EMERALD RESOURCES NL — Proxy Solicitation & Information Statement 2010

Aug 11, 2010

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EMERALD OIL & GAS NL ACN 009 795 046

NOTICE OF GENERAL MEETING

AND

EXPLANATORY MEMORANDUM

IMPORTANT INFORMATION This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay.

If you wish to discuss any aspects of this document with the Company contact Mr Morgan Barron on telephone (08) 9482 0510

TABLE OF CONTENTS

A NOTICE OF MEETING B EXPLANATORY MEMORANDUM C PROXY FORM

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NOTICE OF GENERAL MEETING

EMERALD OIL & GAS NL ACN 009 795 046

Notice is hereby given that a General Meeting of members of the Company will be held at 8 am on 10 September 2010 at 52 Ord Street, West Perth, Western Australia 6005 to consider the following items of business and, if thought fit, to pass the following Resolution:

1. RESOLUTION 1 – ISSUE OF SHARES AND OPTIONS

To consider, and if thought fit to pass the following resolution as an ordinary resolution:

• “That approval be and is hereby given for the allotment and issue by the Company of:

• (a) Up to 40 million Shares and 20 million Options to nominees of RM Capital Pty Ltd; and

• (b) 10,000,000 Options to Ochre Management Pty Limited or its nominee(s).

on the terms and conditions set out in the Explanatory Memorandum.”

DATED this 11 day of August 2010

BY ORDER OF THE BOARD

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______ M Barron Company Secretary

Notes:

Definitions

Terms which are used in this Notice which are defined in Section 2 of the Explanatory Memorandum have the meanings ascribed to them therein.

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Voting Entitlement

Emerald Oil & Gas NL (as convenor of the Meeting) has determined that a person’s entitlement to vote at the Meeting will, in accordance with Section 1109N of the Corporations Act, be the entitlement of that person set out in the register of members as at 7 pm Sydney time on 8[th] September 2010.

This means that any holder registered at 7 pm Sydney time on the 8[th] day of September 2010 is entitled to attend and vote at the Meeting.

Proxies

A member entitled to attend this Meeting and vote is entitled to appoint a proxy to attend and vote for the member at the Meeting. A proxy need not be a member. If the member is entitled to cast 2 or more votes at the Meeting the member may appoint 2 proxies. If a member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes each proxy may exercise, each proxy may exercise half of the votes. A form of proxy is attached with this notice.

In accordance with section 250BA of the Corporations Act, the Company specifies the following information for the purposes of receipt of proxy appointments. To vote by proxy, please complete and sign the proxy form enclosed with this Notice as soon as possible and either:

• Return the proxy form (by post or delivery) to Emerald Oil & Gas NL, Suite 2, 12 Parliament Place, West Perth, Western Australia, 6005; or

• Send the proxy form to Emerald Oil & Gas NL on facsimile number +61 8 9482 0505

To be effective a completed proxy form must be received by the Company by no later than 8 am (WST) on 8 September 2010.

Where the proxy form is executed under power of attorney, the power of attorney must be lodged in like manner as the proxy.

Voting Restrictions

1. In accordance with Listing Rules 7.3.8 and 14.11 the Company will disregard any votes cast on Resolution 1 by:

2. Ochre Management Pty Limited

3. A person who may participate in the proposed issue; and

4. A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed; and

5. Any associate of the above persons.

However, the Company need not disregard a vote cast on Resolution 1 if:

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• It is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• It is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides.

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EMERALD OIL & GAS NL ACN 009 795 046

EXPLANATORY MEMORANDUM

This Explanatory Memorandum forms part of a Notice convening a General Meeting of Shareholders of the Company to be held on the 10 of September 2010. This Explanatory Memorandum is to assist Shareholders in understanding the background to and the legal and other implications of the Notice and the reasons for the Resolution proposed. Terms used in this Explanatory Memorandum are defined in Section 2.

1. RESOLUTION 1 - ISSUE OF SHARES AND OPTIONS

1.1 Background to Resolution 1

As announced to ASX on 2 August 2010, the Company has entered into the Underwriting Agreement with RM Capital Pty Limited. Part of the Underwriting Agreement includes a placement arrangement whereby to the extent that the number of shortfall Shares that arise from the Entitlement Offer is less than 40 million Shares (and attaching 1 for 2 Options), the Company will issue to nominees of RM Capital such number of additional Shares and Options as ensures that a total of 40 million Shares and 20 million Options are issued to nominees of RM Capital Pty Limited.

Any shortfall Shares and Options that are issued to RM Capital in its capacity as underwriter to the Entitlement Offer will fall within the exemption in Exception 2 of Rule 7.2 of the Listing Rules. No Shareholder approval is required for the issue of these Shares and Options. Under the placement arrangement described above to the extent that the level of acceptances of the Entitlement Offer was such that the number of shortfall Shares is less than 40 million Shares then any additional Shares and Options that will be issued will require Shareholder approval as provided in Section 1.2. These are the Shares and Options the subject of paragraph (a) of Resolution 1.

In the extremely unlikely event that the Entitlement Offer was fully subscribed, i.e. that there was no shortfall, then the total number of securities to be issued pursuant to the placement arrangement described above would be the 40 million Shares and 20 million Options the subject of paragraph (a) of Resolution 1.

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As part of the arrangements in relation to the underwriting of the Entitlements Offer the Company agreed to issue to Ochre Management Pty Ltd 10 million Options for its role in procuring the underwriting of and managing the Entitlements Offer on the same terms as those offered pursuant to the Entitlement Offer. These are the Options the subject of paragraph (b) of Resolution 1.

1.2 Regulatory Requirements – Resolution 1

Listing Rules Chapter 7

Listing Rule 7.1 limits the capacity of the Company to issue securities without the approval of its Shareholders. In broad terms, that rule provides that a Company may not, within a 12 month period, issue securities equal to more than 15% of the total number of ordinary securities on issue at the beginning of the 12 month period unless the issue is approved by Shareholders or the issue otherwise comes within one of the exceptions to Listing Rule 7.1.

The Shares and Options the subject of Resolution 1 would exceed the 15% Rule.

Resolution 1 therefore is designed to fulfill the requirements of Listing Rule 7.1. Also if the issue of Options the subject of Resolution 1 is approved by Shareholders the Shares, when issued on exercise of those Options, will not be included within the 15% limitation contained in Listing Rule 7.1.

Listing Rule 7.3 contains requirements as to the contents of a Notice sent to Shareholders for the purposes of Listing Rule 7.1 and the following information is included in the Explanatory Memorandum for that purpose:

• (a) The maximum number of securities to be issued (if known) or the formula for calculating the number of securities to be issued to the person: the maximum number of Shares the subject of Resolution 1 is 40 million and the maximum number of Options is 30 million Options.

• (b) The date by which the entity will issue the securities: the Shares and Options the subject of Resolution 1 will be issued and allotted no later than three months after the date of the Meeting or such later date as permitted by any waiver granted by ASX and will be issued on the one date.

• (c) The issue price of the securities: The Shares are being issued at 2 cents each and the Options the subject of Resolution 1 will be issued for nil monetary consideration.

• (d) The names of the allottee: The allottees of the Shares and Options the subject of paragraph (a) will be as yet unspecified institutional and sophisticated investor clients of RM Capital, and the allottee of the 10

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million Options in paragraph (b) will be Ochre Management Pty Ltd or its nominee.

• (e) The terms of the securities: The Shares will rank equally with all existing Shares on issue. The terms and conditions of the Options the subject of Resolution 1 are set out in Section 1.3.

• (f) The intended use of the funds raised: The funds raised from the issue of the Shares will be used to assist in the payment of costs of the Entitlement Offer and to supplement working capital of the Company. No funds will be raised from the issue of the Options the subject of Resolution 1.

• (g) A voting exclusion statement: a voting exclusion statement is set out in the Notice of Meeting.

1.3 Terms of the Options

The terms and conditions of the Options to be issued pursuant to Resolution 1 are as follows:

• (a) Each Option, when exercised, entitles the holder to subscribe for and be allotted one Share in the capital of the Company;

• (b) Each Option is exercisable on or before 5.00 pm Perth time on 31 August 2012;

• (c) The Options can be exercised in whole or in part;

• (d) The exercise price of each Option is $0.05;

• (e) The Options may be transferred by the Optionholder.

• (f) The Optionholder will be permitted to participate in any new pro-rata issue of securities of the Company if it has exercised the Options prior to the relevant record date for any such issue and the Optionholder will be notified of any such issue in the manner required by the Listing Rules;

• (g) The Options do not confer on the holder any rights to participate in dividends until Shares are allocated pursuant to the exercise of the Options;

• (h) In the event of a reorganisation of the issued capital of the Company, the Options will be reorganised in accordance with the Listing Rules (if applicable) and in any case in a manner which will not result in any benefits being conferred on the Optionholder which are not conferred on Shareholders;

• (i) The number of Shares to be issued pursuant to the exercise of Options will be adjusted for bonus issues made prior to the exercise of the Options so that, upon exercise of the Options the number of Shares received by the Optionholder will include the number of bonus Shares that would have been issued if the Options

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had been exercised prior to the record date for the bonus issues. The exercise price of the Options shall not change as a result of any such bonus issue;

• (j) Application will be made for the Options to be granted quotation by ASX; and

• (k) Subject to paragraph (i) above the Options do not confer on the holder any right to a change in the exercise price of the Options or a change to the number of underlying securities over which the Options can be exercised.

2. INTERPRETATION

In this Explanatory Memorandum unless the context or subject matter otherwise requires:

“ASX” means ASX Limited ACN 008 624 691;

“Board” means the board of Directors from time to time;

“Company” and “Emerald” means Emerald Oil & Gas NL ACN 009 795 946;

“Entitlement Offer” means the non-renounceable entitlement offer announced by the Company on 2 August 2010;

“Existing Shares” means the 132,803,764 Shares on issue as at the date hereof;

“Explanatory Memorandum” means this explanatory memorandum;

“Listing Rules" means the listing rules of ASX:

“Meeting” means the general meeting of Shareholders convened by the Notice;

“Notice” means the notice convening the Meeting of which this Explanatory Memorandum forms part;

“Ochre Management” means Ochre Management Pty Ltd ACN 142 956 189;

“Option” means an option to subscribe for a Share;

“RM Capital” means RM Capital Pty Limited ACN 065 412 820;

“Share” means an ordinary fully paid share in the capital of the Company and “Shareholder” has a corresponding meaning;

“Underwriting Agreement” means an agreement dated 30 July 2010 between the Company and RM Capital.

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References in this Explanatory Memorandum to “Sections” and to “Parts” are to Sections and Parts of this Explanatory Memorandum.

To the extent that any agreements are summarised or paraphrased in this Explanatory Memorandum the purpose is solely to assist Shareholders in gaining a succinct summary of the terms thereof and nothing will affect the full legal terms of the agreements.

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EMERALD OIL & GAS NL ACN 009 795 046

GENERAL MEETING PROXY FORM

The Company Secretary Emerald Oil & Gas NL Suite 2 12 Parliament Place West Perth WA 6005

Fax Number: +61 8 9482 0505

APPOINTMENT OF PROXY

I/We

being a Member of Emerald Oil & Gas NL entitled to attend and vote at the Meeting, hereby

Appoint

Name of proxy

or failing the person so named or, if no person is named, the Chair of the Meeting, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the General Meeting to be held at 52 Ord Street, West Perth, Western Australia on 10 September 2010 at 8 am (WST) and at any adjournment thereof.

If the Chair of the Meeting is your nominated proxy, or may be appointed � by default, and you do not wish to direct your proxy how to vote in respect of a Resolution, please place a mark in the box.

By marking this box, you acknowledge that the Chair of the Meeting may exercise your proxy even if he has an interest in the outcome of the Resolution and votes cast by him, other than as proxy holder, will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair of the Meeting will not cast your votes on the Resolution and your votes will not be counted in computing the required majority if a poll is called on the Resolution. The Chair of the Meeting intends to vote all undirected proxies in favour of the Resolution.

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Voting on Business of the Meeting

FOR AGAINST ABSTAIN Resolution 1 – Issue of Shares and Options □ □ □

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

%

Signed this day of 2010

By:

Individuals and joint holders

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Individuals and joint holders Companies (affix common seal if
appropriate)
Signature Director
Signature Director/Company Secretary
Signature Sole Director and Sole Company Secretary
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Instructions for Completing ‘Appointment of Proxy’ Form

1. A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.

2. A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sign.

3. Corporate shareholders should comply with the execution requirements set out on the Proxy Form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

4. 2 directors of the company;

5. a director and a company secretary of the company; or

6. for a proprietary company that has a sole director who is also the sole company secretary – that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

1. Completion of a Proxy Form will not prevent individual shareholders from attending the meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the meeting in person, then the proxy’s authority to speak and vote for that shareholder is suspended while the shareholder is present at the meeting.

2. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.

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