Emerald Bay Energy Begins CBM Program in Alberta

Emerald Bay Energy has commenced its drilling program for a new Coal Bed Methane well located in Clive, Alberta.

As part of its near-term plan to shift its focus farther west and explore for shallow natural gas, Emerald Bay will concentrate its exploration efforts in South Central Alberta.

Shelby Beattie, President of Emerald Bay said "We look forward to the continuation of our 8 well pilot program."

South Central Alberta -- Clive, Alberta. Emerald Bay has successfully cased and cemented its first Coal Bed Methane well in the Horseshoe Canyon Coal Field. The Company is very optimistic about the CBM potential on its acreage and this well sets up 7 additional locations to be followed up this quarter. Emerald Bay will be the operator of this 8 well CBM project incorporating an exciting drilling methodology.

The Company also owns a substantial working interest in a nearby section of Crown Land. The geophysical work has been completed with the analysis of one line of seismic showing a fair seismic anomaly. Emerald will drill on this section in the 4th quarter of 2004, and will be the operator of this property. The target zones will be the Upper and Basal Belly River Sands.

Emerald Bay's geological, engineering and land team continue to evaluate other development and exploration prospects in Alberta and British Columbia.

Lateral Drainhole Drilling Tool (LDD) Technology Development -- The Company continues the development of its patented production optimization tool at their Research and Development facility in South East Calgary.

Emerald has retained computational fluid dynamics experts to conduct a study and determine improvements to the design of the LDD Tool as Emerald brings the tool closer to commercialization. Recent modifications to the design of the LDD Tool are now completed and the long-term ramification of these changes will be critical to the commercial success of this product. Emerald Bay will be implementing and testing these design changes in the near future. The study also confirmed that the LDD Tool will have significant positive impact on the flow of oil and gas from the wellbore and greatly enhances the Company's ability to develop a commercially viable product.