EMERALD RESOURCES NL — Capital/Financing Update 2007

Sep 19, 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\

20 September 2007

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

Dear Sirs

RE: EP 104/R1 CANNING BASIN, WESTERN AUSTRALIA – UPDATE ON THE VALENTINE-1 WELL

Please find attached a release providing details of the progress of the drilling of the Valentine-1 exploration well, Canning Basin, Western Australia as of 0600 am 20 September 2007.

Regards

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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

VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

Date:Permit:Well Location:Directional offset to target:Elevation:Prognosed Depths(measured KB):Prognosed drilling time:Spud Date:Present Depth:	20 September 2007R1Lat : 17o08’ 23.46”SLong: 123o42’ 32.40”E0 metresGround Level is 12.4mAMSLRotaryTable is 18.1mAMSLTop primary objectiveTotal depth3,222 metres3,407 metres25 days1230 hrs,WST 12 August 20073,241mMD
Time of Reporting:	0600 hrs,WST 20 September 2007
Operations Since LastReport:	Directionally drilled to 3241m. Changed the drill bit and reconfiguredthe directional assembly and now preparing to recommence drillingahead
Current Operations:	DrillingAhead
Hydrocarbon indications:	None
Comment:	Lithologies presently being drilled are predominantly tight limestonesand minor claystones of probable Devonian age with minor mud gasshows observed. The target Virgin Hills Formation clastic section hasyet to be intersected.Correlation of the new Valentine 1 stratigraphy with Puratte 1; themost equivalent well (50 kms away); indicates that the top of theVirgin Hills clastic objective is now prognosed slightly deeper atapproximately 3315m MD. This change in prognosed depth is notstructurally significant and reflects the uncertainty of prediction ofstratigraphyand depths in an underexplored basin.
Participants in the well(post earning):	Empire Oil and Gas NL - 14.8%ARC Energy Limited - 38.95% (Operator)Emerald Oil & Gas NL - 12.75%Pancontinental Oil & Gas NL - 10.0%Phoenix Resources PLC - 10.0%First Australian Resources Limited - 8.0%Indigo Oil PtyLtd - 5.5%

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