EMERALD RESOURCES NL — Investor Presentation 2010

May 24, 2010

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Emerald Oil & Gas NL Operations Update

25 May 2010

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Disclaimer

This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectation reflected in the statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially to those stated, including but not limited to: product price fluctuations, currency fluctuations, drilling and production results, reserve estimates, loss of market , industry competition , environmental risks , physical risks , legislative, fiscal and regulatory developments, economic and financial market conditions, project delay or advancement, approvals and cost estimates. Investors should undertake their own analysis and obtain i n d epen d en a t d v ce e ore nves i b f i ti ng n mera i E ld s h ares. All re erences o f t dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.

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Operations Update Summary

NW Alice – increase from 14% to WI to 35% in 4500 lease acres

• Acquisition of Noble lease interests in 4500 lease acres and 15 mi[2] 3D seismic data to close by end May

• Planning to drill follow up to discovery well in August 2010

• NOXXE LLC – final closure on 31.5% equity interest option imminent

• All substantial Company Agreement issues agreed, awaiting final draft

• Currently producing 75-100 bopd

• Working to start gas production North Dyersdale and Dickinson fields

• Expect first “Attic Oil” drilling late 2010

Appalachian Gas – initial Beetree gas production expected Q3

• 30Mcfd gas from 22 Mile project

• Working toward commissioning of Beetree sweet gas production system in Q3 (expect 500[+ ] Mcfd initial gas production,1MMcfd by end year)

• Large sour gas opportunity identified

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Emerald’s Business Plan On Track

1. Establish surplus operating cash flow – top priority in 2010 Appalachian Gas – gas production from multiple gas projects –

NOXXE oil and gas production from 3 developed fields

2. Deliver step change Company value growth – 2010/2011 – increase WI to 35% and drill well on 100[+] Bcf Ye ua

NW Alice (Oso JV) g gas structure discovered in 2007

• NOXXE – drill 2MMbbl of attic oil on Humble salt dome, Wilcox gas plays

3. Identify and capture high value potential for 2011+ Canning Basin - 8600 km[2] exploration permits prospective for gas, oil and CO 2 geosequestration for LNG developments, well test to demonstrate

commerciality of 2007 Stokes Bay #1 gas discovery planned for 2010 New High Potential Value plays –resource plays (e.g. shale gas/oil) or exploration plays close to gas markets (e.g. North America, Europe), $US10[+] MM investment size , fund throu g h selective sale of US assets

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Emerald Asset Portfolio
R1, EP104, (12.75% WI)
- 800 km² permits P & J JV (80% WI)
- Stokes Bay gas discovery? -
8 wells Ky
Canning Appalachian - 50% Amine Plant
Basin Gas Projects
KEP LLC (75% equity)
TP24, EP463
- 14 gas wells
WA-419-P (100% WI)
- 2000 lease acres
- 8600 km² exploration permits
- Multiple gas projects
(direct EMR interest %)
Cashflow
Company Value Growth
High Value Upside Dickinson (100% WI)
- 38 lease acres
- 3 wells
OSO JV (35% WI) NOXXE LLC
- 4500 lease acres NW Alice (31.55% equity) - 77,000 bbl proved oil reserves
- drill wells in 2010 and 2011
- expect approx 2 Bcf gas,
60,000 bbl oil per well
North Dyersdale (37% WI)
Humble (90% WI) - 222 lease acres
EMR (100% WI) - 1027 lease acres - 3 prod, 1 water disp
- 178 lease acres including discovery well - 22 existing wells - 335 MMcf proved gas reserves
- acquire additional 1,000 to 1,500 lease acres - 1.3 MMbbl proved oil reserves - 22,000 bbl proved oil reserves
- re-drill RJ Hunter discovery well in 2011 - 1 9 Bcf possible gas reserves.
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Emerald Asset Portfolio

USA (Texas & Kentucky)

NW Alice (35% WI)

• 4500 lease acres over anticline structure holdin Possible reserves[(2.) ] of 100+ Bcf g

• gas and 2.5+ MMbbl condensate

• 6.6 Bcf gas and 165,000 bbl oil Proved + Probable reserves(100%WI)[(2.) ] from RJ Hunter #1 discovery well

. i i NOXXE LLC (31 5% equ ty nterest)

• 1300 lease acres in 3 producing oil fields

• 1.4 MMbbl Proved oil reserves[(1.) ] and 1.9 Bcf Possible gas reserves[(1.) ]

• Currently producing approximately 100bopd

Kentucky Energy Partners LLC - KEP (75% equity interest)

• 2000 lease acres holding 14 existing gas wells

• Multiple gas development projects underway

Australia (Canning Basin, WA)

• 8600km[2] expl permits @ 100% WI near LNG hub – gas, oil, CO2 geosequestration

• • – .

• – .

• Potential commercial gas discovery Stokes Bay #1 (12 75% WI)

• • – -

• Oil production farmin option West Kora 1 well (pay 13% for 12.75% WI)

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Emerald ‘Indicative’ Projects Schedule to June 2011

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2010 2011
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Appalachian Gas
22 Mile
Target 1 MMcfd by New KEP Project A
LL Arnett
KEP (75% equity) end 2010
New KEP Project B
Beetree Salt Lick
Increase to 35% WI
NW Alice 2 MMcfd
in 4500 lease acres 2 MMcfd
& 15mi2 3D seismic 60 bopd 60 bopd
OSO JV (35% WI) Oso JV well #1 Oso JV well #2
2 MMcfd
Acquire 1000 to 1500 Lease Acres @ 100% WI 60 bopd
EMR (100% WI) EMR JV well #1
Farm out 50% WI
NOXXE (31.5% eq) Attic Oil Sidetrack drilling 70 bopd per well
75 bopd
Existing oil well rework program
Humble
3D Seismic Interp
2 well recompl 30 bopd
North Dyersdale 25 bopd 300Mcfd
Dickinson 40 bopd
Antic pai ted Expectation production assuming successful well
Drilling New Production
Commercial Dealing outcomes (unrisked), best estimate activity timing
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Indicative Emerald Cashflow Metrics

EMR Net Revenue from 1 full year of gross wellhead production:

Appalachian Gas @1MMcfd $A1,070,000 NW Alice Gas @1MMcfd * $A722,000 NOXXE @100bopd $A517,000

Price Assumptions: Gas Price $US4.00 per 1000 BTU Oil Price $US60 per bbl

* NW Alice gas contains 30 bbl oil per MMcf gas**

Note: These are not a production forecasts. The above Net Revenues represent gross revenue for one ear of wellhead roduction y p at the daily production rate and price assumptions indicated, multiplied by EMR’s net revenue interest in that asset.

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NOXXE 31.5% EMR equity option in NOXXE LLC

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• 3 oil & gas fields, within 30 miles of Houston, Texas: • H um bl e approx ( 90% WI) - 22 ex st ng we i i ll s, attic oil drilling, Wilcox gas drilling location

• • North Dyersdale ( 37.3% WI) – 2 oil &1 gas wells

• • Di c kin so n ( 1 00% WI ) – 1 o il p r od, 2 s h ut in w e ll s

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• Proved reserves [(1.)] (NOXXE share) approximately 1.4 MMbbl oil, 0.3 Bcf gas

• A wa iti ng na fi l d ra ft o f C ompany greemen A t t o complete deal

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• Current production approximately 75 -100 bopd

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• Working to bring on gas production from Dickinson and North Dyersdale fields

• Preliminary planning for end year “ Attic Oil ” drilling

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NW Alice (EMR 35% WI)

• anticline structure containing 100[+] Bcf Gas and 2.5[+] MMbbl Oil

• 2007 gas/condensate discovery - RJ Hunter Well (EMR10% WI)  35% WI in 4500 lease acres on structure, full 3D seismic coverage  Several drilling locations from 3D targeting 2 Yegua sand intervals Expectation NW Alice Well @ 100% WI (unrisked)[(2.)]

• Initial production: 2 MMcfd + 60 bopd Gas/Oil recovery: 2.0 Bcf gas, 60,000 Bbl oil Well cost to p roduction: $US2.5MM

* assumes one sand only – targeting both sands in each well, double if both present

• Final closure with Noble expected by end May

• Pl an o r t d ill fi rs we t ll w ith OSO i n ugus A t @ EMR 35% WI

• 1000+ lease acres around RJ Hunter discovery well identified for EMR acquisition @100% WI

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Appalachian Gas Projects (75% EMR Interest)

Kentucky Energy Partners LLC

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1 gas project producing, several in progress 14 gas wells, 2000 lease acres

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1. Deliver Sweet Gas projects

• underwrite gathering infrastructure investment

• test shale gas potential with well recompletions

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2. Unlock Sour Gas potential

• Inexpensive lease acquisitions

• Cooperate to develop area gas infrastructure

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• 30 Mcfd from 22 Mile project

• complete Beetree gas gathering system Q3

• initial gas 500[+] Mcfd, 1MMcfd by end year  scoping large (5MMcfd?) sour gas opportunity

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 awaiting Buru plans to test Stokes Bay-1
 awaiting Buru plans to work over West Kora-1
 interpreting newly acquired expl seismic data
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Competent Person Statements

1. NOXXE reserves mentioned in this communication are summarised from Pearl Petroleum Engineering Consulting Services reports dated November and December 2008. These reports were prepared for DayStar Oil & Gas Corp by Nguyen B. Ngoc (B.S. and M.S. Petroleum Engineering from the University of Texas and Registered Professional Engineer in the State of Texas) and consent has been received to present the information from these reports.

2. NW Alice reserves and well recoveries mentioned in this communication are summarised from the report “Emerald Oil & Gas NL Estimated Future Reserves and Income as of July 1, 2009, Total P3 Reserves”, prepared by Ralph E. Davis Associates, Inc., an independent petroleum Engineering consultancy based in Houston, Texas and consent has been received to p resent the information from these re p orts.

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Contacts

• Office Address: Level 2, 16 Altona Street, West Perth WA 6005

• Phone:

• (+61 8) 9482 0510

• Fax:

• (+61 8) 9482 0505

• Web: www.emeraldoilandgas.com

• Email:

Mik e rzus – K M anag ng i Di rec or t mkrzus@emeraldoilandgas.com

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