Drilling Report

Fusion Oil & Gas PLC
16 May 2001

                             Fusion Oil & Gas plc

                         ('Fusion' or 'the Company')


          Fusion Oil & Gas plc Chinguetti-1 Drilling Progress Report



Fusion Oil & Gas plc reports that the Chinguetti-1 exploration well, located
in offshore Mauritania, is currently running wireline logs after reaching a
total depth of 2620 metres.


The well has intersected several oil bearing sandstones in the primary
objective over a gross hydrocarbon interval of 86 metres. A shallower
secondary objective contains gas bearing sandstones over a 7 metre interval.
The logging and evaluation program is continuing.


All reported depths (except water depth) are referenced to the rig rotary
table.


The Chinguetti-1 well is located approximately 80 km from the coastline of
Mauritania in 800 m of water. The well lies within Production Sharing Contract
(PSC) Area B. Fusion's interest in PSC B is 6%.


                                                                   16 May 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
James Henderson               e-mail: [e-mail]
Peter Brookes                 e-mail: [e-mail]