EMERALD RESOURCES NL — Interim / Quarterly Report 2007

Jul 25, 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

26 July 2007

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

QUARTERLY ACTIVITIES AND CASHFLOW REPORT - JUNE 30, 2007

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

Yours sincerely,

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JOHN HANNAFORD Director – Finance

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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ASX Release

QUARTERLY ACTIVITIES REPORT FOR THREE MONTHS ENDED 30 JUNE 2007

26 July 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

Highlights

USA

• Emerald participated in 3 exploration wells in USA in the quarter;

• The RJ Hunter#1 well encountered a 50+ foot gas sand at the NW Alice prospect;

• Emerald signed its participation in the Hope prospect, Texas, to be drilled in August ‘07;

• The Company re-negotiated its interest in the Pandura Project, improving farm-in terms.

jhannaford@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) 6,486,638 Unlisted options

Market Capitalisation:

Undiluted $11.2m (18 cents)

Canning Basin WA

• Emerald re-positioned its interest in the EP104 JV, now paying 13% for 12.75% working interest, following a partial farmout to operator ARC Energy.

• ARC Energy is planning 2 wells at EP104/R1 in August and September 2007 to test the 1.09 Tcf potential Valentine project (P10) and the 158 BCF potential Stokes Bay prospect (P10).

Corporate

• The Company completed a capital raising of $3.025 million in early July. Cash reserves of over $4m at the end of the quarter.

Cash on hand 30.6.07 $4.0m

EMERALD OIL & GAS NL – JUNE 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 June 2007.

During the quarter the Company continued its active exploration drilling program in the USA that commenced in March 2007. The Company participated in 3 exploration wells:

• the RJ Hunter #1 well at the NW Alice Project, (Emerald 10%, South Texas)

• the Anderson Barfield # 1 well at Glamour Girl project, (Emerald 15%, South Texas), and

• the Egeberg#1 well at the Greenbush Project (Emerald 15%, North Dakota).

The program met with mixed success with only the RJ Hunter #1 well at the NW Alice project discovering hydrocarbons. Technical issues, however, prevented the operator effectively testing both main gas zones discovered in the Yegua formation. The Company believes this large anticlinal structure has the potential to host a large resource which we believe will be tested again in the fourth quarter of 2007, following a 3D seismic survey.

Strategy

The Company’s strategy of taking modest positions in near term production projects in proven producing areas enables it to spread risk among several projects whilst providing a high level of drilling activity for shareholders. The Company will continue to pursue many new project opportunities in South Texas and onshore USA generally through its network and by acquisition to grow its reserve base, potential production and cash flow. In addition Emerald’s Canning Basin acreage offers longer term production potential with high upside prospects.

Drilling program continues

The next 3 months of 2007 will see a continued high level of activity with ARC Energy’s two high impact wells at EP104 in the Canning Basin of Western Australia to test the large Valentine prospect and the Stokes Bay appraisal well. Exploration wells are also planned in USA at Hope and Pandura in the third quarter.

The Company now has a substantial potential resource base of which projects containing 155 BCF potential gas resources will be drilled in the coming quarter. In particular the drilling of the Valentine prospect representing 125 BCF net potential resource (P10) to Emerald will be a significant event offering substantial leverage to investors in the success case.

Placement

The Company announced a placement to raise over $3 million late in the quarter, which was completed in early July. This raising will enable the Company to fund its share of drilling costs of the upcoming exploration program as well as several new drilling opportunities that are currently being assessed.

The Board would like to thank investors for their continued support and welcome new investors in Emerald. We look forward to an exciting period of growth for the Company as it strives for exploration success and eventually positive cashflow.

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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USA Projects

South Texas

Emerald is attracted to South Texas as its principal area of focus in the USA due to:

• prolific historical producing in the region;

• abundant new opportunities;

• availability of extensive seismic and well data;

• extensive availability of infrastructure;

• large E&P companies re-entering the region;

• development friendly culture;

• abundance of personnel and service companies.

Emerald currently has interests, both earned and earning, in five exploration projects in South Texas. The Company’s strategy is to participate in modest interests in a large number of different projects. The leverage effect of this was seen with the gas discovery at the NW Alice project where Emerald’s 10% interest counts for approximately 7 BCF net potential resources, for a modest outlay in drilling costs. One significant benefit of this strategy is that the company avoids tying up large sums of capital in land prior to drilling. The Company has been able to secure very favourable drilling terms, typically on a “third for a quarter” basis up to casing point.

The Company increased its interests in South Texas during the quarter with its agreement to participate in a 6.87% interest in the 65 BCF potential Hope prospect during the quarter.

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Figure 1. South Texas map showing project locations.

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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 lower Yegua-21 sand at approximately 8,220 feet both encountered gas.

After logging, production casing was run and cemented and the secondary objective, the lower Yegua sand at 8,220 feet, was perforated. A down-hole technical It appears 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 at approximately 8,200 feet, move uphole and perforate the upper zone, which produced gas in the previous offset well to the south drilled by Delta-Gulf in 1954. It is possible that the Operator could sidetrack and re-complete the Yegua-21 zone at a later date or test it in subsequent development wells.

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 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 the consortium drilling a second well in Q4 2007 to confirm the presence of gas in the Yegua 15 and Yegua 21 sands identified in the RJ Hunter #1 well.

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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----- Start of picture text -----

RJ Hunter #1 well
location
Delta-Gulf
well drill in
1954
----- End of picture text -----

Figure 2: Structure map of the Yegua 15 sand at the NW Alice project showing the RJ Hunter well location offsetting the original well in the southern end of the structure. The remainder of the large anticlinal structure has not been tested. Acreage under lease covers the vast majority of the anticline, but has not been shown for confidentiality reasons.

Project Status: Currently permitting for 3D seismic survey. Well to be drilled following processing and interpretation anticipated to spud in Q4 2007.

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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Hope Prospect, Lavaca County, Texas

(Emerald earning 6.87% WI; 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, to be drilled in August 2007. 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.

Prospect Geology

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. 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.

Project status: Operator Main Energy plans to drill the first well in August 2007.

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.

Drilling costs are anticipated to be lower than previous estimates, with dry hole costs in the order of US$1.5 million.

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Project overview

The Pandura prospect is located in the centre of the Lobo Gas Trend in Webb County, Texas, within the Maria H. Llanos gas field. The Kathleen Marie #2 well is a “step-out development well” rather than an exploratory well. The main target of this test is the “6400 sand” which is probably stratigraphically equivalent to what is usually termed the “Lobo 1 Sand”. Secondary targets include Lobo 3 and Lobo 6 sand packages as well as the underlying Navarro Sand.

The Maria H. Llanos gas field, discovered in 1976, lies adjacent to the Rio Grande River and extends across the river into Mexico. It lies adjacent to the Laredo field which has produced 740BCF of gas and 4MMB condensate since its discovery in 1976. On the Mexican side, Pemex is still developing their Pandura, Corindon, and Oasis gas fields which produce from both the Lobo and deeper Navarro sands. These fields were discovered in 1972 and were the precursor to Lobo discoveries on the US side in 1973. Production from the adjacent Mexican fields is reported to be over 300BCF with individual well flow rates ranging from <1 to over 10 MMCF gas per day.

In Emerald’s 2006 prospectus the Company’s independent expert, Marv Ginzel estimated greater than 80% probability of success at the Kathleen Marie #2 well. The Lobo Gas Trend itself is a proven play that has been developed continually from its discovery on the Mexican side of the border in 1970 and its first discovery on the US side in l973. A first successful well would lead to further development of the gas accumulation and could entail as many as seven additional wells based on the current accepted spacing. Total reserves for the primary 6400 Sand could exceed 13 BCF of gas. Should secondary targets be present, reserves could exceed 20 BCF of gas.

Project Status: The Operator anticipates spudding the Kathleen Marie #2 well in September 2007 subject to rig availability.

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

The Glamour Girl prospect is a 2D seismic defined prospect of which leases currently cover 2,000 acres. Operator Anderson Oil spudded the Barfield #1 well on 4 April 2007 and reached target depth of 8,300 feet on 24 April 2007. The well offsets the Arco Elizabeth Taylor Well (500 feet away) drilled in the early 1980’s that had 23 net feet of calculated (from logs) gas/condensate pay that was not completed. The main objective Queen City "B" sand was encountered 40+ feet high to the offset, however the sand was found to be slightly thinner and the porosity had decreased from that in the Arco well. The final lot of sidewall cores from this sand interval showed formation water underlying the gas-bearing section. Log analysis showed the gas-bearing zone to be too thin and tight to be commercially viable. The partners in the well agreed to plug and abandon the well after disappointing wireline log and sidewall core results. Several other thin, gas-bearing sands were also encountered in the Queen City but porosities were too low to produce at commercial rates. The well was plugged and abandoned on 27 April 2007.

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 .

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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Greenbush Project, Ward & Renville Counties, North Dakota

(Emerald 15% Working Interest; Operator: Golden Eye Resources)

The recently completed and interpredted Greenbush 3D seismic survey has defined a number of different drill targets within the acreage currently under lease. These targets include a Kisbey sand play in the NW part of the block, a Sherwood algal mound carbonate play near the old Greenbush field and a deeper Winnipegosis (Devonian) pinnacle reef play in the central portion of the block.

The first well (Egeberg#1) following this survey and interpretation targeted the Kisbey sand trend updip from a producing Kisbey well. The Egeberg#1 well encountered well-developed Kisbey sand with oil staining however it was not trapped and the sand was water-bearing.

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.

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 1800 - 2000 acres over this prospect. The consortium is farming out a 3-D seismic survey and one well possibly in Q1, 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.

Progresso Project, Hidalgo County, Texas

(Emerald earning 30% Working interest)

The Company withdrew from this project following the advice from the Operator Daytona Energy Corporation that its new management did not intend to proceed with drilling the project. Subsequent to the end of the quarter Emerald reached agreement with Daytona to cancel the 250,000 Emerald shares issued to Daytona in June 2006 for Emerald’s participation in the 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.

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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Australian projects

EP104, Canning Basin WA

(Emerald earning 12.75% Working Interest; Operator: Arc Energy Ltd)

During the quarter Emerald reached agreement in principle with ARC Energy Limited (“ARC”) whereby Emerald will assign to ARC a part of its earn-in interest in the EP104/R1 licences in the Canning Basin. Under the terms ARC will pay 12% of the agreed earn-in expenditure for a 6% working interest in the licences. The agreement is subject to the finalisation of formal documentation and the consent and approval of other joint venture parties.

At the completion of the agreement, Emerald will retain the right to earn a 12.75% interest in the EP104/R1 licences for payment of 13% of the costs of the first well. Hence Emerald’s exposure to drilling costs will reduce from 25% to 13% in the first well.

This agreement will significantly reduce Emerald’s costs in the two wells, whilst preserving a meaningful working interest level in this high reserve potential project. The estimated net potential resource to Emerald is approximately 125 BCF of gas if hydrocarbons are present (P10).

The Joint Venture has approved a program to drill two wells from the same location commencing in mid August 2007, as follows:

1. Valentine : vertical well to test the Valentine prospect with estimated resource potential as below.

as below.
Valentine	Mean	P10
Gas	380 BCF	1,091 BCF
Condensate	19 mmb	54 mmb

1. Stokes Bay: deviated well to test the Stokes Bay prospect which is following up the Point Torment gas discovery and has resource potential as below:

Stokes Bay	Mean	P10
Gas	60 BCF	158 BCF
Condensate	3 mmb	8 mmb

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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----- Start of picture text -----

Proposed deviated
Stokes Bay #1 well
to re-enter the
Anderson formation
Proposed Valentine
#1 vertical well to
test the 1 TCF
potential in the Virgin
Hills formation
----- End of picture text -----

Figure 3: Seismic section showing both proposed wells – Valentine the deeper vertical (practically) well, and Stokes Bay, a deviated shallower well. Both are to be drilled form the same well bore, saving time and costs.

Project Status: ARC Energy plans to drill two wells at EP104, commencing in mid August 2007.

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 Nature Title process.

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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.

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Figure 4: Canning Basin showing Emerald’s EP104 / R1 (yellow) and EPA 4/05-6 (green) interests, and mapped prospects and leads. The main feature on both leases is the Pinnacle Fault, the source of much of the previous hydrocarbon production in the Canning Basin.

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DRILLING PROGRAM

Emerald will continue its active drilling program in the coming quarter with 4 wells planned including the first wells to be drilled in the Canning Basin.

Project	Emerald	Emerald attributable	Timing
	Interest	potential resource
		(unrisked)
*** EP104/R1**– (Canning Basin WA) - Valentine well	12.75%	125 BCF	August 07
*** Hope**– (Texas USA) - first well	6.87%	3.3 BCF	August 07
*** EP104/R1**– (Canning Basin WA) - Stokes Bay well	12.75%	18 BCF 1.2 MMBO	September 07
*** Pandura**(Texas, USA) – Kathleen Marie #2 well	15.0%	2.2 BCF	September 07
*** NW Alice**(Texas USA) – seismic acquisition, further drilling	10.0%	7 BCF	Q4 07 – Q1 08
*** Steamboat**(Texas USA) – seismic acquisition then drilling	25% (pre farmout)	18.75 BCF	Q1 08

Corporate

During the quarter the Company announced its intention to raise a total of $3.015 million through a private placement of 16.75 m shares at 18 cents each and 8.375 m options exercisable at 20 cents each. A total of 4 m shares and 2 m options were issued on 31 May 2007. The remaining 12.75 m shares and 6.375 m options were issued and allotted on 2 July following shareholder approval at the EGM held on that day. The shares and options were issued to sophisticated investors, existing shareholders and other clients of Capital Investment Partners Pty Ltd.

At 30 June 2007 the consolidated entity had $4 million cash on hand, (including the funds raised pursuant to the placement.)

A total of 6,031 shares were issued during the quarter on conversion of listed options.

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

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25/07/2007	Appointment of CompanySecretary
19/07/2007	EGO: Drillingof the Valentine-1 and Stokes Bay-1 wells in EP104
09/07/2007	Change of Director`s Interest Notice
05/07/2007	Pandura Project - Participation Terms
03/07/2007	Ceasingto be a substantial holder x 2
02/07/2007	Allotment of Securities - Private Placement
02/07/2007	Results of General Meeting
28/06/2007	Appendix 3B - Exercise of Options
25/06/2007	Release from escrow
08/06/2007	Appendix 3B
07/06/2007	Ceasingto be a substantial holder
01/06/2007	DrillingUpdate - Greenbush Project
01/06/2007	Notice of ExtraordinaryGeneral Meeting
31/05/2007	Progress Report - Egeberg#1 Well
31/05/2007	Greenbush drillingupdate
30/05/2007	Appendix 3B
29/05/2007	Greenbush DrillingUpdate
25/05/2007	Disclosure Document
22/05/2007	ARQ: Additional interest in EP104 JV
22/05/2007	EP104 interests
22/05/2007	Greenbush drillingupdate
21/05/2007	Placement
17/05/2007	TradingHalt
14/05/2007	Greenbush Project Update
07/05/2007	Change of Director's Interest Notice x2
04/05/2007	NW Alice Project Update
30/04/2007	Third Quarter Activities & Cashflow Reports
30/04/2007	Drillingupdate USA
30/04/2007	New USAproject - Hope Prospect
26/04/2007	TradingHalt
24/04/2007	DrillingUpdate - Correction
24/04/2007	DrillingUpdate
19/04/2007	DrillingUpdate
17/04/2007	TradingHalt
13/04/2007	Change of Director's Interest Notice
10/04/2007	Glamour Girl Prospect DrillingUpdate
05/04/2007	Glamour Girl Prospect Prepares to Spud Initial Well
02/04/2007	DrillingUpdate - NW Aliceproject

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.

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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Appendix 5B

Mining exploration entity quarterly report

Name of entity

	Emerald Oil & Gas NL
	ABN 009 795 046 Consolidated statement of cash flows
			30 June 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 (12 months) $A’000
		- (567) - - (227) - 150 - - -		- (1,495) - - (1,131) - 250 - - -
		(644)		(2,376)
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)		- - - - - - - - -		- - - - - - - - -
		-		-
		(644)		(2,376)

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1.13 Total operating and investing cash flows (brought forward)	(644)	(2,376)
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 - Funds received in lieu of placement (shares issued after qtr end)	721 - - - - (5) 2,295	724 - - - - (547) 2,295
Net financing cash flows	3,011	2,467
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	2,367 1,664 -	91 3,940 -
	4,031	4,031

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	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
			46
			Nil
1.25 Explanation necessary for an understanding of the 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 onconsolidated assets andliabilities but didnotinvolve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in projectsin whichthereporting entityhas an interest N/A		Explanation necessary for an understanding of the 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.
	N/A
	Details of outlays made by other entities to establish or increase their share in projectsin whichthereporting entityhas 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 available $A’000	Amount used $A’000
		-		-
		-		-
	Estimated cash outflows for next quarter
	4.1 Exploration and evaluation 4.2 Development			$A’000
				1,500
				-
	Total			1,500
	Reconciliation of cash
	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000		Previous quarter $A’000
	5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	4,031		1,664
		-		-
		-		-
		-		-
	Total: cash at end of quarter(item 1.22)	4,031		1,664

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
	Canning Basin, WA	Reduced earning interest in EP104	Earning 18.75%	Earning 12.75%
	Lavaca County Texas, USA	Participation in 6.87% interest in Hope Prospect	Nil	Earning 6.87%

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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	49,619,261 (note 1)	37,476,255
	4,000,000 6,712	4,000,000 6,712	18.0 20.0	18.0 20.0
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	29,230,739 661,638 2,000,000 2,000,000 1,500,000 325,000	29,230,739	Exercise price 20 cents 17.68 cents 25 cents 30 cents 25 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 31/12/09
	2,000,000	2,000,000	20 cents	31/5/08
	6,712	6,712	20 cents	31/5/08

EMERALD OIL & GAS NL – JUNE QUARTERLY REPORT 2007

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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: 26 July 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 – JUNE QUARTERLY REPORT 2007

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