Drilling Report

Fusion Oil & Gas PLC
26 March 2001

                             Fusion Oil & Gas plc

                         ('Fusion' or 'the Company')

         Fusion Announces Deepwater Drilling Programme for Mauritania

Fusion is an international oil and gas exploration company, with extensive
interests in deepwater West Africa, comprising 9 licences across 7 countries.
The Company listed on AIM in September 2000 and will be drilling its first
exploration wells in April.


Fusion today announced that the Joint Venture Partners in offshore Mauritania
Production Sharing Contracts ('PSCs') A and B have reached agreement on the
two well drilling programme scheduled to begin in early April 2001.


The 2001 work programme and budget was approved by the Mauritanian Government
in early March. The Scarabeo-7 drilling rig is currently on tow to Mauritania,
with arrival on site expected at the end of March and a spud date on or around
1 April.

The two wells will be drilled in PSC B however they will be deemed to satisfy
the contractual and farm-in obligations for both PSC A and PSC B . The costs
of drilling the wells will be borne equally by Woodside and AGIP under the
farm-in agreements entered into during August 1998. Fusion's equity
participation in PSCs A and B is 3 per cent and 6 per cent respectively.


Details of the two wells to be drilled during the first drilling phase are as
follows:


  * The Chinguetti-1 well will target the prospect now named Khede (formerly
    referred to by Woodside as Lead 1). This consists of stacked Tertiary
    targets draped over a salt diapir in a water depth of 800 metres. The
    primary target is interpreted as Miocene sand at an approximate depth of
    2,365 to 2,500 metres. The proposed total depth (TD) is 2,620 metres below
    sea level


  * The Courbine-1 well will target the Courbine prospect (formerly referred
    to by Woodside as Lead 8S). This consists of an interpreted Cretaceous
    canyon fill sequence draped over a toe thrust at an approximate depth of
    3,720 to 3,920 metres below sea level, in a water depth of 1,200 metres.
    Base case proposed TD is 4,000 metres, however an operationally contingent
    TD of 4,800 metres is carried as an option, and would allow a test of a
    deeper potential reservoir.


Additionally, the Courbine-1 well will test secondary targets within the
Tertiary section. Although these secondary targets will not be tested at the
optimum location, indications of high quality reservoir will further enhance
prospectivity in the Courbine prospect area.


Both wells are designed to provide maximum information about the various
petroleum systems that are thought to be present in the basin while at the
same time testing potentially economic reserves. In January 2001 DeGolyer and
Macnaughton prepared an independent expert's report on the drilling programme
for Woodside. The report showed estimated mean non-risked recoverable reserves
in the primary objectives of 180 and 216 million barrels for the Khede and
Courbine prospects respectively. In addition there are a number of prospects
and leads with comparable reserves potential within a 20km radius of the Khede
prospect (including Courbine) which could, in the event of success, be
developed by means of tie-back to central infrastructure.


Drilling operations are expected to commence early in April 2000. The
Chinguetti-1 well is expected to take 30-40 days to reach its objective while
the Courbine-1 well is expected to take 40-60 days.


These will be the first offshore wells drilled in Northwest Africa for over
ten years and will be the first tests of the region's deepwater petroleum
system. Fusion's acreage in Mauritania covers an area of 28,000 km2. Fusion
has additional Northwest African deepwater interests in Gambia, Senegal and
Guinea Bissau.


                                                                 26 March 2001


For further details please refer to the company's web page
www.fusionoil.com.au or contact:


Fusion Oil & Gas plc            Tel      [phone]
Level 2 Scott House             Fax     [phone]
46 Kings Park Rd                e-mail [e-mail]
West Perth 6005
Western Australia
Alan Stein                      Managing Director
Jonathan Taylor                 Exploration Director

Fusion Oil & Gas plc            Tel     [phone]
8 Old Lodge Place               Fax     [phone]
St. Margarets                   e -mail [e-mail]
Twickenham
Middlesex
TW1 1RQ
United Kingdom
Peter Dolan                     Chairman

College Hill Associates         Tel.     [phone]
78 Cannon Street                Fax.     [phone]
London EC4N 6HH                 e-mail [e-mail]
Peter Brookes