Drilling Report

Fusion Oil & Gas PLC
30 July 2002






                          Fusion Oil & Gas plc

                      ('Fusion' or 'the Company')

         Fusion to Commence Drilling Operations Offshore Mauritania


Fusion announces that the drill ship Deepwater Discovery is expected to commence
drilling the Chinguetti-4-2 step-out exploration well, located in PSC B offshore
Mauritania, later today.


The co-venture partners in offshore Mauritania Production Sharing Contracts
('PSCs') A and B have recently reached agreement on the 2002 drilling programme
which will consist of two firm wells and one contingent well.  The sequence of
drilling following the 4-2 exploration well has yet to be confirmed however the
programme is as follows:



•         Chinguetti-4-2, a step-out exploration well in an untested fault-block
of the Chinguetti structure, (Block 4, PSC B, Fusion interest 6%).



•         A contingent appraisal well on the Chinguetti structure. Drilling and
sequencing of this well will be dependent upon the results of Chinguetti-4-2.
(Block 4, PSC B, Fusion interest 6%).



•         An exploration well to target the Banda prospect (Block 4, PSC A,
Fusion interest 3%).


Following guidance from the Mauritanian Government, all wells in Mauritania will
now follow the naming convention 'Chinguetti-Block Number-Well Number'.
Therefore the official designation of the first well in this sequence will be
'Chinguetti-4-2'.  PSC's A and B cover licence blocks 3, 4 and 5.

Chinguetti Discovery (PSC B)

The Chinguetti-4-2 step-out exploration well is located in an untested fault-
block of the Chinguetti structure approximately 85 kilometres northwest of
Nouakchott and 2.5 kilometres north of the Chinguetti-1 discovery well.  Water
depth at the location is 815 metres.   Planned total depth is 2835 metres
referenced to the rig rotary table.

It is likely that an appraisal well will then be drilled as the third well in
the Chinguetti structure to fully delineate the oil volumes and scope for
production in the discovery.  Drilling and sequencing of this well will be
dependent on the results of Chinguett-4-2.

Testing equipment will be available to conduct production flow tests of the
wells drilled on the Chinguetti structure as warranted.

Banda Exploration Prospect (PSC A)

The Banda prospect, detailed by the recently acquired Oudane 3D seismic survey,
lies approximately 21 kilometres to the east of the Chinguetti structure and
straddles the boundary between PSC's A and B in approximately 300 metres of
water.  The well will be drilled in PSC A.

The primary reservoir objective in the Banda prospect is contiguous with that
encountered in the Chinguetti-1 discovery well.  Fusion has commissioned an
independent study of the Banda prospect from consultants Scott Pickford Limited
which concluded that the possible volume of oil-in-place (prior to recovery) in
the Banda Prospect is in the range (P90-P50-P10) 535-775-990 million barrels.

30th July 2002

Alan Stein, Managing Director of Fusion, commented:

'The 2001 Chinguetti-1 discovery established Northwest Africa as a potential new
deepwater petroleum province.  This year's combined appraisal and exploration
drilling campaign will determine the commercial value of the Chinguetti
discovery and also investigate an exciting exploration prospect which could
radically impact future development plans for this asset.'



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


Fusion Oil & Gas plc

Alan Stein, Managing Director                     Tel:   [phone]

Australia                                         Fax:   [phone]

                                                  e-mail:  [e-mail]


Peter Dolan, Chairman                             Tel:    [phone]

England                                           Fax:   [phone]

                                                  e-mail:  [e-mail]


College Hill Associates

Peter Rigby                                       Tel:   [phone]

James Henderson                                   Fax:   [phone]

                                                  e-mail:  [e-mail]





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