EMERALD RESOURCES NL — Regulatory Filings 2007

Jan 30, 2007

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

31 January 2007

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

QUARTERLY ACTIVITIES AND CASHFLOW REPORT

Emerald Oil & Gas is pleased to present its quarterly activities and cashflow reports for the quarter ended December 31, 2006, as attached.

Yours sincerely,

$\sqrt{8}-a$

JOHN HANNAFORD Director - Finance

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

31 January 2007

QUARTERLY ACTIVITIES REPORT FOR THE THREE MONTHS ENDED 31 DECEMBER 2006

Highlights

USA

• ↓ 15% interest secured in the Glamour Girl Prospect, Duval County, Texas during the quarter; potential reserves $20 - 40$ Bcf and $1 - 2$ MMB condensate; first well to be drilled in February 2007;
• → Emerald secured a 6.25% interest in the NW Alice Prospect, Jim Wells County, Texas, subsequent to the end of the quarter; potential reserves 100 Bcf gas and 2.5 MMB condensate; first well to be drilled in March 2007;
• * Pandura project, Webb County Texas (Emerald 15%), to be drilled in late February / March 2007;
• → 25% interest secured in the Steamboat Prospect, Jim Hogg County, Texas during the quarter; potential reserves 30 -100 Bcf gas; Consortium to farm out seismic survey prior to drilling in Q3 2007;
• Greenbush Project, North Dakota (Emerald 15%), 3D seismic program complete; interpretation nearing completion; well planned for March / April 2007;

Canning Basin, WA

↑ ARC Energy has become operator of EP104 JV, and plans to drill both Valentine and Stokes Bay prospects in Q2, 2007.

Overview

The board of Emerald Oil & Gas NL is pleased to present its quarterly activities report for the quarter ended 31 December 2006.

During and since the end of the December quarter Emerald has consolidated its South Texas focus with new project interests committed in the Glamour Girl, Steamboat and North West Alice projects.

Emerald management sees these new projects as a continuation of the Company's South Texas strategy, being to take modest but meaningful positions in projects in known producing areas that may quickly be brought to commercial development. All three projects represent potentially significant economic returns from multi-well developments. All three are operated by experienced local operators.

Figure 1. South Texas map showing approximate project locations.

The Company will continue to pursue new project opportunities in South Texas and onshore USA generally through its network and by acquisition to grow its reserve base, potential production and cash flow.

The first six months of 2007 will see a high level of activity with exploration wells planned at Glamour Girl, Pandura, North West Alice and Greenbush in the first quarter, followed by a two well drilling program at EP104 in the Canning Basin of Western Australia in the second quarter.

On the corporate front, the Company is progressing its small share parcel sale facility which will see the share register reduced from approximately 6.513 down to 1.492 shareholders, being a much more cost efficient and manageable register for a company of this size. The company will remit cheques to each of the 5.021 shareholders who partook in the scheme once the orderly sale of the 712,000 shares has been completed in February / March 2007.

USA Projects

Glamour Girl Project, Duval County, Texas.

(Emerald earning 15% Working Interest)

Emerald, through its US subsidiary Emerald Gas USA LLC, has agreed to participate in a 15% working interest in the Glamour Girl project, located in Duval County, Texas, as previously reported. The first well on the project will be an 8,000 foot well to test sands in the Cook Mountain and Queen City formations. It is located updip (approx 120 feet from seismic) from a well drilled in 1983 by ARCO which had strong gas shows in the Queen City sands and calculates "gas-bearing" from downhole logs. The well was drilled for deeper objectives and the Queen City sand tested non commercial production rates without fracture stimulation. The prospect covers approximately 2,000 acres.

The Glamour Girl prospect is a non-pipe test based on twinning the 1983 Arco Elizabeth Taylor No 1 well with excellent Queen City log pay, mud log shows and SWC parameters. The well is positioned on a 2,000 acre closure mapped on a giant structural nose trending

SW toward the Mestena Grande Field, Over 100 miles of 2-D seismic defines the structure and trap. Several offset locations are mapped for the productive Mestena Oueen City gas bearing sands.

A 23-foot Oueen City sand in the Arco Elizabeth Taylor has been identified as gas bearing with expected flow rates with fracture stimulation of 1.5 to 2.0 MMCFD and 30-60 BCPD. In 1983 the sand was perforated and flowed at non-commercial rates without fracture stimulation.

Potential reserves at the Glamour Girl Prospect vary from 20-40 BCF gas (depending on sand development and quality) and $1 - 2$ million barrels of condensate (light gravity, high quality oil).

The project will be operated by Anderson Oil Company, an experienced and competent, Houston based operator with 60+ years of operations. Emerald has committed to payment of 20% of the land, seismic and geology costs and 20% of the costs of the first well to casing point, to earn a 15% interest in the project. Upon success the project has the potential to move swiftly to a multi-well development with existing pipeline infrastructure traversing the project area.

Project Status: The first well is expected to be drilled in late February / March depending on rig availability.

North West Alice, Jim Wells County, Texas

(Emerald earning 6.25% Working Interest)

Emerald is pleased to announce that it has agreed to take a 6.25% working interest in the North West Alice gas/condensate project in South Texas. The North West Alice prospect consolidates Emerald's position in the prolific Frio/Wilcox sand trends of South Texas. The project was generated by San Antonio based OSO Exploration and the majority stake is held by Noble Energy, as Operator. Noble Energy is a NYSE guoted independent E&P company with a market capitalization of approximately US\$ 9 billion.

The Northwest Alice Prospect is located in central Jim Wells County and covers approximately five square miles in a NE-SW trend from three miles west to five miles north of the town of Alice, Texas.

Regional Geology:

This prospect is the northern extension of several significant Deep Yequa Gas Fields such as Ben Bolt, Braman, Starr Brite, Los Rubios and Four Sevens. These fields, in Jim Wells and Duval counties, have produced gas and condensate from all of the Yegua sands, but the two primary producing reservoirs are known locally as the Y-15 (Middle Yequa) and the Y-21 (Lower Yequa) sands. These sands are low-energy shelf deposits that have an average thickness of fifteen feet. These are blanket sands that exhibit lateral porosity and permeability variations.

Figure 2: Yegua Trend map in Duval and Jim Wells counties showing the North West Alice prospect area and adjacent historical production.

Prospect Geology:

This prospect is a NE-SW trending, faulted anticline defined by subsurface geology and three conventional seismic lines. The structure is bounded on the southwest by the Delta-Gulf No. 1 Kalinec and on the northeast by the J.H. Robison No. 1 Buegeler. The Delta-Gulf well was drilled and completed as a Y-15 gas producer in 1954 with an IP of 13,500 MCF and 20 bbls/MMCF with a SITP of 3,900 psi. It flowed gas and condensate for four months with a cumulative production of 57 MMCF and 1,390 barrels. There is no data available to determine if this well went to water, pressure depleted, or was simply abandoned because its Gas-Oil ratio was not commercial at that time.

Potential Reserves:

The reserve estimate for the Northwest Alice Prospect is 100 BCF gas and 2.5 million barrels of condensate. This was derived by using a structure size of 3,200 acres with an average of 41 net feet of pay per well with a recovery factor of 750 mcf/Ac.Ft. with a liquids yield of 25 bbls/MMcf.

Project Status: A leasehold position consisting of approximately 2,500 acres has been assembled over the prospect area. Three 2-D seismic lines have been acquired over the prospect area. The first well to 8,000 feet to test multiple Yequa sands is anticipated in March 2007. The Operator has advised that they intend conducting a 3D seismic survey over the prospect area following the first well.

Pandura Project, Webb County, Texas

(Emerald earning 15% Working Interest)

The Operator of the Pandura project, Daytona Energy Corporation has experienced delays with the finalization of funding for the Kathleen Marie #2 well. Subsequent to the end of the quarter Daytona appointed Mr Jim Breimayer as President and CEO, which Emerald anticipates will achieve a greater focus on progressing the exploration activities at Pandura. Mr Breimaver has advised that Daytona will soon be in a position to fund a larger interest in the project, enabling the drilling to proceed, which was estimated to be in late February / March 2007.

As previously reported the Kathleen Marie $#2$ well will test up to six potential gas-bearing sands within the Tertiary Wilcox formation, with the primary target the Lobo 6400 foot sand. Recent work by the Operator has highlighted significant potential in the secondary target Navarro sands at 8500 feet. Regional production from the Navarro sands, in particular on the Mexican side of the Rio Grande river, flowed at initial production rates of 5-8 MMcf/day of gas.

The Operator has upgraded the project's reserve potential on a 5 well development basis to approximately 23 Bcf of gas.

Further updates on the timing of drilling will be released as they come to hand.

Steamboat Prospect, Jim Hogg County, Texas.

(Emerald 25% Working Interest)

Emerald has reached agreement to take up a 25% interest in lease options covering 2,000 acres over the Steamboat Prospect in Jim Hogg County, Texas. The prospect has both shallow (Queen City at 8,500 feet) and deep (Wilcox at 13,000 feet) objectives with potential reserves of 30 Bcf gas and $50 - 100$ Bcf gas, respectively. The prospect has been mapped using 2-D and limited 3-D seismic however, additional 3-D seismic will need to be acquired and interpreted prior to it's drilling in late 2007 by a third party(ies). Leases are currently being optioned over this large-potential prospect. Drilling will be subject to participation funding and satisfactory option terms being achieved.

Geology

The Steamboat prospect is a seismically defined crestally faulted rollover structure lying east of the main Wilcox flexure. It is comprised of Queen City, Wilcox Hinnant and Cook Mountain objectives which should be tested with separate wells. An antithetic fault forms a trap for a Wilcox gas accumulation discovered and tested in the mid-1980's. This well tested 3.5 MMCFD without fracture stimulation from a Wilcox Hinnant sand below 12,000 feet. Seismic interpretation indicates the trapping fault for the Wilcox gas accumulation migrates east of the location and should form a similar antithetic trap in a section of welldeveloped Queen City and Cook Mountain sands. The Queen City sands in the original borehole have petrophysical shows, which were not tested near the pipe point near 8,000 feet. The original borehole is a potential re-entry candidate for the Wilcox Hinnant sands which have a blocky log character and may be a turbidite feeder channel facies, similar the prolific Travis Ward sands.

Project Status: Leasing under way to be followed by farmout of seismic survey then drilling.

Greenbush Project, Ward & Renville Counties, North Dakota

(Emerald 15% Working Interest)

The Operator, Golden Eye Resources LLC has reported that the Greenbush 3-D seismic survey (acquisition phase) was completed in late November, 2006. The data has been processed and interpretation is nearing completion.

Project Status: The Operator believes that it will be able to recommend a number of new drilling locations based on the 3-D data by mid February 2007, with a well planned for March / April 2007, weather permitting.

Progresso Project, Hidalgo County, Texas

(Emerald earning 30%)

Emerald's subsidiary Emerald Gas USA LLC, is earning a 30% working interest in the Progresso gas exploration project located in Hidalgo County Texas. No work was undertaken during the quarter. The Company is working with the Operator Daytona Energy Corporation to progress this project through purchase of new data and further leasing so that it can be drill ready as soon as possible.

Project Status: Awaiting leasing and data acquisition, drilling delayed until at least the third quarter of 2007.

Sharon North Project, Jasper County, Mississippi

Upon a review of the economics of the Sharon North project and in view of the higher cost drilling environment and lack of suitable rigs, Emerald has advised the Operator Daytona Energy Corporation that it wishes to withdraw from the Sharon North project with immediate effect. Management is of the view that current projects being sourced offer higher levels of prospectivity and return for the Company.

New Projects - USA

The Company continues to review and assess several new oil and gas exploration project opportunities in the USA which have been sourced through managements existing industry network.

Australian projects

EP104, Canning Basin WA

(Emerald earning 18.75% Working Interest)

Emerald is pleased to announce that following a change in operatorship of the EP104 Joint Venture, the new Operator, ARC Energy plans to drill the Stokes Bay and Valentine prospects deviated from the same location in Q2 2007.

Canning Basin showing Emerald's EP104 / R1 and EPA 4/05-6 interests, and Figure 3: mapped prospects and leads.

It is estimated that the Stokes Bay prospect could hold up to 10 MMBO and 80 Bcf of gas. The deeper Valentine Prospect is estimated to hold more than 1 Tcf of gas. Emerald will earn its 18.75% interest in the permit through participation in the Stokes Bay #1 well, prior to drilling the Valentine prospect.

Project Status: ARC Energy plans to drill two wells at EP104 as part of a multi well Canning Basin program with its Century 18 rig, commencing in April 2007.

EPA 4/05-6 Canning Basin, WA

(Emerald 100% Working Interest)

Emerald's mapping of leads and prospects on EPA 4/05-6 both along and near the Pinnacle Fault has identified several large structures that may host significant accumulations of hydrocarbons, some several times larger than the Stokes Bay prospect, as shown above in Figure 6.

Project Status: The Company has commenced the Native Title Right to Negotiate process.

Corporate

At 31 December 2006 the consolidated entity had \$2.74 million cash on hand.

The Company continues to progress the small share parcel sale facility resulting in a much reduced share register from 6,513 down to 1,492 shareholders, being a much more cost efficient and manageable register for a company of this size. The company will remit cheques to each of the 5,021 shareholders who partook in the scheme once the orderly sale of the 712,000 shares has been completed in February / March 2007.

The Company made the following announcements during the quarter and up to the date of this quarterly report.

18-01-07	EGM Results
15-01-07	Appendix 3B
18-12-06	Notice of General Meeting
13-12-06	Response to ASX Query re Price & Volume
08-12-06	Appendix 3B
05-12-06	Appendix 3B
28-11-06	AGM Presentation
28-11-06	Results of AGM
28-11-06	Projects Update
17-11-06	Partly Paid Shares cancellation notice
14-11-06	ARQ's ann: Acquisition of Additional Canning Basin Areas
14-11-06	EGO's ann: Completes Farmout of EP104/R1 and L98-1
13-11-06	PCL's ann: EP104 Update
$31 - 10 - 06$	First Quarter Activities & Cashflow Reports
25-10-06	Notice of Annual General Meeting
25-10-06	Annual Report 2006
24-10-06	Partly Paid Call Notice
20-10-06	Sale of Unmarketable Parcel of Shares
11-10-06	Appendix 3B
05-10-06	Change of Director's Interest Notice

For more information please contact:

Emerald Oil & Gas NL Tel: +618 9482 0510

JOHN HANNAFORD Director - Finance ihannaford@emeraldoilandgas.com

BOB BERVEN Director - Technical bberven@emeraldoilandgas.com

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 forward-looking 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.

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Emerald Oil and Gas NL

ABN

009 795 046

Quarter ended ("current quarter")

Year to date

$(6$ months)

31 December 2006

Current quarter

\$A'000

Consolidated statement of cash flows

Cash flows related to operating activities

					\$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) evaluation	exploration (b) development	and	(97)	(227)
		(c) production (d) administration		(264)	(493)
1.3	Dividends received
1.4	Interest and other items of a similar nature received			33.	69
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows			(328)	(651)
	Cash flows related to investing activities
1.8	Payment for purchases of:	(a)prospects
		(b)equity
	investments
		other (c)	fixed
	assets
1.9	Proceeds from sale of:	(a)prospects (b)equity
	investments
		(c)other	fixed
	assets
1.10	Loans to other entities
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	Net investing cash flows
1.13	Total operating and	investing cash flows		(328)	(651)
	(carried forward)

⁺ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows (brought forward)	(328)	(651)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	$\overline{2}$	3
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other - Capital Raising Costs		(437)
1.20	Other - Corporate Fee		(110)
	Net financing cash flows	$\overline{2}$	(544)
	Net increase (decrease) in cash held	(326)	(1,195)
1.20	Cash at beginning of quarter/year to date	3,071	3.940
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	2.745	2,745

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter SA'000
1.23	Aggregate amount of payments to the parties included in item 1.2	60
1.24	Aggregate amount of loans to the parties included in item 1.10	Nil

1.25 Explanation necessary for an understanding of the transactions

The amount above represent payments to a company associated with John Hannaford. The payments relate to the provision of consulting fees, company secretarial services, accounting and bookkeeping, secretarial services and the provision office accommodation on commercial terms. Some of the payments relate to prior quarters.

Non-cash financing and investing activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
• N/A
• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

$N/A$

⁺ See chapter 19 for defined terms.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used SA'000
3.1	Loan facilities		$\overline{\phantom{a}}$
3.2	Credit standby arrangements		$\mathbf{u}$

Estimated cash outflows for next quarter

	Total	775
4.2	Development	an.
4.1	Exploration and evaluation	775
		\$A'000

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter \$A'000	Previous quarter SA 000
5.1	Cash on hand and at bank	2,745	3,070
5.2	Deposits at call
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	2,745	3,070

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	n/a	n/a	n/a	n/a
6.2	Interests in mining tenements acquired or increased	n/a	n/a	n/a	n/a

⁺ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	price Issue per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1	Preference $^+$ securities (description)
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions
7.3	+Ordinary securities	45,612,549	33, 173, 247
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	5,872	5,872	20 cents	20 cents
7.5	+ Convertible debt securities (description)
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7	Options (description and conversion factor)	27,237,451 367,577 4,000,000 4,000,000 1,500,000 325,000	27,237,451	Exercise price 20 cents 17.68 cents 25 cents 30 cents 25 cents 25 cents	Exercise date 31/05/08 23/01/11 31/12/08 31/12/09 28/02/10 31/12/09
7.8	Issued during quarter
7.9	Exercised during quarter	5,872	5,872	Exercise price 20 cents	Exercise date 31/05/08
7.10	Expired during quarter
7.11	Debentures (totals only)
7.12	Unsecured notes (totals only)

⁺ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does /does not* (delete one) give a true and fair view of the matters disclosed.

Sign here:

(Director/Company secretary)

Date: 31 January 2007

Print name: John Hannaford

Notes

• The quarterly report provides a basis for informing the market how the entity's $\mathbf{I}$ activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• The definitions in, and provisions of, AASB 1022: Accounting for Extractive 4 Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

men men men men

⁺ See chapter 19 for defined terms.