Final Results

Fusion Oil & Gas PLC
17 September 2002
 
                           Fusion Oil & Gas plc

                      ('Fusion' or 'the Company')

        Preliminary Results for 1 July 2001 to 30 June 2002 (Unaudited)



Fusion Oil & Gas plc announces its unaudited results for the 2001/2002 financial
year (1 July 2001 to 30 June 2002).



                                  HIGHLIGHTS:



Exploration Operations



•      Chinguetti-4-2 step-out exploration well, offshore Mauritania was drilled
in August 2002 as an oil discovery, giving further confidence in the commercial
potential of the Chinguetti accumulation.



•      Production testing of Chinguetti-4-2 recorded a flow rate of 1,560
barrels of oil per day and 650 thousand standard cubic feet of gas constrained
by sand production. Sand inflow is a relatively common occurrence in
unconsolidated reservoirs with similar porosity and permeability
characteristics, and appropriately designed production wells should be capable
of achieving significantly higher flow rates.



•      The Chinguetti-4-3 exploration well on the Banda prospect, which is
located approximately 20 km to the east of the Chinguetti accumulation is
currently underway. It is anticipated that the Chinguetti-4-3 exploration well
will then be followed by an appraisal well on the Chinguetti accumulation
(Chinguetti-4-4).



•      Two further 3D seismic surveys were acquired in Mauritania and an
extensive 3D survey completed in the AGC Cheval Marin permit.



•      Two shallow-water 2D seismic surveys were completed in the Gabon Iris
Marin and Themis Marin permits.





Portfolio Expansion and Development



•      A farmout agreement with subsidiaries of Amerada Hess Corporation was
concluded in August 2002 whereby Fusion will be carried through accelerated
exploration programmes worth in the region of US$22 - US$34 million net to
Fusion's 20% retained interest in The Gambia, AGC (Croix du Sud) and Cameroon.



•      A Technical Cooperation Agreement (TCA) covering the offshore territory
of the Saharawi Arab Democratic Republic (Western Sahara) was signed in April
2002.



•      The second exploration license terms in Mauritania and The Gambia have
been entered.



Corporate Activity



•      Fusion today announces that it has entered into arrangements to place up
to 4.5 million new shares at 45p per share with institutional investors to raise
up to  £1.9 million (net of expenses) for working capital ('the placing').  A
separate Stock Exchange announcement is made today concerning the placing.





Financial Performance



•      At 30 June 2002, £4.5 million cash in bank.



•      Basic loss per share of 0.99 pence.



•      Pre-tax loss £920,000, in line with expected exploration programme costs.



•      Exploration expenditure for the year of £4.0 million.





Alan Stein, Managing Director of Fusion commented:



'Our long held confidence in the prospectivity of West Africa, and Northwest
Africa in particular, has been rewarded with yet further success offshore
Mauritania.  It is gratifying to note this confidence is shared by Amerada Hess,
who have been one of the most successful explorers in West Africa in recent
years.  The farmout deal with Amerada Hess and continued success in Mauritania
provide an opportunity to deliver growth in shareholder value'



                                                               17 September 2002



There will be a presentation to analysts at 11.00am British Summer Time today at
College Hill Associates, 78 Cannon Street, London EC4N 6HH.


ENQUIRIES:

Fusion Oil & Gas plc             Tel today:         020 7457 2020

Alan Stein, Managing Director    Tel thereafter:    [phone]
                                 Fax:               [phone]
                                 e-mail:            [e-mail]

College Hill Associates          Tel:               020 7457 2020

78 Cannon Street                 Fax:               020 7248 3295
London EC4N 6HH
Peter Rigby                      e-mail:            [e-mail]
James Henderson                  e-mail:            [e-mail]



The financial information set out in this announcement does not constitute the
Company's statutory accounts for the year ended 30 June 2002 or 2001. The
financial information for the year ended 30 June 2001 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies.  The auditors reported on those accounts; their report was
unqualified and did not contain a statement under s237 (2) or (3) Companies Act
1985.  The statutory accounts for the year ended 30 June 2002 will be finalised
on the basis of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the companies annual general meeting.





CHAIRMAN'S STATEMENT



It gives me great pleasure to report on the progress of your company for the 12
month period to June 30 2002.  In the course of our second year in the public
domain we have enjoyed several milestone achievements with significant bearing
on the value of the company.  In particular we have;



•      Enjoyed exploration drilling success offshore Mauritania.



•      Obtained exploration funding for our primary deepwater assets by way of
farmout to Amerada Hess.



•      Acquired new deepwater exploration interests offshore Western Sahara.



In Mauritania, following the Chinguetti-1 discovery in 2001, the Joint Venture
of which Fusion is part was sufficiently encouraged to acquire two new 3D
seismic surveys and to commit to further drilling activity during 2002.  The
first well of a three well programme, Chinguetti-4-2, was announced as an oil
discovery on the 19th August 2002.  The first production test of the
Chinguetti-4-2 well flowed oil at a rate of 1,560 barrels per day and 650
thousand cubic feet of gas per day, constrained by sand inflow. Sand inflow from
unconsolidated reservoirs with these porosity and permeability characteristics
is a relatively common occurrence worldwide and appropriately designed and
completed production wells should be capable of achieving significantly higher
flow rates.



This result further strengthens our confidence in the commercial potential of
this asset and the petroleum prospectivity on Northwest Africa in general.
Further drilling is currently underway and results from the remaining programme
are eagerly awaited.



Our longstanding efforts with regard to our operated deepwater assets in The
Gambia, AGC (Senegal/Guinea Bissau) and Cameroon have been rewarded through the
successful farmout of these interests to Amerada Hess, one of the most
successful exploration companies in West Africa in recent years.  The
participation of Amerada Hess serves as testament to the prospectivity of these
exciting projects, which have the potential to deliver more upside to the
company than Mauritania. Amerada Hess has demonstrated, through a run of
exploration success in Equatorial Guinea, the necessary skill and determination
to pursue play types analogous to those found in the Fusion acreage.  We look
forward to a rewarding association with Amerada Hess over the years to come.



Fusion's interests in two shallow water blocks offshore Gabon also received
considerable technical effort over the year and are developing into highly
attractive assets. Operationally challenging 2D seismic surveys were conducted
at the beginning of 2002 and yielded high quality data that has revealed several
robust prospects and leads. A series of significant discoveries in the Olowi
Marin license, which lies in between our Iris Marin and Themis Marin licences,
has drawn industry attention to the area.  It is anticipated that this activity
and interest, in conjunction with the encouragement provided by the new data,
will give the Fusion operated joint ventures flexibility in determining an
appropriate strategy to finance a fast-track exploration programme.




In addition to adding value to existing assets, active pursuit of new ventures
is necessary to maintain momentum in building shareholder value.  It was with
particular pleasure that we were able to report in May, after several years of
discussions, the signing of a Technical Cooperation Agreement with the
Government of the Saharawi Arab Democratic Republic ('SADR'), also known as
Western Sahara. Through this agreement Fusion will assemble and interpret data
on the offshore area of Western Sahara, immediately north of Mauritania, and
upon completion of a detailed prospectivity report Fusion will have the right to
license up to three offshore exploration blocks, contingent upon the SADR
gaining admission to the United Nations.  The sovereignty of Western Sahara is
currently the subject of a dispute which is being mediated by the United
Nations.  The timing and certainty of any such licence awards is therefore
indeterminate at present, however this agreement affords your company the
opportunity to deploy its regional skill and expertise in the evaluation of a
huge, virtually unexplored area, and potentially establish another core
deepwater licence area within the emerging Northwest African petroleum province.



The Company has today entered into arrangements to place up to 4.5 million new
shares at 45p per share with institutional investors on a non-underwritten basis
to raise £1.9 million (net of expenses) in additional working capital. A
separate Stock Exchange announcement is made today concerning the placing.



At the financial year end (30 June 2002) the Group recorded a loss on ordinary
activities after taxation of £920,349 or 0.99 pence per Ordinary share. The loss
includes the write off of new venture exploration costs of £107,000. At the end
of the reporting period the Company had funds available of approximately £4.3
million.



Thanks to the unstinting efforts of your management and staff, great progress
has been made.  With continued success in Mauritania, the prospect of a
sustained deepwater exploration programme elsewhere funded by Amerada Hess and
the continued development of our new ventures strategy, the Company is well
placed to deliver growth in shareholder value.



Your continued support is greatly appreciated.


Peter Dolan
Chairman                     17 September 2002








OPERATIONAL HIGHLIGHTS



Mauritania:              PSC A and PSC B (Production Sharing Contract)
                         Equity:                   PSC B   6%
                                                   PSC A   3%
                         Operator:                 Woodside



PSC A and PSC B are located offshore the Republic of Mauritania, Northwest
Africa, covering a total area of 18,569 square kilometres and extending from the
nearshore to water depths in excess of 2,000 metres. Woodside Energy Ltd
operates both licences on behalf of joint ventures that also include AGIP.



In the period 1998-2001 the respective joint ventures acquired an extensive 3D
and 2D seismic database over the permits, which led to drilling of the first two
exploration wells in this frontier deepwater province. The first of these wells,
Chinguetti-1, intersected several oil bearing sandstones in the Tertiary primary
objective over a 120 metre gross hydrocarbon column.



During 2001/2002 data from these initial wells was analysed, further 3D seismic
data was acquired and the joint venture commenced initial field development
planning studies. In July 2002 the PSC B Joint Venture commenced drilling
operations to determine commercial viability of the Chinguetti accumulation and
to further investigate the potential of the Tertiary interval within the
regional deepwater play system.



The first well in the 2002 drilling programme was the Chinguetti-4-2 step-out
exploration well, which encountered several oil-bearing sandstones within the
Tertiary primary objective over a gross hydrocarbon column of 94 metres. An
initial production test of an interval within the reservoir zone was conducted
and a maximum flow rate of 1,560 barrels of oil per day and 650 thousand
standard cubic feet of gas was recorded, constrained by sand production.  Sand
inflow from unconsolidated reservoirs with similar porosity and permeability
characteristics has been experienced in a number of significant oilfields
worldwide and should not hamper efficient production from the Chinguetti
accumulation. It is expected that significantly higher flow rates could be
achieved from appropriately designed production wells.



The Chinguetti-4-2 well was temporarily suspended following mechanical failure
of the testing equipment during preparation for a second production test. Whilst
the option of sourcing replacement testing equipment is being considered, Fusion
has commenced drilling of the Chinguetti-4-3 exploration well. This well is
located on a completely separate geological feature, known as the Banda
prospect, located approximately 20 kilometres to the east of the Chinguetti
accumulation. The Banda prospect lies on the boundary between PSC A and PSC B,
with the Chinguetti-4-3 well located in PSC A. Under terms of an agreement with
the original Licencees, Fusion will contribute 6% to the cost of drilling this
first well in PSC A.



Following the drilling of Chinguetti-4-3 Fusion anticipates drilling of a
further appraisal well on the Chinguetti accumulation. The proposed
Chinguetti-4-4 appraisal well is to be located in the southern sector of the
Chinguetti structure, and is intended to confirm the downthrown extent of the
field.



Following guidance from the Mauritanian Government, all wells in Mauritania will
now follow the naming convention 'Chinguetti-Block Number-Well Number'; hence
the designation of the wells in this current programme as Chinguetti-4-2,
Chinguetti-4-3 and Chinguetti-4-4.  PSC A and PSC B cover licence blocks 3, 4
and 5.



There remains a considerable inventory of undrilled prospects both within the
Tertiary section beyond the Chinguetti area and in deeper Cretaceous intervals.
It is anticipated that these will be investigated further by a drilling campaign
in 2003.


The Gambia:              Deepwater Petroleum Production Licence (PPL)
                         Equity:                   20%
                         Operator:                 Amerada Hess



The Gambia Deepwater PPL, which covers approximately 5,250 square kilometres,
extends from the 50 metre bathymetric contour to beyond 2,000 metres, and was
awarded in October 1999.



In the period 1999-2001 the Company acquired two 2D seismic datasets over the
previously unsurveyed deeper parts of this permit; a 1,000 kilometre regional 2D
seismic survey followed by a 720 kilometre infill survey.  These data sets have
identified a number of highly prospective structural and stratigraphic features
that show strong similarities to recent discoveries that have been made
elsewhere in West Africa.



In August 2002, Fusion signed an agreement with Amerada Hess whereby Amerada
Hess would acquire an 80% interest and operatorship of the Gambia license in
return for carrying certain costs associated with the forward work programme. As
part of the farmin deal Amerada Hess will fund the acquisition of 1,250 square
kilometres of 3D seismic at the earliest opportunity.  These data will be used
to define an inventory of drillable prospects.  Should Amerada Hess elect to
drill it will fund the costs of up to two exploration wells up to a cost of
US$22.5 million per well.


AGC:                     Croix du Sud Convention de Recherche
                         Equity:                   20%
                         Operator:                 Amerada Hess


                         Cheval Marin Convention de Recherche
                         Equity:                   10%
                         Operator:                 AGIP



The Agence de Gestion et de Cooperation entre le Senegal et la Guinee-Bissau 
('AGC') is the Joint Commission established by the Governments of Senegal and
Guinea-Bissau to administer petroleum and fishing activity within their shared
maritime border zone.



Fusion has interests in two permits in the AGC area; Croix du Sud and Cheval
Marin, which lie in water depths ranging from less than 50 metres to greater
than 3,500 metres, and were awarded in 2000.



The Cheval Marin Convention covers an area of approximately 6,500 square
kilometres and is operated by AGIP with Fusion holding an interest of 10%.  The
Croix du Sud Convention covers an area of approximately 3,550 square kilometres
and was initially operated by Fusion with an interest of 88%. In August 2002,
Fusion signed an agreement with Amerada Hess whereby Amerada Hess would acquire
a 68% interest and operatorship of the Croix du Sud permit in return for
carrying certain costs associated with the forward work programme.




An extensive 2D seismic database has been acquired over both permits.  Early in
2002 the Cheval Marin Joint Venture acquired approximately 2,500 square
kilometres of 3D seismic data.  Early results are exciting with outstanding data
quality and encouraging indications with regard prospectivity associated with
deepwater salt-related structural trends.  The 2D data acquired in 2001 revealed
for the first time that these deepwater structural trends are also well
developed in Croix du Sud.  As part of the Croix du Sud agreement Amerada Hess
will fund the acquisition of approximately 1,500 square kilometres of 3D seismic
at the earliest opportunity which will investigate these features further and
define an inventory of drillable prospects.  Should Amerada Hess elect to drill
they will fund the cost of up to two exploration wells up to a cost of US$22.5
million per well.


Cameroon:                Ntem Concession Contract
                         Equity:                   20%
                         Operator:                 Amerada Hess



In March 2001 the Company announced that, following a competitive bidding round,
it had signed a Petroleum Concession Contract (PCC) with the Republic of
Cameroon. The Ntem contract covers an area of approximately 2,300 square
kilometres, with water depths ranging from less than 1,000 metres to over 2,000
metres.  At award Fusion held 100% equity in the Ntem contract.



In March 2001 the Company acquired a 2,100 kilometre 2D seismic survey over the
permit area, which led to the identification of numerous prospective features.
The Ntem permit is located in the Douala/Rio Muni basin that has, subsequent to
the Fusion award, become an area of considerable industry focus. This attention
has been due to the considerable exploration success of Amerada Hess,
particularly in the detection of subtle yet large accumulations. To date Amerada
Hess has discovered six accumulations and brought its initial discovery on
stream some 14 months after discovery.



Given the experience of Amerada Hess in Equatorial Guinea to the south it is
particularly significant that in August 2002, Fusion entered into an agreement
whereby Amerada Hess has acquired an 80% interest and operatorship of the Ntem
license in return for carrying certain costs associated with the forward work
programme. As part of the farmin deal Amerada Hess will fund the acquisition of
approximately 1,500 square kilometres of 3D seismic at the earliest opportunity.
These data will be used to define an inventory of drillable prospects.  Should
Amerada Hess elect to drill they will fund the cost of up to two exploration
wells up to a cost of US$15 million per well.


Gabon:                   Iris Marin PSC and Themis Marin PSC
                         Equity:                   38.57%
                         Operator:                 Fusion Oil & Gas NL



The Iris Marin PSC and Themis Marin PSC were awarded in 1999, to Joint Ventures
in which Fusion is operator and holds a 38.57% interest. Both permits cover
offshore coastal areas, with water depths ranging from the surf zone to 50
metres. The combined area under licence is approximately 1,800 square
kilometres.



Iris Marin and Themis Marin lie within the prolific Southern Gabon Basin, which
contains approximately half of the known reserves of Gabon. Although large
fields lie immediately adjacent to both permits, operational difficulties and
geophysical challenges have combined to limit previous exploration of these
permits. Recent advances in seismic technology have meant that sub-salt
structure can now be mapped with far greater accuracy, which has lead to
successful exploration in adjacent permits in the South Gabon Basin.



In 2001/2002 Pioneer Natural Resources discovered and successfully appraised a
large accumulation in the Olowi Marin permit, which lies between the Fusion Iris
Marin and Themis Marin permits. Four successful wells have been drilled into the
accumulation and Pioneer currently estimates potential reserves possibly in
excess of 300 million barrels. Concurrently, Vaalco have successfully appraised
and developed the Etame field 15 kilometres south of Themis Marin.



Fusion completed two 2D seismic surveys in the two permits in 2002, acquiring a
total of 2,700 kilometres of data. This dataset shows markedly better clarity
than previous data and has allowed accurate mapping of both pre- and post-salt
intervals enabling a preliminary assessment of the effectiveness of previous
exploration wells and identifying numerous undrilled structures.  Interpretation
of the complex geology is continuing however preliminary results are
encouraging.


SADR (Western Sahara):               Technical Cooperation Agreement
                                     Equity:              100%
                                     Operator:            Fusion Oil & Gas NL



In April 2002, Fusion signed a Technical Cooperation Agreement ('TCA') with the
Saharawi Arab Democratic Republic ('SADR') covering the entire offshore
territory of the country. The TCA area extends from the coast to beyond the
3,000m bathymetric contour and covers an area in excess of 215,000 square
kilometres. Fusion holds a 100% interest in this agreement.



The Agreement provides Fusion the opportunity to conduct an exclusive technical
review of this large area and, in return for providing the results of this
assessment to the Government of the SADR, nominate up to three areas for
exploration licensing. As and when the SADR is admitted to the United Nations,
these nominated areas will be awarded to Fusion as conventional exploration
licenses.



The indigenous Saharawi people and Morocco currently contest sovereignty over
Western Sahara, and a diplomatic solution to this dispute is being actively
sought by the United Nations.



As a result of this political dispute the offshore territory area has remained
largely unexplored since the 1970's. Nevertheless, many of the factors that have
contributed to exploration success in Mauritania appear to be present and Fusion
is therefore optimistic that significant prospectivity may be revealed.




Consolidated Profit and Loss Account
for the Year Ended 30 June 2002
(Unaudited)
                                                                       Year                 Period
                                                                      Ended          12 April 2000
                                                               30 June 2002        to 30 June 2001
                                                                          £                      £

Operating loss                                                  (1,216,512)            (4,310,399)

Interest receivable and similar income                             296,163                478,026

Loss on ordinary activities before taxation                       (920,349)            (3,832,373)

Tax on loss on ordinary activities                                      -                      -

Loss on ordinary activities after taxation                        (920,349)            (3,832,373)

Loss per ordinary share
- basic                                                               0.99p                  5.69p
- diluted                                                             1.02p                  5.70p



Consolidated Balance Sheet
at 30 June 2002
(Unaudited)
                                                               30 June 2002           30 June 2001
                                                                          £                      £


Fixed assets

Intangible exploration and appraisal expenditure                 6,776,109              2,926,332
Tangible assets                                                    174,327                 47,752

                                                                 6,950,436              2,974,084

Current assets

Debtors                                                             63,185                 39,165
Investments                                                             -               9,080,000
Cash at bank and in hand                                         4,527,311                918,947

                                                                 4,590,496             10,038,112

Creditors (amounts falling within one year)
Creditors                                                          259,484                850,260

Net current assets                                               4,331,012              9,187,852


Total Assets less current liabilities                           11,281,448             12,161,936

Capital and reserves


Called up share capital                                            930,808                925,380
Share premium account                                           15,103,362             15,068,929
Profit and loss account                                         (4,752,722)            (3,832,373)

Equity Shareholders' funds                                      11,281,448             12,161,936





Consolidated Cash Flow
for the Year Ended 30 June 2002
(Unaudited)                                                            
                                                                        Year                Period
                                                                       Ended         12 April 2000
                                                                30 June 2002       to 30 June 2001
                                                                           £                     £


Net cash (outflow)/inflow from operating activities
(Note 1)                                                         (1,242,920)              265,354

Returns on investing & servicing of finance

Interest received                                                   296,163               478,026

Capital expenditure & financial investment

Purchase of tangible assets and expenditure on exploration       (4,564,740)           (5,004,772)

Acquisitions & disposals

Net cash acquired with subsidiary                                        -                351,453


Cash outflow before use of liquid resources & financing          (5,511,497)           (3,909,939)

Management of liquid resources

Cash placed on deposit                                                   -             (9,080,000)

Cash withdrawn from deposit                                       9,080,000                    -

Net cash inflow/(outflow) from management of liquid
resources                                                         9,080,000            (9,080,000)


Financing

Net Proceeds from share issues and issue of convertible

note (net of capital raising & flotation costs)                      39,861            13,908,886



Net cash inflow from financing                                       39,861            13,908,886



Increase in cash for the year                                     3,608,364               918,947










Note 1

Reconciliation of operating loss to net cash
(outflow)/inflow from operating activities



Operating loss                                                   (1,216,512)           (4,310,399)



Depreciation charges                                                 59,699                 7,739

Write off of exploration                                            107,546             2,804,866

Flotation costs expensed                                                 -                885,411

(Decrease)/Increase in creditors                                   (171,421)              671,655

(Increase)/Decrease in debtors                                      (24,021)              206,082



Net cash (outflow)/inflow from operating activities              (1,664,064)              265,354





Note 2.       Issue of Equity



The Company has today entered into arrangements to place up to 4.5 million new
Ordinary shares with institutional investors to raise up to £1.9 million net of
expenses to provide additional working capital for the Group's ongoing
activities.  This fundraising is expected to be completed on 20 September 2002
when it is expected that the new Ordinary Shares will be admitted to AIM.
Whilst there is some uncertainty at the time of issuing this statement because
this fundraising is not underwritten, the Directors are confident that this will
generate sufficient funding for the Group's operations in the foreseeable
future.


Corporate Directory


Directors

Peter Dolan                         Alan Stein                     Jonathan Taylor
Chairman                            Managing Director              Exploration Director


Patrick O'Connor                    Richard Stabbins               Derek Williams
Non Executive Director              Non Executive Director         Non Executive Director


Company Secretary

Raymond Godson


Australian Registered Office and    UK Representative Office       UK Registered Office
Principal Office

Level 2
                                    8 Old Lodge Place              6-7 Pollen Street
Scott House
                                    St Margarets                   London
46-50 Kings Park Road
                                    Twickenham                     W1S 1NJ
West Perth  6005
                                    TW1 1RQ                        England
Western Australia
                                    England



Registrars                          Solicitors                     Solicitors

Capita IRG Plc                      As to Australian Law           As to English Law

Bourne House                        Blakiston & Crabb              Norton Rose

34 Beckenham Road                   1302 Hay Street                Kempson House

Beckenham                           West Perth  6005               Camomile Street

Kent BR3 4TU                        Western Australia              London EC3A 7AN

England                                                            England


Corporate Brokers/Advisers          Auditors                       Public Relations

Investec Bank (UK) Ltd              Deloitte & Touche              College Hill Associates Ltd

2 Gresham Street                    Hill House                     78 Cannon Street

London EC2V 7QP                     1 Little New Street            London EC4N 6HH

England                             London EC4A 3TR                England

                                    England



Bankers                             Bankers                        Internet & email addresses:

Australia:                          England:                       Email: [e-mail]

HSBC Bank Australia Limited         HSBC Bank plc                  Web:   www.fusionoil.com.au

188 - 190 St George's Terrace       Poultry & Princes Street

Perth  6000                         London  EC2P 2BX

Western Australia                   England





Note 1.       Fusion Oil & Gas plc is an international oil and gas exploration
company, with extensive interests in Africa. The Company has adopted a dual
strategy of frontier deepwater exploration in combination with shallow water or
onshore exploration in proven petroleum provinces using modern exploration
technology which has the ability to realise hitherto unrecognised potential.










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