Final Results

Fusion Oil & Gas PLC
12 September 2003


                              Fusion Oil & Gas plc
                    ('Fusion' or 'the Company' or 'the Group')

              Preliminary results for the year ended 30 June 2003


Fusion Oil & Gas plc, the AIM listed African oil exploration company, announces
preliminary results for the year ended 30 June 2003.


HIGHLIGHTS:

•  Pre-tax profit of £3.22m (2002: loss of £0.92m) after including profit
   on partial sale of subsidiary undertakings of £4.23m (2002: Nil)

•  Basic earnings per share of 3.31p (2002:  loss of 0.99p)

•  At 30 June 2003, £7.37m cash at bank (2002: £4.53m).

•  Successful appraisal of the 2001 Chinguetti oil discovery and a further
   oil and gas discovery on the Banda prospect in the Mauritania PSC B licence.

•  Completion of the farm-out of two deepwater licences to subsidiaries of
   Amerada Hess.

•  Announcement of a multi-asset deal with Premier which involves:

   -  Receipt of an initial payment of US$10 million; future cash payments and
      production royalties from the Mauritania licences,
   -  Premier's participation in our two Gabon licences,
   -  an option for Fusion to participate in Premier's two Guinea Bissau
      licences and
   -  an option for Premier to participate in any future licences awarded to
      Fusion offshore Western Sahara (Saharawi Arab Democratic Republic (SADR)) 
      on a promoted basis.


Alan Stein, Managing Director of Fusion commented:

' Following an exceptionally active year, Fusion is now in a position that is
stronger than at any time since its IPO almost 3 years ago, with exposure to
participation in at least 6 and possibly more than 15 wells over the next two
years, the first of which spudded on 4 September 2003. With the majority of
these wells being free carried for Fusion, the Company will have gearing to all
future success in Mauritania at no cost, exposure to several high impact
exploration wells elsewhere, an active new ventures programme and sufficient
working capital for 18 to 24 months.'

                                                               12 September 2003



Enquiries

Fusion Oil & Gas plc
Alan Stein, Managing Director Australia      Tel:   [phone]
                                             Fax:   [phone]
                                             Email: [e-mail]
Peter Dolan, Chairman England                Tel:   [phone]
                                             Fax:   [phone]
                                             Email: [e-mail]

College Hill Associates                      Tel:   [phone]
                                             Fax:   [phone]
James Henderson                              Email: [e-mail]
Phil Wilson-Brown                            Email: [e-mail]





              CHAIRMAN'S STATEMENT AND MANAGING DIRECTOR'S REVIEW

During the last year Fusion has made significant progress on all fronts,
realising value in Mauritania, building a significant exploration base,
strengthening its financial position and creating a potentially prolific revenue
stream for the future.

The Group successfully appraised the 2001 Chinguetti oil discovery and made a
further oil and gas discovery on the Banda prospect in the Mauritania PSC B
licence and completed the farm-out of two deepwater licences to subsidiaries of
Amerada Hess Corporation ('Hess'). It also announced a multi-asset deal with
Premier Oil plc ('Premier') enabling it to realise early value from its
Mauritania assets. Consequently, the Group is now in a very strong position from
which to generate future growth.

Results

Pre-tax and post-tax profit was £3.22m (2002: loss of £0.92m) as a result of a
number of disposals during the year. Basic earnings per share were also up at
3.31 pence per ordinary share (2002: loss of  0.99p).  The profit includes the
write off of new venture exploration costs of £375,418 (2002: £107,545).

Corporate Activity

In May 2003, Fusion announced that it had entered into an agreement with Premier
in relation to West African licence interests in Mauritania, Gabon, Saharawi
Arab Democratic Republic ('SADR') and Guinea Bissau.

This comprehensive transaction allowed Fusion to maximise value prior to onset
of development expenditure, whilst simultaneously accelerating its drilling
programme and maintaining shareholder gearing to future exploration success
across the whole portfolio.

Under the terms of the transaction Fusion received an immediate cash
consideration of US $10 million, and will receive additional payments in the
event that further exploration successes with reserves of greater than 50
million barrels in the Mauritanian licences are declared to be commercial.
Fusion will also receive a royalty interest over all future production from its
two Mauritanian offshore licences, including existing discoveries. This royalty
payment has the potential to be a very material revenue stream for Fusion.

The transaction also included an opportunity for Premier to participate in
Fusion's two Gabon licences, an option for Fusion to participate in Premier's
two Guinea Bissau licences and an option for Premier to participate in any
future licences awarded to Fusion offshore Western Sahara (SADR) on a promoted
basis.

The net benefit of the deal is to position Fusion for an active, high-impact
exploration drilling programme across its portfolio over the next 18-24 months.
During this time it will have direct and indirect participation in the drilling
of at least 6 and possibly more than 15 exploration wells.

The acquisition of large volumes of 3D seismic data is leading to the
compilation of a very significant prospect inventory.

Financial

The Fusion business model has, since the IPO in September 2000, consistently
been to add value through the application of innovative geoscience and to seek
to realise early, optimum value for shareholders before significant capital
investment is required.  That is exactly what has been done in Mauritania during
the last year, and by the farm-outs to Hess and Premier. These deals have
resulted in Fusion being carried through future costs (a form of project finance
without reverting to shareholders or to bank loans) and receiving cash payments.

In addition, on 20 September 2002, the Company placed 4.5 million new shares at
45p per share with institutional investors on a non-underwritten basis to raise
£2.0million (net of expenses) in additional working capital. At the end of the
reporting period, the Company had funds available of £7.37million (2002:
£4.53million).

Licence Interests

•  Mauritania

In Mauritania, Fusion has agreed a sliding scale royalty interest covering all
future production from the PSC A and PSC B licences. Having proven the potential
of this acreage, the Company has no further exposure to the considerable capital
requirements to explore and develop subsequent discoveries that may be made.
Assuming development of the Chinguetti Field goes ahead, with an oil price in
the range of US$22 to 25 per barrel and that there are reserves estimated by
Fusion of 148 million barrels, the royalty could potentially generate
approximately US$13 million in royalty revenue for the Group over the life of
the field.  The Chinguetti Field is currently anticipated to begin production
during 2005 at an initial rate of 75,000 barrels of oil per day.

The 2003 drilling campaign in Mauritania commenced on 4 September 2003 when the
Chinguetti-4-5 appraisal/early development well was spudded. This well will be
placed on an extended production test and is planned to be completed as a
producer. The second well in this campaign will be an exploration test of the
Tiof prospect some 25 km north of the Chinguetti Field. A decision on whether or
not to drill a third well will be made following the results of the first two
wells. Fusion will retain exposure to all future exploration success in PSC A
and PSC B at no additional cost to the Company.

•  AGC

In the deepwater licences of the AGC area (the joint development zone between
Senegal and Guinea Bissau), Fusion has recently acquired two large 3D seismic
surveys in its Croix du Sud and Cheval Marin licences that have confirmed the
presence of a highly structured deepwater basin and have revealed numerous
potential reservoir fairways.  Based on current Fusion estimates, the total
unrisked resource in these two permits is in excess of 800 million barrels net
to the Company.  This resource assessment will be revised later in the year
following a thorough evaluation of the 3D datasets.  Fusion has been carried
through the cost of the 3D seismic in Croix du Sud by Hess.  In October, Hess
must elect whether to continue with the farm-in and fund the cost of exploration
drilling or withdraw.  To complete the farm-in Hess must fund the cost of the
first two wells drilled in the Croix du Sud licence capped at US $22.5 million
per well and all other licence expenditure until completion of the second well.

•  Cameroon

The other deepwater licence in the Company's portfolio is in Cameroon where
Fusion has been carried by Hess through the acquisition of a large 3D seismic
survey.  The survey has confirmed the prospectivity identified by the earlier 2D
seismic survey and will define prospects.  The current unrisked resource
assessment by Fusion for the Ntem licence is in excess of 370 million barrels
net to the Company.  In November, Hess must elect whether to continue with the
farm-in and fund the cost of exploration drilling or withdraw.  To complete the
farm-in Hess must fund the cost of the first two wells in the Ntem licence
capped at US $15 million per well and all other licence expenditure until
completion of the second well.

•  Gabon

In Gabon, Premier has an opportunity to earn an equity position by carrying
Fusion's costs in up to two wells on each of our two licences. These licences
contain prospects estimated by Fusion to have an unrisked resource in excess of
200 million barrels net to the Company. This estimate will be refined, and
specific drilling locations will be selected after completion of the processing
of two 3D seismic surveys, which is due to be completed in early 2004.

•  Others (Dome Flore (AGC), Guinea Bissau, Western Sahara)

Elsewhere, Fusion has an 85% working interest in the AGC Dome Flore licence
where substantial oil potential exists. A recently acquired 3D seismic survey is
being evaluated prior to seeking partners. In a nearby area of Guinea Bissau,
Fusion has a no-cost 5% back-in option on Premier's Sinapa and Esperanca
licences, where at least one well is expected to be drilled in the near future.
Both of these assets have had a lower profile within the overall Fusion
portfolio, being relatively recent acquisitions. However, the potential
resource, net to the Company, after an anticipated dilution of Fusion's interest
in Dome Flore alone, is estimated to be in excess of 200 million barrels.  This
resource assessment will be revised following completion of the processing of
the Dome Flore 3D seismic survey later this year.

Finally, offshore Western Sahara (SADR) Fusion has finished a technical review
which entitles the Company to apply for up to three large exploration licences,
award of which would be contingent upon the SADR being recognised as an
independent nation by the United Nations. Premier have an option to farm-in to
any such awards on a promoted basis.

Outlook

The high-grading of our licence portfolio and funding of much of our near and
medium term exploration is principally due to the skill of our staff. They have
identified new prospectivity on under-explored acreage and been able to
demonstrate this with high quality work to substantial companies who have been
prepared to pay a premium to participate in future exploration. Their efforts
are the core competence of the Company which I am very pleased to acknowledge.

As a result, Fusion finds itself in a very strong position with participation in
at least 6 and in possibly more than 15 wells over the next two years. The
majority of these will be free-carried as a result of the Hess and Premier
deals. We have sufficient working capital for 18 to 24 months and gearing to all
future success in Mauritania at no cost (exploration or development) in addition
to a proactive new ventures programme. With the favourable exploration success
rates established in West Africa, it would be reasonable to expect further
discoveries to be made in which Fusion will have significant levels of equity.

Following the successful completion of the transactions with Hess and Premier
and given the stage of Fusion's development, your Board of Directors has
resolved to increasingly focus on extracting the value that has been established
in the Company's assets, for the benefit of all Shareholders.


Peter Dolan                                          Alan Stein
Chairman                                             Managing Director




                 UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
                        FOR THE YEAR ENDED 30 JUNE 2003

                                                            30 June 2003                     30 June 2002
                                                                  £                                £

Administrative expenses                                      (1,752,271)                     (1,216,512)

Exceptional operating income                                     636,856                               -

Operating loss                                               (1,115,415)                     (1,216,512)

Profit on partial sale of subsidiary
undertakings                                                   4,235,663                               -

Interest receivable and similar income                            99,607                         296,163

Profit/(loss) on ordinary activities
before taxation                                                3,219,855                       (920,349)

Tax on profit/(loss) on ordinary                                      
activities                                                            -                               -

Profit/(loss) on ordinary activities
after taxation                                                 3,219,855                       (920,349)

Profit/(loss) per Ordinary share
- basic                                                            3.31p                         (0.99)p
- diluted                                                          3.31p                         (1.02)p



Statement of Total Recognised Gains and Losses:

There are no recognised gains and losses for the current financial year and
preceding financial year other than those stated in the Profit and Loss Account.

The results are derived solely from operations that are continuing.



                      UNAUDITED CONSOLIDATED BALANCE SHEET
                               AS AT 30 JUNE 2003


                                       Notes                   30 June 2003                    30 June 2002
                                                                      £                               £
Fixed Assets
Intangible assets                        1                       11,410,290                       6,776,109
Tangible assets                                                     164,766                         174,327

                                                                 11,575,056                       6,950,436

Current Assets
Debtors                                                              49,456                          63,185
Cash at bank and in hand                                          7,369,967                       4,527,311

                                                                  7,419,423                       4,590,496

Creditors
(amounts falling due within one
year)                                                             (757,331)                       (259,484)

Net Current Assets                                                6,662,092                       4,331,012

Total Assets less Current                                        
Liabilities                                                      18,237,148                      11,281,448

Capital and Reserves
Called up share capital                                             982,052                         930,808
Share premium account                                            17,046,314                      15,103,362
Profit and loss account                                         (1,532,867)                     (4,752,722)

Equity Shareholders' Funds                                       16,495,499                      11,281,448
Minority Interests                                                1,741,649                               -

Total Capital Employed                                           18,237,148                      11,281,448





                   UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
                        FOR THE YEAR ENDED 30 JUNE 2003

                                                                   30 June 2003                  30 June 2002
                                                                          £                             £

Net cash outflow from operating activities     A                      (439,112)                   (1,242,920)

Returns on investing & servicing of
finance
Interest received                                                        99,607                       296,163

Capital expenditure & financial investment
Purchase of tangible assets and
expenditure on exploration                                          (4,789,347)                   (4,564,740)

Acquisitions and disposals
Proceeds on part disposal of subsidiary
(net of £387,660 (2002 : Nil) of
expenses.)                                                            5,977,312                             -

Cash inflow/(outflow) before use of liquid
resources & financing                                                   848,460                   (5,511,497)

Management of liquid resources
Cash withdrawn from deposit                                                   -                     9,080,000

Financing
Net Proceeds from share issues                                        1,994,196                        39,861

Net cash inflow from financing                                        1,994,196                        39,861

Increase in cash for the year                                         2,842,656                     3,608,364





                                                                  30 June 2003                  30 June 2002
                                                                        £                             £
A. Reconciliation of operating loss to net
   cash outflow from operating activities

Operating loss                                                     (1,115,415)                   (1,216,512)
Depreciation charges                                                    79,475                        61,488
Write-off exploration expenditure                                      375,418                       107,545
Increase/(decrease) in creditors                                       207,681                     (171,421)
Decrease/(increase) in debtors                                          13,729                      (24,020)


Net cash outflow from operating activities                           (439,112)                   (1,242,920)




                                                                              Group
                                                                     2003                 2002
                                                                      £                    £
1.  Intangible fixed assets

    Capitalised exploration expenditure at the
    beginning of the year                                          6,776,109           2,926,332

    Exploration expenditure incurred during the
    financial year                                                 5,009,599           3,957,323

    Less: Exploration expenditure written off
    during the year                                                (375,418)           (107,546)

                                                                  11,410,290            6,776,109



The financial information set out in the announcement does not constitute the
Group's statutory accounts for the years ended 30 June 2003 or 2002, and is
prepared on the basis of the accounting policies as set out in the most recently
published set of annual financial statements. The financial information for the
year ended 30 June 2002 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 2003 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 Company's annual general
meeting.


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