EMERALD RESOURCES NL — Interim / Quarterly Report 2009

Oct 30, 2008

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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, 2008

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

QUARTERLY ACTIVITIES AND CASHFLOW REPORT – SEPTEMBER 30, 2008

Please find attached the Quarterly Activities Report and Appendix 5B Quarterly Cashflow Report for the quarter ended September 30, 2008.

Yours sincerely,

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JOHN HANNAFORD Director – Finance

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ASX Release

31 October 2008

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:

115,481,534 Shares (EMR) 6,486,639 Unlisted options

Market Capitalisation: Undiluted $10.4m (@ 9 cents)

Cash on hand 30.6.08 $4.2m

QUARTERLY ACTIVITIES REPORT FOR THREE MONTHS ENDED 30 September 2008

Highlights

USA

• Appalachian Basin Gas Development Project , Kentucky & West Virginia. 8 gas wells to date: 6 wells hooked up to flowlines in Kentucky; brief production test recorded during the quarter from 5 wells. 2 new wells in West Virginia awaiting hookup and frac stimulation.

• Signed MOU to acquire 25% interest in 50 existing wells in Kentucky. Due Diligence continuing, closing to occur in the coming quarter.

• Exclusive rights to develop 90,000+ acres of leases over 10 year period. Continuous drilling program planned, all infrastructure being commissioned, turnkey drilling rates, low risk development.

• Extension of Marcellus shale play present on West Virginia leases, major players commencing horizontal developments on surrounding leases.

• Greenbush Project, Ward & Renville Counties, North Dakota. Farmout to Encore Operating during the quarter, whereby Encore to commit to drilling one horizontal Bakken well in Q4 2008, for a 75% working interest. Emerald received A$1.3 million in cash reimbursement of prior costs after the end of the quarter and retains a 3.75% interest after payout (APO).

• NW Alice Project, Jim Wells County, Texas. The operator has advised that the 3-D seismic data has been processed and interpreted confirming extensive anticlinal structure with Yequa sands intersected in discovery well in March 2007. Partners plan to drill a follow up well in Q1 2009.

Canning Basin WA

• EP104 JV, Stokes Bay #1 well – Operator completed inspection during the quarter and is currently undertaking nitrogen stimulation flow test of well.

• New Block Award – Emerald’s total acreage over 14,000 km[2] following notification it is the preferred applicant for offshore permit EPA 13SL/07-8.

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2008

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USA Projects

Appalachian Basin, Kentucky and West Virginia (Emerald earning 80% Working Interest; Operator: P&J Resources Inc)

Overview

During the quarter Emerald made significant progress at its Appalachian Basin Gas Development Project with the following highlights:

• acquired 6 existing gas wells in Magoffin County, Kentucky

• drilled 2 new wells in Wayne County, West Virginia

• entered into agreement to acquire a 25% interest in 50 existing wells in Magoffin County and associated 35 mile pipeline (25%) and Amine plant (50%)

• entered into an agreement to acquire an interest in a 10 mile pipeline (12.5%) and connection tap (25%) in Wayne County, West Virginia to secure gas trunkline access.

• Production rates on 5 wells confirmed within expectations during brief production period.

The vast potential of the Appalachian project covering over 90,000 acres is exceeding initial expectations. Several additional opportunities are being assessed within the project area whereby shut-in, suspended and un-completed gas wells can be quickly brought into production now that pipeline and processing infrastructure is being established. Emerald is working closely with its partner P&J Resources to quickly establish significant gas production levels to take advantage of current high gas demand in the Appalachian Basin. Emerald sees this as a low risk, low cost way to quickly establish production without attendant drilling risk.

Emerald is also assessing the potential for Marcellus shale production in its West Virginia acreage. Wells are drilled through the Marcellus shale to test the primary target Big Six formation. Several major gas producers have been acquiring large tracts of “Marcellus” acreage where horizontal completions have produced at rates between 4 MMcf/day and 7 MMcf/day further north in the Basin.

In Kentucky new deeper wells will be drilled to test the Trenton/Black River formation, then completed in the Big Six Sandstone. Previous wells that successfully produced from the Trenton/Black River were far superior to the Big Six, with one well producing at over 1,000 barrels of oil per day.

Emerald will assess the Trenton and Marcellus data from existing wells and will then be in a position to tailor future drilling programs to further evaluate and develop both formations horizontally in addition to the vertical Big Six completions.

P&J Resources also have approximately 300 old wells that originally targetted shallower formations. The wells are now either shut-in or are producing at marginal rates. Emerald is in discussions with P&J to assess a workover program aimed at augmenting production from these wells or possibly deepening some of them.

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Location

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P&J Resources’ acreage covering over 90,000 acres is located in Magoffin County, Kentucky and Wayne County, West Virginia.

Operations

Magoffin County, Kentucky

Emerald has the following 6 wells that were put into production in August 2008. Each well was equipped with a “scrubber” to remove any H2S gas, pending the completion and commissioning of P&J Resources’ Amine plant. Production was through the existing gathering lines with sales via a capped quota with Jefferson Energy. The Operator P&J Resources suspended production after five days due to the high consumption of “Sulphur Treat”, a chemical used in the scrubbers to remove the H2S, which made it uneconomic, given the limited production capacity available. This will be overcome once the Amine plant has been completed in the coming quarter.

Well	Emerald NRI*	Date Drilled	Depth (feet)	Form- ation	Fracture Stimulated	Status
JD Vander-pool #5	70%	Completed May 2008	4,000	Big Six	No	Waiting for Amine plant
J Montgomery-1	70%	Sep 06	2,976	Big Six	No	“ ”
J Montgomery-2	70%	Sep 06	3,147	Big Six	No	“ ”
Thomas Keeth-1	70%	Sep 06	2,280	Big Six	No	“ ”
Don Cecil-1	70%	Sep 06	2,446	Big Six	No	“ ”
Timothy Franklin-2	70%	Sep 06	~3,000	Big Six	No	“ ”

* Emerald has an effective 90% equity interest in the entity that holds the Appalachian project

Production totaled 1,555 Mcf for the five day period with daily flow rates ranging between 45 and 92 Mcf/day per well. Flow rates were constrained due to the limited production quota available. Absolute open flow rates are anticipated to be substantially higher. Further increases will be achieved after fracture stimulation of each well.

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Gas sales averaged approximately US$8/mcf during the period.

All wells will be put on full production once the installation of the Amine plant and construction of the 35-mile, 8-inch pipeline are complete and gas can be sold into new customer agreements with more capacity. Completion of the installation is anticipated in the fourth quarter of 2008.

Wayne County West Virginia

Two wells drilled in Wayne County can be put onto production once fracture stimulation has been completed subsequent to the end of the quarter.

Well	Emerald NRI*	Date Drilled	Depth (feet)	Form- ation	Fracture Stimulated	Status
Myrtle Crum #4	66%	Aug 08	5,200	Big Six	No	Awaiting frac
Chiarenzelli 1	66%	Sept-Oct 08	5,200	Big Six	No	Awaiting frac

* Emerald has an effective 90% equity interest in the entity that holds the Appalachian project.

50 well acquisition

During the period Emerald signed a Memorandum of Understanding with P&J to acquire a 25% interest in 50 wells drilled between 2004 and 2006 in Magoffin County Kentucky. These wells have all produced gas however pipeline capacity constraints and lack of infrastructure have curtailed production, with the wells shut in since 2006. P&J is close to completion of a 35-mile, 8-inch pipeline that connects to the El Paso trunkline which has excess gas transmission capacity.

The 50 wells are all vertical Big Six completions, drilled to less than 3,000 feet. Production rates have been between 40 and 80 Mcf per day per well (without fracture stimulation). It is planned to put the wells on to production then proceed fracture stimulation to enhance production. It is envisaged that fracture stimulation may as much as triple gas production rates.

Under the MOU Emerald will also acquire a 25% interest in the 35 mile pipeline and a 50% interest in the Amine plant that have both been recently constructed and are nearing commissioning.

In Wayne County West Virginia, Emerald has entered into an MOU to acquire a 25% interest in the pipeline “tap” and associated equipment connected to the El Paso transmission line. This is a strategic move to ensure that Emerald will always retain access to El Paso’s line. Emerald will be entitled to receive a transmission fee for all gas passing through the “tap”. In addition Emerald will acquire a 25% interest in P&J’s 10-mile, 10-inch gathering line in Wayne County, West Virginia. This line provides the only access to El Paso’s trunkline for the immediate area, so third party producers will have to pay a fee to use the line.

Agreement

The total consideration for the acquisitions is US$950,000 in cash and 4.5 million Emerald shares.

This acquisition will significantly expand Emerald’s production and development activities in the Appalachian Basin and will further entrench Emerald’s relationship with P&J Resources.

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P&J retains a 25% interest in the wells with an unrelated third party retaining the remaining 50%.

Emerald is confident it can complete its due diligence and close the transaction in the coming quarter.

Drilling

During the quarter P&J Resources drilled two new wells in Wayne County West Virginia, with Emerald retaining an 80% working interest (66% NRI). The Myrtle Crum #4 and Chiarenzelli #1 wells were drilled to 5,200 feet with the primary target being the Big Six formation. The secondary target Marcellus Shale formation was intersected in both wells. The wells have been logged and Emerald anticipates that they will be fracced and put on to production flowlines in November. An Amine plant and pipeline infrastructure is already in place.

Well	Emerald USA NRI*	Date Drilled	Depth (feet)	Formation	Fracture Stimulated	Status
Myrtle Crum #4	66%	Aug 08	5,200	Big Six	No	Awaiting frac
Chiarenzelli 1	66%	Spudded Aug 08	5,200	Big Six	No	Awaiting frac

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Drilling rig on location at Chiarenzelli 1 well site, Wayne County West Virginia.

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2008

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Stratigraphy

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• Marcellus Shale * Big Six

Generalized stratigraphic column for Wayne County, West Virginia

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2008

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Resource Estimation

Emerald has engaged Houston-based energy consultants Ralph E. Davis Associates to prepare an initial resource/reserve estimate for Emerald’s Appalachian Project. This will cover Proven Developed/Producing (PDP) and Proven Undeveloped (PUD) locations on the Appalachian project and an assessment of the overall potential of the project. This estimate, in conjunction with establishing stabilised production will enable a re-rating of Emerald’s valuation in the next quarter.

Production and Gathering Infrastructure

P&J Resources is in the process of completing installation of an Amine plant on each of the Kentucky and West Virginia acreage areas allowing treatment of gas impurities including H2S and CO2. No water disposal equipment is required at these wells as the gas is dry.

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P&J Resources’ Amine Plant in Wayne County West Virginia.

Funding

During the quarter Emerald announced it had executed a Participation Agreement with Avant-Garde Resources LLC, a Kentucky corporation, whereby Avant Garde agreed to contribute a minimum of US$4 million per quarter for a 40% working interest in each well drilled, leaving Emerald with a 40% interest and P&J Resources with 20%. Avant Garde have indicated that at the date of this report they are yet to raise the requisite funds to earn their interest, yet are confident they can secure funding in the coming quarter.

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Emerald is currently negotiating with a number of other potential funding parties in addition to on-going discussions with Avant Garde.

Drilling Program

P&J are in the process of permitting additional drilling locations in both Kentucky and West Virginia.

Greenbush Project, Ward & Renville Counties, North Dakota (Emerald 3.75% Working Interest after payout; Operator: Encore Operating LP)

During the quarter Emerald announced that the Operator of the Greenbush Project reached agreement to farm-out the project to Encore Operating LP on the following terms:

• Encore to fund the drilling of a horizontal well from the Brekhus#2 well location to test the Bakken and Three Forks formations;

• Encore to earn 75% by drilling the Bakken/Three Forks well through to the tanks, with Greenbush partners being free carried for a 25% working interest after payout (APO).

• Encore to reimburse Greenbush project partners for previous sunk costs in the project;

Emerald retains a free carried 3.75% working interest after payout in the project and has subsequent to the end of the quarter received full reimbursement of A$1.3 million cash for its costs incurred in drilling, 3-D seismic and leasing on the project.

Encore plans to drill its horizontal Bakken well in the fourth quarter of 2008.

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

The Operator, Noble Energy, has completed processing and interpretation of the 3D seismic data covering the large 100 Bcf anticline structure where the discovery well was drilled in March 2007. The operator is completing the acquisition of further leases in the Area of Mutual Interest following the interpretation of the 3D seismic data. A follow up well is planned for early 2009.

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

No progress was made during the quarter in securing a farminee to fund the seismic program at the Steamboat 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 current partners and other industry participants.

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2008

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Australian Projects

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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 new EP L07-6 & T07-1 (Lacapede Islands) and EPA 13SL/07-8 blocks (Emerald 100%) are shown in yellow. The main feature on all leases is the Pinnacle Fault, the conduit for much of the previous hydrocarbon production on the Lennard Shelf portion of the Canning Basin.

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

During the quarter Emerald announced that the Operator of the Stokes Bay-1 testing programme, Buru Energy Limited, advised that equipment and specialised well workover and stimulation personnel had inspected the Stokes Bay-1 wellsite, in the EP 104/R1 Permits located in the Canning Basin, near the town of Derby, Western Australia.

As a result of the inspection a workover programme was agreed and planned to be conducted in late October. The workover and testing crew expect to commence testing the cavernous reef system intersected in the well within the Nullara Formation carbonates using nitrogen as the circulation fluid. Service Company, BJ Services, are mobilising a nitrogen unit together with specialised equipment to the wellsite.

Final technical work on the Stokes Bay-1 testing programme concluded that nitrogen is the best fluid for circulation of the heavy drilling fluids out of the Nullara Formation.

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Nitrogen will be used to reduce the pressure on the formation in an effort to induce a flow from the Nullara Formation. This nitrogen programme is deemed by the Operator to be the best programme replacing the previous one using surfactant with fresh water.

Emerald and the EP 104/R1 Joint Venture parties look forward to providing the results of this testing programme and the future programmes dependent on these test results.

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, is currently proceeding through the Native Title process.

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 1 above.

Emerald believes there is significant potential to discover several similar prospects to Stokes Bay on this large acreage block covering the western extension of the Pinnacle Fault. The Pinnacle Fault is a key structural element between the Fitzroy Sub-Basin and the Lennard Shelf. It is believed to be the conduit for oil and gas migration from the Fitzroy Sub-Basin into structural and stratigraphic traps on the adjacent Lennard Shelf to the north.

EP L07-6 & T07-1 (Lacapede Islands) Offshore Canning Basin, WA (Emerald 100% Working Interest and operator)

The award of new tenements EP6/07-8, EPIT/07-8 consolidates Emeralds strategic holdings along the structurally significant Pinnacle Fault zone (PFZ) and its projection offshore.

In view of the successful discovery of Devonian “reefal” reservoir rocks in the Stokes Bay 1 well at EP104/R1, which is to be further tested in October 2008, Emerald believes there is significant potential to discover several similar prospects along the western extension of the Pinnacle Fault (map above) both onshore and offshore.

Application W07-12 Offshore Canning Basin, WA (Emerald 100% Working Interest and operator)

Subsequent to the end of the quarter Emerald was notified by the WA Department of Industry and Resources (DoIR) that it had been named preferred applicant for exploration permit W07-12 (appl. 13SL/07-8), offshore Canning Basin WA. This application further consolidates Emerald’s strategic holdings along the structurally significant Pinnacle Fault zone and its interpreted projection offshore (map above).

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Emeralds current tenement holdings in the Canning Basin are:

Exploration Permit/Retention Licence/Applications Emerald Net Working Interest	Permit Size (approx sq km)
EP 104 (R5) 12.75% Retention Lease R1 12.75% Application L98-1 (option) 12.75% Application EP 4/05-6 100% Application L07-6 100% Application T07-1 100% Application 13SL/07-8 (W07-12) 100% Total	700 290 200 4,600 200 400 8,000
	14,390

Emerald is pleased to have secured such an extensive contiguous package covering several hundred kilometres of the Pinnacle Fault. Emerald will assess the optimal means to fund exploration programs following award of the permits after completing native title negotiations.

Drilling Program

Project	Emerald	Emerald attributable	Timing
	Interest	potential resource
		(unrisked)
• Appalachian Basin,Drilling and Operating Agreement to develop up to 90,000 acres in West Virginia and Kentucky USA, Emerald to earn 80% working interest.	80%	TBC	Q4 08
*** Stokes Bay #1**(Canning Basin WA) – re-testing well drilled in Nov 07	12.75%	20-40 BCF, condensate potential	Q4 08
*** NW Alice**(Texas USA) – seismic interpretation, further drilling likely in 1stquarter, 2009	10.0%	7 BCF	Q1 09

Corporate

At 30 September 2008 the consolidated entity had $4.2m cash on hand. Subsequent to the end of the quarter Emerald received over A$1.3 million as its share of cost reimbursement for the Greenbush Project as part of the farmout to Encore Energy, bringing its cash on hand at 31 October to approximately $5.2 million.

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Sale of Unmarketable Parcels of Shares

During the quarter the Company closed its Small Share Parcel Facility. A total of 382 Shareholders took advantage of the facility, which has resulted in the Company being able to reduce its share register from 1,860 down to a more manageable 1,478 shareholders.

Placement of the 75,555 shares under the Small Share Parcel Sale Facility was completed at a price of 10.5 cents each. Cheques were remitted accordingly to shareholders who took part in the scheme.

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

Date

Announcement Details

10/10/2008 7/10/2008 7/10/2008 6/10/2008 3/10/2008 26/09/2008 24/09/2008 16/09/2008 3/09/2008 3/09/2008 3/09/2008 3/09/2008 3/09/2008 3/09/2008 21/08/2008 19/08/2008 13/08/2008 12/08/2008 12/08/2008 6/08/2008 31/07/2008 31/07/2008 23/07/2008 17/07/2008

New Canning Basin Acreage Stokes Bay Update Update on the Testing Programme for Stokes Bay-1 Small Share Parcel Sale Facility Completed GREENBUSH PROSPECT, USA Full Year Statutory Accounts US Projects Update Sale of unmarketable parcels of shares update FAR: Stokes Bay-1 Well Testing Stokes Bay Update EGO: Replacement of Previous Ann. re Stokes Bay 1 Well PCL: Stokes Bay testing EGO: Testing the Stokes Bay-1 Well, R1, Canning Basin, WA BRU: Stokes Bay 1 well test Appalachian Update Sale of Unmarketable Parcels of Shares MOU to Acquire interest in 50 wells Company Presentation US PROJECTS UPDATE Greenbush Project Drilling Update QUARTERLY ACTIVITIES AND CASHFLOW REPORT Greenbush Project Update GREENBUSH PROJECT UPDATE GREENBUSH PROJECT UPDATE

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2008

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For more information please contact:

Emerald Oil & Gas NL Tel: +618 9482 0510

JOHN HANNAFORD

Executive Director – Finance jhannaford@emeraldoilandgas.com

BOB BERVEN Executive Director – Technical bberven@emeraldoilandgas.com

About Emerald Oil & Gas NL

Emerald Oil & Gas NL (ASX: EMR) was listed on the ASX in June 2006. Emerald is an oil and gas exploration and production company with project interests in Kentucky, West Virginia, North Dakota 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. Emerald’s strategy is to take modest but meaningful positions in exploration projects that can be swiftly brought into production.

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.

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

Emerald Oil & Gas NL

ABN 009 795 046	Quarter ended(“currentquarter”)
009 795 046	30 September 2008

Consolidated statement of cash flows
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
	(979) (239) 89	(979) (239) 89
	(1,129)	(1,129)
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 (carriedforward)	(115)	(115)
	(115)	(115)
	(1,244)	(1,244)

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1.13 Total operating and investing cash flows (brought forward)	(1,244)	(1,244)
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
Net financing cash flows	-	-
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	(1,244) 5,407 -	(1,244) 5,407 -
	4,163	4,163

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
		159
		Nil
1.25	Explanation necessary for an understanding of the transactions
	The amount above includes payments to directors and to companies associated with John Hannaford and Jeremy Shervington for this quarter and previous quarters. The payments to Ventnor Capital, accompany associated with John Hannaford relate to the provision of consulting fees, company secretarial services, accounting and bookkeeping, secretarial services and the provision office accommodation on commercial terms. The payments to Jeremy Shervington Legal Practice relate to the provision of legal services 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

• 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.

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

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	500
	800
	200
Total	1,500

Reconciliation of cash

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)	4,163	5,407
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	4,163	5,407

Changes in interests in mining tenements

g tenements
Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter

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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) Increases through conversion of options (c) Release from escrow (d) Decreases through returns of capital, buy- backs	115,481,534	115,481,534
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 7.10 Expired during quarter	661,638 2,000,000 2,000,000 1,500,000 325,000		Exercise price 17.68 cents 25 cents 30 cents 25 cents 25 cents	Exercise date 23/01/11 31/12/08 31/12/09 28/02/10 31/12/09
	-	-
	-	-
	-	-
7.11 Debentures (totals only)	-	-
7.12 Unsecured notes(totals only)	-	-

EMERALD OIL & GAS NL – SEPTEMBER QUARTERLY REPORT 2008

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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:

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Date: 31 October 2008

(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 2008

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