EMERALD RESOURCES NL — Regulatory Filings 2007

Oct 31, 2007

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Level 2, 16 Altona Street West Perth WA 6005 Ph: 08 9482 0500 Fax: 08 9482 0505 Email: info@emeraldoilandgas.com www.emeraldoilandgas.com

1 November 2007

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

EXPLORATION WELL UPDATE - EP 104/R1 CANNING BASIN, WESTERN AUSTRALIA – THE STOKES BAY-1 WELL

Emerald Oil & Gas NL (ASX: EMR) wishes to advise that the EP 104/R1 Joint Venture has elected to run 2 7/8 inch (73mm) tubing to the new total depth of 2,777 meters and complete the well as a potential gas producer from the Nullara “reefal” carbonates. Since the last report on 25 October, 178 mm (7 inch) casing has been run to a depth of 2,585m measured depth (MD), and the well deepened a further 22 m from the previous 2,755 m to 2,777 m MD.

In drilling the additional 22 metres, 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 metres of additional hole, several meter-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 2,777 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 undertake a clean-up flow prior to moving the rig to Arc’s next exploration well.

The loss of mud to the Nullara Formation has continued to create operational difficulties that have delayed testing the interval. However, the Operator, Arc Energy is very encouraged by the presence of both porosity and significant permeability in the Nullara reef section, and the more recent intermittent gas shows when mud circulation is established are also viewed positively.

The planned test of the Nullara Formation will determine fluid content and potential flow characteristics of the reservoir. The Stokes Bay-1 intersection of the Nullara Fm is 80 metres structurally up-dip of the Pt Torment-1 intersection which did not have the vugular porosity developed, but nevertheless tested gas at low rates. The Nullara is hydrocarbon bearing at the Blina Oilfield, located along the Pinnacle Fault trend 100 kms south east.

Emerald has contributed its 12.75% interest in this completion exercise.

Please find attached technical update from the Operator.

For more information please contact:

Emerald Oil & Gas NL

Tel: +618 9482 0510 www.emeraldoilandgas.com info@emeraldoilandgas.com

JOHN HANNAFORD Executive Director – Finance jhannaford@emeraldoilandgas.com

BOB BERVEN Executive Director – Technical bberven@emeraldoilandgas.com

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 Rotary Table 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 meter-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 undertake a clean-up flow prior to moving the rig to the next exploration well. 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 the well 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 reef 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%

- Canning Basin Stokes Bay 1

General Well Data

Spud Date: 09:30hrs 3[rd] October 2007 KO from 975mMD

DATE : 01 Nov 2007

Planned TD : 2500mMD / 2130m TVDSS

Drill Floor Elevation : 18.1m amsl

Actual TD : 2777mMD / 2323m TVDSS

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Canning Basin Stokes Bay-01
(Exploration Well from KO) Predicted Progress Stokes Bay 1
Actual Progress Stokes Bay 1
Blina
Liveringa
0 Noonkanbah
Poole
Carolyn
Winifred
200 Betty FmAnderson Fm
Rig 18 released from Valentine-1 at 18:00hrs Fairfiled Gp
Clanmeyer
30th September 2007 for Stokes Bay - 1 Virgin Hills
400 Predicted Progress Valentine 1
600
9 5/8" @808mMD
in Valentine 1
800
KO Stokes Bay-1 ftom 975mMD at 09:30hrs 03/10/07
1000
1200 4/10/07 Drilling 8 1/2" at 1226m
1400 5/10/07 Drilling 8 1/2" at 1439m
5/10/07 Drilling 8 1/2" at 1439m
1600 6/10/07 Drilling 8 1/2" at 1652m
7/10/07 Drilling 8 1/2" at 1819m
1800 8/10/07 Drilling 8 1/2" at 1840m Stuck pipe @ 858 while POOH for bit change
9/10/07 Work stuck pipe. 10/10/07 POOH w/Fish 11/10/07 RIH w/new BHA to drill
12/10/07 POOH @ 1913m after total MWD failure
2000
13/10/07 Drilling 8 1/2" at 2013m
2200
14/10/07 Drilling 8 1/2" at 2255m
2400
15/10/07 Drilling 8 1/2" at 2485m .
2600 16/10/07 Drilling 8 1/2" at 2606m
17-30/10/07 control Lost Circ, run Logs , Run & Cmt 7” csg,
2800 .
29/10-01/11/07 drill shoe track,
. Set X-Link Plugs & control losses,
prepare completion assembly.
3000
0 5 10 15 20 25 30 35 40
Days
Depth (Measured below Rotary Table in metres)
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About Emerald Oil & Gas NL

Emerald Oil & Gas NL (ASX: EMR; EMRO) was listed on the ASX in June 2006, raising $4 million. Emerald is an oil and gas exploration and production company with project interests in North Dakota and Texas in the USA and in the Canning Basin of Western Australia. Emerald’s focus is on conventional reservoir targets for oil and gas prospects and 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 low risk exploration projects that can be swiftly brought into production.

Information in this announcement 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 forwardlooking 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.