EMERALD RESOURCES NL — Regulatory Filings 2007

Aug 22, 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\

23 August 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 on the progress of the Empire Oil & Gas N.L. Canning Basin exploration programme with the drilling of the Valentine-1 exploration well.

Valentine Prospect Description

Valentine-1 is located 20 kilometres north of the township of Derby in north west Western Australia’s Kimberley Region.

Drilling of the Valentine-1 well as of 6.00 am on 23 August 2007 reached a depth of 1566 metres. The drilling of the section down to the Carboniferous aged, Base Betty Formation of the Grant Group (predicted at 1793 metres) is an interval where no hydrocarbons are anticipated.

The Primary Reservoir Objective is the Late Devonian aged Virgin Hills Formation. Valentine-1 is designed to intersect the interpreted Virgin Hills, sandstone and carbonates near the structural crest of the prospect predicted at 3,222 metres. The Valentine Prospect is a large lowside fault closure and extends over an area of some 66 square kilometres along the Pinnacle Fault System. Empire Oil & Gas N.L. has previously stated there is potential for a similar amount of recoverable gas to ARC Energy’s upside case of 1,091 billion cubic feet of gas. Empire’s recoverable gas reserves are estimated at 1200 billion cubic feet of gas. Empire has also previously stated there is potential for the Valentine structure to have entrapped up to 200 million barrels of recoverable oil if oil is present and the structure is filled to its spill point.

Secondary reservoir targets include the Carboniferous aged Anderson Formation prospective for both oil and gas.

Regards

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J L CRAIG MARSHALL Managing Director EMPIRE OIL & GAS N.L.

Page 1

VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA

Date:		23 August 2007
Permit:		R1
		Lat : 17o08’ 23.46”S
Well Location:		Long : 123o42’ 32.40”E
Directional offset totarget:		0 metres
		Ground Level is 12.4mAMSL
Elevation:		Rotary Table is 18.1mAMSL
Prognosed Depths		Top primary objectiveTotal depth
(measured KB):		3,222 metres3,407 metres
Prognosed drilling time:		25 days
Spud Date:		1230 hrs, WST 12 August 2007
Present Depth:		1566 mMD
Time of Reporting:		0600 hrs, WST 23 August 2007
Operations Since LastReport:		Drilled 12 1/4” hole to 812mMD. Set 9 5/8”casing at 808mMD. Drilled 81/2” hole to1566mMD
Current Operations:(at 0600hrs, 23 August)		Drilling ahead in 8 1/2” hole at 1566mMD.
Hydrocarbon indications:		N/A
		ARC Energy Limited - 38.95% (Operator)
		Empire Oil and Gas NL - 14.8%
Participants in the well		Emerald Oil & Gas NL - 12.75%
		Pancontinental Oil & Gas NL - 10.0%
(post earning):		Phoenix Resources PLC - 10.0%
		First Australian Resources Limited - 8.0%
		Indigo Oil PtyLtd - 5.5%
Comment:		N/A

Page 2

- Canning Basin Valentine 1

Spud Date: 12:30hrs 12[th] August 2007

General Well Data

DATE : 23/08/2007

Planned TD : 3407.5mMD / 3300m TVSS Drill Floor Elevation : 18.1m amsl

Summary @06:00hrs WST

Drilling 8 1/2” hole at 1566m.

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----- Start of picture text ----- Canning Basin Valentine-01(Exploration Well from Spud) Predicted ProgressActual ProgressBli0 13 3/8"@112mMD2004006009 5/8"@808mMD8001000 20/08/071200Change drill bit at 1511m140021/08/0722/08/07 23/08/0716001800200022002400260028003000 Valentine-1Primary Target"Virgin Hills Formation"3200Expected TD 3402.5mMD 3300mTVSSLog & Evaluate34000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26DaysDepth (Measured below Rotary Table in metres)----- End of picture text -----