands from several Yegua sands. This well is currently being completed and tested with production anticipated in November 2007. The Marek 1 well at the Hope prospect was spudded on 30 October 2007, where Emerald has a 6.87% working interest.

In the Canning Basin, Western Australia the Company completed its farm in to a 12.75% interest in the EP104/R1 JV by participating in the Valentine 1 exploration well. The follow up Stokes Bay 1 well was drilled subsequent to the end of the quarter and is currently being tested.

Emerald management is pleased with the results of the drilling programs where the multi project strategy has resulted in the Company having at least two discoveries both to be developed in the next 3-6 months (NW Alice and Palito Blanco).

USA Projects

NW Alice Discovery Figure 1: Regional trend map showing Palito Blanco and NW Alice Palito Blanco projects in close proximity Discovery on Yegua trend in Duval and Jim Wells Counties Texas, surrounded by producing fields.

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Palito Blanco Project, Duval and Jim Wells Counties, Texas (Emerald earning 15% Working Interest; Operator: Oso Exploration)

The 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. Approximately 400 acres are currently under lease within a larger AMI. The Jamie Garcia Gas Unit #2 well was drilled to a total depth of 8,250 feet and resulted in a gas discovery from sands within the Yegua Formation. It successfully ran 4 ½ inch production casing to 8,240 feet. Wireline logs indicate that gas-bearing sands have been identified within the Y-20 sand (5 feet), the Y-19 sand (5 feet), the Y-18 sand (3 feet), the Y-15 sand (24 feet) and the Y- 14 sand (4 feet). The cumulative total of possible gas- bearing sands (including Y- 21) is approaching 50 feet.

In addition, the upper part of this well between 5,000 & 6,300 feet has gasbearing sands within the Frio, the Jackson and the Hockley formations. A total of some 30+ feet of gas-bearing zones have been identified from 5 sands. A separate shallow development well might be drilled at a later date to establish production from these upper intervals.

Structurally there appears to be room for 3-4 development 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.

Project Status: The operator has sourced a workover rig and has begun to complete & test the well. Production flowlines are currently being laid and the well will be put on production by mid November.

North West Alice, Jim Wells County, Texas (Emerald 10% Working Interest; Operator: Noble Energy Inc.)

The NW Alice prospect covers over 2,500 acres in Jim Wells County. Operator Noble Energy Inc. well spudded the RJ Hunter #1 well on March 11, 2007 and reached its prognosed target depth of 8,500 feet on March 28. The well discovered two main Yegua hydrocarbon bearing zones and smaller associated intervals for a total net interval of approximately 50 feet of gas and condensate-bearing sands. The primary objective Yegua-15 sand at around 7,700 feet and the secondary objective Yegua-21 sand at approximately 8,220 feet both encountered gas.

After logging, production casing was run and the secondary objective, the lower Yegua sand at 8,220 feet, was perforated. A down-hole technical problem arose in that the casing collapsed when perforated preventing flow testing of this lower sand interval. Partners in the well agreed to plug off the lower zone, move uphole and perforate the upper zone, which produced gas in the previous offset well to the south drilled by Delta-Gulf in 1954. (see further at Figure 2).

EMERALD OIL & GAS NL - SEPTEMBER QUARTERLY REPORT 2007

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The upper Yegua-15 zone from 7,696 to 7,710 feet was then perforated and fracture treated and flow testing commenced producing modest gas flow rates and some fresh water. The Operator carried out a tracer survey but was unable to determine the source of fresh water which entered the well bore inhibiting gas flow rates.

The Operator Noble Energy suspended the well in April and is currently conducting an extensive 3D seismic survey over the large anticlinal structure. Following processing and interpretation of the results, Emerald anticipates drilling a second well in Q1 2008 to confirm the presence of gas in the Yegua 15 and Yegua 21 sands identified in the RJ Hunter #1 well.

(It is possible that the Operator could sidetrack and re-complete the Yegua-21 zone in RJ Hunter #1 well at a later date). Emerald is confident that the gas discoveries can be developed into producing wells over this large area in the coming year.

Project Status: Currently conducting 3D seismic survey as part of a larger regional survey being carried out by the Operator. Second well to be drilled following processing and interpretation anticipated to spud in Q1 2008.

Hope Prospect, Lavaca County, Texas (Emerald earning 6.87% Working Interest; Operator: Main Energy)

Emerald announced on 30 April, 2007 that it had entered into an agreement to participate in a 6.87% interest in the Hope Prospect. The operator Main Energy is an experienced South Texas explorer and producer.

The Hope Prospect is located in the South Texas Basin in Lavaca County, Texas, 80 miles east southeast of San Antonio. It is on trend with prolific Upper and Lower Wilcox Sand production. Approximately 1,300 acres are currently under lease and the proposed total depth is a 10,500 feet well which is a “non-pipe” test.

Additional lateral seal on the northeast side is gained by shale fill in the Yoakum channel. The primary reservoirs are the Upper and Lower Wilcox deltaic sands at 9,900–10,000 feet and the Lower Wilcox Roeder sands at 10,000-10,500 feet.

Reserve Potential

Seismic data shows a 50-foot structural gain to a previous well, yielding potentially 65 feet of hydrocarbon column. Reserve potential for the Hammon sand is 25 BCF. Potential resources for the Roeder sand at Hope Prospect exceed 40 BCF. Total resources for Roeder and Hammon sand is 65 BCF of gas.

Prospect Geology

The Hope Prospect is defined by 3-D seismic and subsurface well control. It is a large anticlinal structure downthrown to two en echelon growth faults.

Project status: Operator Main Energy spudded the first well Marek-1 on October 30, 2007. Drilling is anticipated to take 3+ weeks to reach target depth.

EMERALD OIL & GAS NL - SEPTEMBER QUARTERLY REPORT 2007

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Pandura Project, Webb County, Texas

(Emerald earning 15% Working Interest; Operator: Daytona Energy Corporation)

The Company announced it had reached agreement with Daytona Energy Corporation (“Daytona”) in relation to Emerald’s participation in the Pandura project located in Webb County Texas, USA. Under the agreed terms Emerald is to pay 21.1875% of the dry hole cost and 15.75% of the completion costs of the Kathleen Marie #2 well to earn a 15.0% working interest post completion in the Pandura leases. This is a marked improvement on the previous terms of paying 22.5% of the drilling costs including through completion.

This revised agreement was possible after Daytona had secured new leases covering the project area. The lease renewal process had been delayed by the absence of one of the part-owners of the main lease, forcing the Operator to pursue a court process to secure the lease for renewal. Under the agreement with Daytona, Emerald is not liable for any costs of the lease renewals or associated costs, only its pro rata share of drilling costs.

After a review of the wireline logs and mud logs while drilling it was decided to plug and abandon this well. Wireline logs confirmed the presence of several thin (12 feet) gas bearing sands within the Lobo primary and secondary objectives. However, these thin sands do not appear to be sufficient to support an economic well, when compared to surrounding producing wells in the area.

Subsequent studies of producing wells in the general vicinity of the Kathleen Marie #2 well indicate that it might have potential for commercial production. Further studies could lead to this well being re-entered and completed.

Emerald has earned is 15% interest in the 440 acre lease which has possible potential for additional wells.

Project Status: All data is currently being reviewed and revised in light of the Kathleen Marie #2 drilling result.

The Kathleen Marie #2 well was drilled to a total depth of 8,500 feet and was logged in September 2007.

Steamboat Prospect, Jim Hogg County, Texas. (Emerald 25% Working Interest)

The Steamboat prospect has Wilcox sand targets with potential reserves of 30-100 BCF gas. A four-party consortium (Emerald 25%) has secured lease options covering approximately 1,800 – 2,000 acres over this prospect. The consortium is farming out a 3-D seismic survey and one well possibly in Q2, 2008.

Project Status: The project is being marketed to potential investors to fund the 3D seismic survey and one well with the four party consortium seeking a substantial carried working interest in the first well.

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Glamour Girl Project, Duval County, Texas. (Emerald 15% Working Interest; Operator: Anderson Oil Ltd)

Project Status: The partners in the Glamour Girl prospect are yet to determine a future work program for

the remainder of the area under lease. A 3-D seismic survey on reentering the old Arco Taylor well and attempting a completion are both under consideration.

Greenbush Project, Ward & Renville Counties, North Dakota (Emerald 15% Working Interest; Operator: Golden Eye Resources)

Project Status: Emerald is now awaiting a recommendation from the Operator Golden Eye Resources as to

what type of target will be drilled next on this project.

New Projects – USA

The Company continues to review and assess several new oil and gas exploration project opportunities in the USA which have been sourced through management’s extensive industry network.

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AUSTRALIAN PROJECTS

Canning Basin, Western Australia

Emerald has been attracted to the Canning Basin because it is under-explored and offers large reserve potential, high impact plays in a stable environment with expanding markets and increasing prices. ARC Energy’s move into the Canning Basin during the year has put a much needed focus on the exploration potential with several wells and seismic survey activity

planned in the current and coming years.

Emerald’s existing acreage position in the Basin in EP104/R1 and EPA 4/05-6 covers a long section of the Pinnacle fault, conduit to most of the Lennard Shelf hydrocarbon discoveries in the Canning Basin of Western Australia.

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Valentine 1 and
Stokes Bay 1
well locations
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Figure 2: Canning Basin showing Emerald’s EP104 / R1 (yellow, Emerald 12.75%) and EPA 4/05-6 (green, Emerald 100%) interests, and mapped prospects and leads. The main feature on both leases is the Pinnacle Fault, the Conduit for much of the previous hydrocarbon production on the Lennard Shelf portion of the Canning Basin.

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EP104/R1, Canning Basin WA (Emerald 12.75% Working Interest; Operator: Arc Energy Ltd)

Emerald reached agreement with ARC Energy Limited (“ARC”) whereby Emerald would assign to ARC a part of its earn-in interest in the EP104/R1 licences in the Canning Basin. Under the terms ARC agreed to pay 12% of the agreed earn-in expenditure for a 6% working interest in the licences.

Emerald retained the right to earn a 12.75% interest in the EP104/R1 licences for payment of 13% of the costs of the first well. This agreement significantly reduced Emerald’s costs in the two wells (Valentine and Stokes Bay), whilst preserving a meaningful working interest.

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Deviated Stokes Bay
#1 well tested the
Anderson formation,
then deepened to test
the Nullara formation
Valentine #1 vertical
well tested the 1 TCF
potential in the Virgin
Hills formation
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Figure 3: Seismic section showing both Valentine 1 and Stokes Bay 1 wells – Valentine the deeper vertical (practically) well, and Stokes Bay, a deviated shallower well. Both were drilled form the same well bore, saving time and costs.

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Valentine 1 well

Valentine 1 is located approximately 20 kilometres north of the township of Derby in northwest Western Australia’s Kimberley region. The primary reservoir objective was the Late Devonian-aged Virgin Hills Formation. The Valentine 1 well was drilled to the top of the main objective section at approximately 3,220 metres measured depth however the sandstones were tight with no indications of hydrocarbons.

Project Status: ARC Energy drilled Valentine #1 vertical well to a total depth of 3,430 metres. The well intercepted very strong gas shows and indications of porosity in the Anderson and Laurel Formations down-dip from the target interval in the Stokes Bay #1 well. This is an extremely positive indication for Stokes Bay #1 which is targeted to intersect these objectives within closure, some 90 meters up-dip from the Valentine #1 intersection.

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Figure 4: The Century 18 rig on location at the EP104/R1 project in the Canning Basin of Western Australia during drilling of the Valentine 1 and Stokes Bay 1 wells.

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Stokes Bay 1 well

The Stokes Bay 1 well was drilled as a sidetrack from the Valentine 1 wellbore after the completion of drilling operations at Valentine 1. Stokes Bay 1 is a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment 1 well drilled in 1992. It has been drilled as a deviated well with a recently revised total depth of approximately 2,800 metres.

Point Torment 1 well originally flowed gas at a rate of up to 4.3 million cubic feet of gas per day from the Carboniferous-aged Anderson Formation sandstones. Subsequent tests of these sands produced ambiguous information on potential volumes and reservoir quality. The Stokes Bay 1 well is designed to provide a definitive test of the reservoir quality and extent of the oil and/or gas accumulation. Stokes Bay-1 is mapped to be updip approximately 90-120 metres and along strike 5.5 kilometres from the Point Torment-1 well.

The Valentine 1 well intersected strong gas shows and indications of porosity in the Lower Anderson Formation downdip from the target interval in the Stokes Bay 1 well. This is a very positive indication for Stokes Bay -1 which is targeted to intersect these objectives some 90-120 metres updip from the Valentine 1 intersection.

Stokes Bay-1 is primarily a gas prospect however there is also potential for oil entrapment at this location. Anderson Formation sands encountered indications of liquid hydrocarbons in both the Point Torment-1 and the Valentine-1 wells. The revised total depth was to test the gas potential of the Nullara reefal carbonates following gas shows in Valentine-1 well.

Project Status:

At the time of writing the Stokes Bay 1 well has run 7 inch casing and has been drilled to a final total depth of 2,777 metres. Preparing to drill stem test the Nullara carbonate formation.

EPA 4/05-6 Canning Basin, WA (Emerald 100% Working Interest and operator)

Emerald’s application EPA 4/05-6 lies immediately to the west of the EP104 permits and covers the west extension of the Pinnacle Fault, the location of much of the previous production in the Canning Basin. This permit application is currently proceeding through the Native Title process. The permit area contains several structural “look-alikes” to the Stokes Bay Prospect (in EP-104) along the Pinnacle Fault Zone. A discovery at Stokes Bay/Valentine would add considerably to the exploration potential of this permit which will be held 100% by Emerald (subject to Native Title).

Emerald’s mapping of leads and prospects on EPA 4/05-6 both along and near the Pinnacle Fault has identified several large structures that may host significant accumulations of hydrocarbons, some several times larger than the Stokes Bay prospect, as shown in Figure 2 below.

Project status: Currently in Native Title negotiations.

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DRILLING PROGRAM

Emerald will continue its active exploration program in the coming quarter with development of the Palito Blanco discovery in November. In addition the Company will participate in at least one well exploration well in the USA and testing the Stokes Bay1- well in the Canning Basin.

Project	Emerald	Emerald attributable	Timing
	Interest	potential resource
		(unrisked)
* Hope – (Texas USA) - first well	6.87%	3.3 BCF	November 07
* NW Alice (Texas USA) – seismic acquisition, further drilling	10.0%	7 BCF	Q1 08
* Steamboat (Texas USA) – seismic acquisition then drilling	25% (pre farm out)	18.75 BCF	Q1 08
* Pailto Blanco (Texas USA)	15.0%	~1.125BCF	Q1 08

Corporate

During the quarter the Company completed the June capital raising with the remaining 12.75 m shares and 6.375 m options issued and allotted on 2 July 2007 following shareholder approval at the EGM held on that day. Funds for this raising were received in June 2007. The shares and options were issued to sophisticated investors, existing shareholders and other clients of Capital Investment Partners Pty Ltd.

At 30 September 2007 the consolidated entity had $2.797 million cash on hand.

The Company made the following announcements during the quarter and up to the date of this quarterly report:

31/10/2007	Hope project update
26/10/2007	Notice of General Meeting/Proxy Form
26/10/2007	Annual Report to shareholders
26/10/2007	PALITO BLANCO GAS DISCOVERY-COMPLETION UPDATE
25/10/2007	Stokes Bay 1 Exploration Well update
18/10/2007	Stokes Bay-1 Exploration Well Update
11/10/2007	Stokes Bay-1 Exploration Well Update
8/10/2007	Change of Director’s Interest Notice
5/10/2007	Palito Blanco Gas Discovery Update
5/10/2007	Appendix 3B
4/10/2007	Valentine-1 Update and Spudding of Stokes Bay-1

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3/10/2007	PALITO BLANCO GAS DISCOVERY UPDATE
2/10/2007	PALITO BLANCO GAS DISCOVERY
27/09/2007	Valentine 1 update
27/09/2007	Full Year Statutory Accounts
27/09/2007	Palito Blanco drilling update
25/09/2007	Valentine 1 update
24/09/2007	Valentine 1 update
20/09/2007	Valentine 1 drilling update
19/09/2007	Palito Blanco Drilling Update
17/09/2007	Valentine 1 update
13/09/2007	Valentine 1 drilling update
13/09/2007	Appendix 3B
11/09/2007	Pandura Drilling Update
10/09/2007	Valentine 1 Exploration Well Update
6/09/2007	Valentine 1 Exploration Well Update
5/09/2007	TEXAS, USA DRILLING UPDATE
4/09/2007	Update Valentine 1
31/08/2007	TEXAS-USA DRILLING UPDATE
30/08/2007	Valentine 1 Exploration Well Update
28/08/2007	Palito Blanco Well Spuds
27/08/2007	Pandura Prospect Spuds First Well
23/08/2007	Valentine 1 Drilling Update
20/08/2007	Change of Director’s Interest Notice
17/08/2007	Palito Blanco Project, Texas, USA
16/08/2007	Valentine 1 Drilling Report
16/08/2007	Pandura Project-Drilling Contract Signed
13/08/2007	Valentine 1 well spuds
30/07/2007	Progress Report
26/07/2007	Quarterly Activities Report
25/07/2007	Company Secretary Appointment
9/07/2007	Change of Director’s Interest Notice
5/07/2007	Pandura Project-Participation Terms
3/07/2007	Ceasing to be a substantial holder x 2
2/07/2007	Allotment of Securities-Private Placement
2/07/2007	Results of General Meeting

Information in this report 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.

Information in this report pertaining to exploration potential of the Pandura project was compiled by Marv Ginzel, a consultant to Emerald Oil & Gas NL who is a member of the American Association of Petroleum Geologists CPG#26818-3 and the Society of Exploration Geophysicists SEG #4430.

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.

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Appendix 5B

Mining exploration entity quarterly report

Name of entity

	Name of entity
	Emerald Oil & Gas NL
	ABN 009 795 046 Consolidated statement of cash flows
			30 September 2007
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for: (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (3 months) $A’000
		- (1,073) - - (96) - 67 - - -		- (1,073) - - (96) - 67 - - -
		(1,102)		(1,102)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - - - - -		- - - - - - - - -
		-		-
		(1,102)		(1,102)

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1.13 Total operating and investing cash flows (brought forward)	(1,102)	(1,102)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other - Capital Raising Costs 1.20 Other	- - - - - (138) -	- - - - - (138) -
Net financing cash flows	(132)	(132)
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(1,234) 4,031 -	(1,234) 4,031 -
	2,797	2,797

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		114
		Nil
1.25	Explanation necessaryforanunderstanding ofthe transactions
	The amount above includes payments to directors and to a company associated with John Hannaford. The payments relate to the provision of consulting fees, company secretarial services, accounting and bookkeeping, secretarial services and the provision office accommodation on commercial terms.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest N/A

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Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development	$A’000
	1,600
	200
Total	1,800

Reconciliation of cash

Reconciliation of cash	Reconciliation of cash
Reconciliation of cash at the end of the		Current quarter	Previous quarter
quarter (as shown in the consolidated		$A’000	$A’000
statement of cash flows) to the related
items	in the accounts is as follows.
5.1	Cash on hand and at bank	2,797	4,031
5.2	Deposits at call	-	-
5.3	Bank overdraft	-	-
5.4	Other (provide details)	-	-
	Total: cash at end of quarter (item 1.22)	2,797	4,031

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	Progresso Project	Agreement to earn 30% working interest cancelled during the quarter	Earning 30%	Nil
	Palito Blanco	Participation in 15% interest in Palito Blanco Prospect	Nil	Earning 15%

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Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (cents)	Amount paid up per security (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	62,369,261	50,976,255
	12,750,000	12,750,000	18.0	18.0
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-
	-	-
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter	35,605,739 661,638 2,000,000 2,000,000 1,500,000 325,000	35,605,739	Exercise price 20 cents 17.68 cents 25 cents 30 cents 25 cents 25 cents	Exercise date 31/05/08 23/01/11 31/12/08 31/12/09 28/02/10 31/12/09
	6,375,000	6,375,000	20 cents	31/5/08
	-	-

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7.10 Expired during quarter	-	-
7.11 Debentures (totals only)	-	-
7.12 Unsecured notes (totals only)	-	-

Note 1: Subsequent to the end of the quarter a total of 12.75 million shares and 6.375m listed options were issued following the approval of shareholders.

Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does / ~~does not*~~ give a true and fair view of the matters disclosed.

Sign here: Date: 31 October 2007 (Director/Company secretary)

Print name: John Hannaford

Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Cash Flow Statements apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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EMERALD OIL & GAS NL - SEPTEMBER QUARTERLY REPORT 2007

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