Independent Valuation

Fusion Oil & Gas PLC
31 October 2003

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

                             Independent Valuation



On 20th October 2003, Fusion stated it had commissioned an independent technical
review of its assets to establish the quantum of the proven, probable and
possible reserves that could be reasonably attributed to the Company.



Fusion has now received the report, which was prepared by Scott Pickford Ltd ('
Scott Pickford'), a leading firm of oil and gas valuation experts. Below is
Scott Pickford's executive summary of its report.



'EVALUATION OF CERTAIN WEST AFRICAN HYDROCARBON EXPLORATION INTERESTS



In response to your request we have reviewed the interests and given indicative
values to the prospects and leads recognized within the West African petroleum
exploration licences owned by various subsidiaries of Fusion Oil & Gas plc
(hereafter collectively referred to as 'Fusion'). Particular emphasis has been
given to those prospects that are believed to be, given the current state of
knowledge, the most likely to be selected as early drilling candidates. We have
also made comments about the nature of other prospects and leads within the
current inventory and the risks associated with them.



Our evaluation relates specifically and solely to the subject assets and is
conditional upon various assumptions that are conformable with good oil industry
practice.



The subject licences are listed below.


         Country                   Licence                  Area             Fusion net interest
Mauritania                 PSC A                        10,474 km(2)         Royalty based on 3%
                           PSC B                        10,680 km(2)         Royalty based on 6%
Senegal/Guinea-Bissau      Cheval Marin                  6,292 km(2)                 10%
Common Zone* (AGC)         Croix du Sud                  3,546 km(2)                 88%
Cameroon                   Ntem                           2,080 km2                  20%
Gabon                      Iris                           607 km(2)                20.57%
                           Themis                        1,215 km(2)               20.57%
Senegal                    Dome Flore                     1,600km2                   85%
Guinea-Bissau**            Sinapa & Esperanca             5,900 km2                  5%
Saharawi Arab Democratic   Offshore TCA                  217,000 km2               100%***
Republic (SADR)



*award by the AGC joint administration which administers the border sector
between Senegal and Guinea-Bissau

**option to back-in after first two wells on each licence

*** Premier has an option to take a 35% interest in any licences subsequently
awarded thus reducing the Fusion interest to 65%



The stage of exploration in the various licences is at different levels.  In
Mauritania, two prospects have been drilled whereas in other licences
exploration leads have been recognised and additional work is in progress that
will enable these to be ranked in terms of attractiveness for drilling.  Our
approach in evaluating the licences has been to review the technical work
performed by Fusion and/or its Operators to define potential hydrocarbon
accumulations and to estimate the value of such accumulations if they were to be
successfully drilled and developed.  We have not evaluated each individual
prospect or lead as they are too numerous.



At this stage in their respective exploration programmes all prospects and leads
are subject to varying degrees of technical risk. Where that risk can be
addressed by the acquisition of further seismic data (particularly 3D data)
Fusion or its Operator has already implemented a programme to acquire the
appropriate data. These new surveys are either in the process of being
incorporated into the existing data with the aim of defining drillable prospects
or in the final stages of specialist processing. It is confidently expected that
these data will significantly reduce exploration risk. It is however possible
that some of the prospects or leads may become less attractive as a result of
the new 3D data and there are some risk factors that cannot be mitigated by
seismic data alone.



Due to the very large number of prospects and leads currently in the Fusion
portfolio our approach has been to select two or three prospects or leads per
licence area that are regarded as indicative of the kind of features that might
be selected for early drilling. We have estimated the 'value' of the success
case for each prospect/lead on a standard discounted cash flow basis assuming a
10% discount rate. It should be stressed that the exploration risk assigned to
each prospect/lead may often be shared with other similar features (with the
same play concept) therefore a successful appraisal of one such feature will
significantly reduce the risk on others of the same type. These values should
then be regarded as indicative of the reward expected from a number of similar
prospects should they be successfully developed.



We note that in areas other than Mauritania where appraisal of the Chinguetti
discovery is well advanced there is no guarantee that commercial hydrocarbon
accumulations will be found.  However, we consider that Fusion itself has
competent management and staff, and appropriate experience to undertake
efficiently their planned exploration work and where it does not directly
operate licences the relevant operator is a company of sufficient technical
competence to carry out the planned exploration programmes and any subsequent
appraisal work.



In our statements and calculations the licence interests assumed are those
presented to us by Fusion and we have not checked the title to the interests.
Our estimates of potential reserves and values are based on data provided by
Fusion.  The data comprised seismic data, maps, geochemical data and
interpretations, and other technical reports prepared by Fusion, its Operators
and their consultants, plus various statements issued by Fusion. Furthermore we
have accepted that these data represent the complete dataset available to Fusion
at the time of our review.



In this report the tables presenting details of prospect sizes and values refer
to the size and value of the prospect as a whole. The reserves and value net to
Fusion can be calculated by these values by the applicable Fusion net interest
and are given in the following tables.




On the 28th May 2003 Fusion signed a deal with Premier Oil plc the key elements
of which are presented below:



 1. Subject to completion of certain conditions, Fusion will receive a royalty
    interest over all future production from its two Mauritanian offshore
    blocks, including existing discoveries, in exchange for transferring
    ownership of its Mauritania licence holding companies to Premier. The level
    of royalty payment will be linked to the gross sale price as detailed below:


             Gross Sales Price (US$)                        Per Barrel Payment to Fusion
                       <16                                              0.25
                      16-19                                             0.75
                      19-22                                             1.25
                      22-25                                             1.75
                      25-28                                             2.25
>$28 an additional $0.50 for every $3 increase in sale price





 2. Fusion received from Premier a cash payment of US$10 million and will receive
    additional payments in the event of further commercial exploration successes
    in the Mauritanian blocks. These payments will be US$1 million for each
    commercial discovery over 50mmbbls in PSC A and US$2 million for each such
    discovery in PSC B other than in respect of the Chinguetti and Banda
    discoveries.



 3. Subject to completion of certain documentation, Premier will acquire an 18%
    interest in the two Gabon licences Themis and Iris Marin owned by Fusion in
    return for a carry on Fusion's share of the current exploration programme
    (including up to 4 wells - 2 in each PSC). Premier will have the right to
    withdraw after the drilling of the first exploration well in each PSC in
    which case Premier would return its 18% interest to Fusion.



 4. Fusion granted Premier an option to acquire an interest in any exploration
    licence awarded to Fusion in the Saharawi Arab Democratic Republic (SADR)
    under its recent TCA in exchange for funding initial exploration activity on
    a promote basis.



 5. Premier granted Fusion the option to acquire an interest in two licences
    offshore Guinea Bissau after the completion of the next exploration well on
    each licence.



Summary of Reserves



Tabulated below are the reserves and resources (net Fusion interest) listed by
category and geographical area. The reserve definitions employed in this report
follow the SPE/WPC guidelines (latest 2002 revision).




Reserves and Value


        Reserve Category              Licence          Asset        Reserve Volume      Value (US$MM)
                                                                       (MMSTB)
Proved                            Mauritania       Chinguetti            3.4                 2.5

                                  PSC B
                                  PSC A & B        Banda*                1.3                 0.7
Total Proved                                                             4.7                 3.2
Probable                          PSC B            Chinguetti            3.2                 2.2
                                  PSC A & B        Banda                 1.4                 0.6
Sub-Total                                                                4.6                 2.8
Total Proved plus Probable                                               9.3                 6.0
Possible                          PSC B            Chinguetti            1.8                 1.0
                                  PSC A & B        Banda                 4.8                 2.2
Sub-Total                                                                6.6                 3.2
Total Proved, Probable and                                               15.9                9.2
Possible



*Banda is calculated to be split in the ratio 90:10 between PSC A & B



Prospective Resources and Value



The Prospective Resources category has been divided into two sub-divisions the
first referring to Defined Prospects and the second to notional prospects i.e.
those not yet currently defined but thought likely to be present on the basis of
the available geophysical and geological data.



Defined Prospects


         Licence             Mean Resource Volume      Unrisked Value (NPV)    Risked Value (EMV) (US$MM)
                                   (MMSTB)                   (US$MM)
                             Unrisked     Risked
Mauritania                     120          34                 61.8                       33.6
AGC (Cheval Marin)             316          37                545.1                       47.5
AGC (Croix du Sud)*         477(2073)     78(343)         602.4 (2,972.8)             83.2 (379.6)
Guinea-Bissau                  141          35                223.2                       43.9
Cameroon                       313          63                506.8                       80.8
Gabon                          239          51                306.0                       57.7
Total                       1606(3202)   298(563)       2,245.3 (4,615.8)             346.7(643.1)



*Figures in parentheses refer to the reserves and value at the current Fusion
interest level of 88% following the decision by Amerada Hess not to proceed to
the drilling phase. The remaining figures assume that a further farmout deal
will be done such that the net Fusion interest will once again revert to 20%.



Notional Prospects and Value


         Licence             Mean Resource Volume      Unrisked Value (NPV)    Risked Value (EMV) (US$MM)
                                   (MMSTB)                   (US$MM)
                             Unrisked     Risked
AGC (Dome Flore)               200          40                486.2                       90.0
SADR                           390          29                190.3                       3.1
Total                          590          69                676.5                       93.1



The foregoing text is from a valuation report carried out by Scott Pickford Ltd.
Scott Pickford Ltd is an independent consultancy specialising in geology,
geophysics, petrophysics, petroleum engineering and economic analysis.  Except
for the provision of professional services on a fee basis, Scott Pickford Ltd
has no commercial arrangement with any person or company involved in the
interests that are the subject of this report.'



                                                        Friday 31st October 2003




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





The Directors of Fusion (other than Mr Williams and Mr Levison, who have not
participated in these deliberations on the Offer) accept responsibility for the
information contained in this announcement and to the best of their knowledge
and belief (having taken all reasonable care to ensure that such is the case),
the information contained in this announcement is in accordance with the facts
and does not omit anything likely to affect the import of such information.



Canaccord Capital (Europe) Limited ('Canaccord'), which is regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively for
Fusion and is acting for no one else in connection with the Offer and  will not
be responsible to anyone other than Fusion for providing the protections
afforded to clients of Canaccord nor for giving advice in relation to the Offer.



Scott Pickford has given and has not withdrawn its written consent to the issue
of this document with the inclusion therein of the executive summary of its
report and of its name and/or references thereto in the form and context in
which they appear.


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