Offer Update

Sterling Energy PLC
20 February 2004


Sterling Energy plc
20 February 2004

Not for release, publication or distribution in, into or from the United States,
Canada, Australia or Japan.

                              Sterling Energy plc
              Compulsory acquisition of outstanding Fusion shares

On 10 December 2003 the board of Sterling announced that its offer for the whole
of the issued and to be issued share capital of Fusion Oil & Gas plc had become
unconditional in all respects.

As at 3.00 p.m. on 19 February 2004, Sterling either owned or had received valid
acceptances for the Offer in respect of an aggregate of 100,790,343 Fusion
Shares, representing approximately 98.18 per cent. of Fusion's issued ordinary
share capital.

Consequently, Sterling is today implementing the procedure under sections 428 to
430F of the Companies Act 1985, as amended, to acquire compulsorily all of the
outstanding Fusion Shares which it has not already acquired, contracted to
acquire or in respect of which it has not already received valid acceptances

The Offer will remain open for acceptance until further notice. Fusion
Shareholders who have not yet accepted the Offer are urged to do so as soon as
possible.

Forms of Acceptance not yet returned should be completed and returned in
accordance with the instructions set out in the Offer Document and the Form of
Acceptance as soon as possible. Additional Forms of Acceptance may be obtained
from Capita IRG, telephone [phone], or if calling from outside the UK +44
20 8639 2157.

Words and expressions defined in the offer document from Sterling to Fusion
Shareholders dated 1 October 2003 and the circulars from Sterling to Fusion
Shareholders dated 18 October 2003 and 21 November 2003 respectively shall have
the same meaning in this announcement.

Evolution Beeson Gregory, which is regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Sterling and no one else
in connection with the Offer and other matters described herein will not be
responsible to anyone other than Sterling for providing the protections afforded
to customers of Evolution Beeson Gregory or for giving advice in relation to the
Offer or any other matter described in this announcement.



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