EMERALD RESOURCES NL — Regulatory Filings 2007

Oct 4, 2007

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Level 2, 16 Altona Street West Perth WA 6005 Ph: +618 9482 0500 Fx: +618 9482 0505 Email: info@emeraldoilandgas.com www.emeraldoilandgas.com

5 October 2007

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

PALITO BLANCO GAS DISCOVERY UPDATE

Emerald Oil & Gas NL (“Emerald”) is pleased to provide an update on drilling at the Jaime Garcia gas unit #2 well at the Palito Blanco prospect located in Duval and Jim Wells Counties, Texas USA. A gas discovery has been confirmed within multiple sands of the Yegua formation between 7,300 and 8,100 feet.

PALITO BLANCO PROJECT DUVAL AND JIM WELLS COUNTIES, TEXAS

(Emerald earning 15% Working interest, Operator: Oso Exploration.)

Progress report at the Jaime Garcia Gas Unit #2 well as at 6.00pm 4 October 2007 (Texas time).

Current Depth: 8,250 feet (Total Depth) Current Activity: Successfully ran 4 ½ inch production casing to 8,240 feet and cemented in place. Released Pioneer Rig # 1.

The Y-21 sand test result (announced 3/10/07) was part of a larger planned testing program across this thick sand to establish a possible gas/water contact. The FIT tool became stuck in the hole therefore the balance of the test was aborted and the tool successfully recovered .The gas recovered indicates that there could be a gas–bearing zone at the top of the Y-21 sand overlying water. This will now be established by testing this sand through casing.

In addition to the above, wireline logs indicate that gas-bearing sands have been identified within the Y-20 sand (5 feet), the Y-19 sand (5 feet), the Y-18 sand(3 feet), the Y-15 sand (24

feet) and the Y-14 sand (4 feet). The cumulative total of possible gas- bearing sands (including Y- 21) is approaching 50 feet.

In addition, the upper part of this well between 5,000 & 6,300 feet has gas-bearing sands within the Frio, the Jackson and the Hockley formations. A total of some 30+ feet of gas-bearing zones have been identified from 5 sands. A separate shallow development well might be drilled at a later date to establish production from these shallow intervals.

Emerald Interest:

Emerald is earning a 15% working interest in this prospect.

About Palito Blanco Prospect: Palito Blanco Prospect is located in the South Texas Basin within Duval and Jim Wells Counties some 120 miles south of San Antonio. It is located within the prolific Yegua multiple-sand, gas-producing fairway within Braman, Four Seasons and Palito Blanco fault – separated fields, which to date have produced 45+ BCF gas and 1.0+ million barrels of condensate. Some 400 acres are currently under lease within a larger AMI. The current 8,250 foot well has tested the Yegua formation multiple-sand package between 7,300 feet and 8,100 feet, the lowest of which was the Y-21 sand.

Structurally there appears to be room for 3-4 development wells around the original Jaime Garcia #1 well. Total potential resources are approximately 10 BCF gas and 100,000+ barrels of condensate. Further development potential might emerge from the larger AMI (area of mutual interest) with Oso Exploration.

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

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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.

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