Rejection of Offer

Fusion Oil & Gas PLC
25 September 2003

Fusion Oil & Gas plc



                          ('Fusion' or 'the Company')



Rejection of undervalued offer from Sterling Energy plc ('Sterling')



Discussions taking place with third parties



As previously announced, Fusion Oil & Gas plc, the AIM listed oil exploration
company with interests in West Africa, has noted the announcement this morning
by Evolution Beeson Gregory Limited on behalf of Sterling of its intention to
make an unsolicited offer for the whole issued and to be issued ordinary share
capital of Fusion.



This announcement by Sterling follows a recent all paper approach from Sterling,
which the Board of Fusion rejected on the grounds that it significantly
undervalued the Company. The Fusion Board remains firmly of this view in
relation to the revised offer proposal from Sterling, which it strongly
recommends shareholders to reject. The Fusion Board believes that the majority
paper offer proposal by Sterling lacks rationale and significantly undervalues
the Company.



Fusion is exploring opportunities to realise greater value for shareholders and
is currently holding discussions with a number of parties with the objective of
achieving this. The Fusion Board urges shareholders to take no action at this
stage.



The Board of Fusion will write to shareholders setting out its views on the
offer in more detail when the formal offer document has been issued.



Chairman of Fusion, Peter Dolan, said:



'The unsolicited offer from Sterling takes little account of the true value of
Fusion or its future prospects.  The Fusion Board believes that the majority
paper offer substantially undervalues the company.  The offer in its current
form dilutes Fusion shareholders' exposure to the company's drilling programme.
Fusion shareholders are encouraged to take no action at this stage.'





25 September 2003



Enquiries


Fusion Oil & Gas plc
Peter Dolan, Chairman                      Tel:       [phone] (today)

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

                                           Email:  [e-mail]

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

Canaccord Capital (Europe) Ltd
Toby Hayward                               Tel:     [phone]

                                           Email:  [e-mail]





The Directors of Fusion (other than Mr Williams and Mr Levison, who have not
participated in these deliberations on the proposed 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 document 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 no one else in connection with the proposed offer and the other
matters described herein and will not be responsible to anyone other than Fusion
for providing the protections afforded to clients of Canaccord or for providing
advice in relation to such offer and the other matters described herein


                      This information is provided by RNS
            The company news service from the London Stock Exchange