EMERALD RESOURCES NL — Regulatory Filings 2007

Oct 31, 2007

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EMPIRE OIL & GAS NL

ACN 55 063 613 730 SUITES 7 & 8 154 HAMPDEN ROAD NEDLANDS 6009 WESTERN AUSTRALIA TELEPHONE 61 8 6389 2687 FACSIMILE 61 8 9386 6812 EMAIL info@empireoil.com.au WEBSITE www.empireoil.com.au\

1 November 2007

ASX Limited Company Announcements Office Level 4 20 Bridge Street SYDNEY NSW 2000

Dear Sirs

RE: EP 104/R1 CANNING BASIN, WESTERN AUSTRALIA – WELL COMPLETION TO BE RUN IN THE STOKES BAY-1 WELL FOR TESTING

Upon 7” (178mm) casing being run and cemented in the Stokes Bay-1 well to a depth of 2585 metres, the well was then deepened from the previous 2755m by 22 metres to 2777 metres in the Nullara Formation limestones.

During this operation lack of all drilling fluids returns (lost circulation) continued and no cuttings were collected at the surface. While trying to control the lost circulation, the well has intermittently flowed into the well bore during flow checks. Flows into the wellbore have been recorded of up to 4 barrels of fluid per minute or 5760 barrels of fluid per day demonstrating very good reservoir characteristics.

Hydrocarbon Indications in the Nullara

While controlling the well and circulating the well bore, a gas peak of 3816 units was recorded (being mud gas peaks of up to 10%). This gas is interpreted to be very dry being 97% methane and coming from the Nullara limestones.

Completion and Testing

The EP 104/R1 Joint Venture has elected to complete the well by running production tubing and a surface completion to enable production tests of the Nullara limestones. The two shallower Anderson Formation sands with shows can be also tested as a separate operation.

The Current Operation is to complete the well during the next two days and undertake a clean-up flow and then commence testing operations.

Empire’s Interest in the Nullara Formation, Stokes Bay-1

Empire retains the right under the EP 104/R1 Joint Operating Agreement to its 14.8% in this Nullara Formation by “backing in” and paying the penalty out of production. The Company considers that if the Nullara is gas charged (with the potential for an oil leg) any penalty will pay out very quickly at production stage should hydrocarbons be present and in commercial quantities. Upon Empire “backing in”, it will retain its 14.8% equity.

Nullara Formation Potential

If Stokes Bay is successfully tested, then Empire interprets this Nullara trend of hydrocarbons could extend 4.5 kms to the south east to Point Torment-1 (where the Nullara limestones flowed 134,000 cubic feet of gas per day with a trace of oil) and up to 7 kms to the north west where the Pinnacle Fault curves to the west. The trend is bounded to the south west by the Pinnacle Fault where the Nullara limestones dip steeply into the basin and were intersected in Valentine-1 some 650 metres deeper than in Stokes Bay-1. For the trap to be effective, the Nullara trend must also be stratigraphically trapped updip and to the north east by either tight limestones or lagunal shales.

The Company looks forward to the Stokes Bay-1 test results of the Nullara Formation where it is 80 metres high to the Nullara gas test at Point Torment-1. There is drilled to date a 40 to 45 metre intersection of the Nullara limestones in Stokes Bay-1. The areal closure could be up to 17km[2] . The presence of hydrocarbons and the extent of the reservoir parameters will be determined by the production test of the well.

Yours faithfully

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J L CRAIG MARSHALL BSc (Hons), F. Aus. IMM, CPGeo Managing Director Empire Oil & Gas NL Suite 7, 154 Hampden Road, Nedlands WA 6009 Telephone: 61 8 6389 2687 Facsimile: 61 8 9386 6812 Email: cmarshall@empireoil.com.au

STOKES BAY-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

Date:	1stNovember 2007
Permit:	R1
Well Location:	Lat : 17o08’ 23.46”S Long: 123o42’ 32.40”E
Directional offset to target:	1024 metres
Elevation:	Ground Level is 12.4mAMSL RotaryTable is 18.1mAMSL
Proposed Total Depth (measured KB):	2800 metres
Prognosed drilling time:	15 days
Spud Date:	0930 hrs,WST 3rdOctober 2007
Present Depth at 0600 hrs:	2777m MD
Time of Reporting:	0600 hrs,WST 1stNovember 2007
Operations Since Last Report:	Since last report on Thursday, October 25th, 178 mm (7 inch) casing has been run to a depth of 2585m measured depth (MD), and the well deepened a further 22 m from the previous 2755 m to 2777 m MD. In drilling the additional 22 m, further losses of mud at a rate of approximately 250 bbl/hr were experienced. This resulted in no fluid or cuttings returns to surface. In drilling the 22 m of additional hole, several metre-scale intervals of very high penetration rates were encountered, these being interpreted to be due to additional large scale vuggy porosity. Since reaching a total depth of 2777 m MD, efforts have focussed on curing the ongoing fluid losses in the Nullara Formation. This has resulted in intermittent establishment of circulation, and returns to surface with associated intermittent mud gas peaks of up to 10%. In view of the persistent ongoing losses that are now under control, and the accumulating evidence of gas presence in the Nullara, the Operator has recommended to the JV to complete the well (rather than the previously proposed open hole DST) in order to test this interval. The current plan is to complete the well during the next two days, and commence testing operations. As previously reported, all JV partners are participating in the

	shallow part of Stokes Bay-1 (above 2589 m MD). However, less than all parties have participated in the well below 2589 m MD such that equity levels in this part of the Stokes Bay-1 well (below 2589m MD) are: • ARC Energy Limited 69.25% (Operator) • Emerald Oil & Gas NL 12.75% • Pancontinental Oil & Gas NL 10.0% • First Australian Resources Limited 8.0% Under the Joint Venture Operating Agreement, the non- participating parties in the deeper part of the well (Empire, Phoenix and Indigo) retain a future right to earn back into their respective participating interests by the payment of penalties out of future production.
Current Operations:	POOH to run Completion
Hydrocarbon indications:	Mud gas readings of up to 10% have been recorded at surface from intermittent circulation during attempts to cure lost circulation
Comment:	The loss of mud to the Nullara Fm has continued to create operational difficulties that have delayed testing the interval. However, we remain very encouraged by the presence of both porosity and significant permeability in the Nullara limestone section, and the more recent intermittent gas shows when mud circulation is established are also viewed positively. The planned test of the Nullara Fm will determine fluid content and potential flow characteristics of the reservoir. The Stokes Bay-1 intersection of the Nullara Fm is 80m up dip of the Pt Torment-1 intersection which did not have the vugular porosity developed, but nevertheless tested gas at low rates.
Participants in the Permit (post earning):	ARC Energy Limited 38.95% (Operator) Empire Oil and Gas NL 14.80% Emerald Oil & Gas NL 12.75% Pancontinental Oil & Gas NL 10.00% Phoenix Resources PLC 10.00% First Australian Resources Limited 8.00% Indigo Oil Pty Ltd 5.50%