Drilling Report

ALLIANCE RESOURCES PLC
23 July 1999


Alliance Resources PLC announces that the development of the Dalton and East
Millom Fields located in the East Irish Sea is ahead of schedule.  On April
23rd, the Company announced the successful completion of the first well
drilled in the development, the Dalton R1 well.

The Dalton R2 well has now been successfully re-entered and re-completed.  The
R2 well tested at a maximum flow rate of approximately 54 MMSCFD on a 120/64
inch choke at 772 psig flowing tubing pressure.  In the East Millom Field, the
Millom Q1 well has been successfully re-entered and re-completed.  The Q1 well
tested at a maximum flow rate of approximately 18 MMSCFD on a 68/64 inch choke
at 725 psig flowing tubing pressure.

The Dalton R1, R2 and Millom Q1 wells are in the process of being tied back to
the North Morecambe Bay Platform.  First production is anticipated in August
1999.

Enquiries:

Jak Keenan
Chairman and Managing Director
Telephone: [phone]