EMERALD RESOURCES NL — Capital/Financing Update 2007

Aug 27, 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

28 August 2007

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

PALITO BLANCO WELL SPUDS

Emerald Oil & Gas NL (“Emerald”) is pleased to announce the spudding of the Jaime Garcia gas unit #2 well at the Palito Blanco project located in Duval and Jim Wells Counties, Texas USA.

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 6.00 am 27 August 2007 (Texas time).

Current Depth: 905 feet. Well spudded at 7pm on 26 August 2007.

Current Activity: Drilling 14¾” surface hole and preparing to run 10¾” casing at 2,000 feet. Drilling ahead towards primary objective.

The primary target Yegua 14 sand is anticipated at 7,350 feet. Secondary target Yegua 15 and 21 sands anticipated between 7,600 and 8,200 feet. Proposed total depth is 8,250 feet.

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 will test the Yegua formation multiple-sand package the lowest of which is the Y-21 sand.

Structurally there appears to be room for 3-4 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

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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