Drilling Report

Fusion Oil & Gas PLC
2 July 2001

                             Fusion Oil & Gas plc

                         ('Fusion' or 'the Company')


           Fusion Oil & Gas plc Mauritania Drilling Progress Report

               Gas Encountered During Intermediate Logging Run


Fusion Oil & Gas plc reports the following progress with its drilling
programme offshore Mauritania.


The Courbine-1A well has reached a depth of 3195 metres in a 171/2' hole.
Wireline logs have been run and formation pressures and fluid samples have
been recovered. Logs indicate that a 9 metre gas column was penetrated. A gas
water contact was intersected at the base of the gas column. The forward
programme is to run 133/8' casing and then drill ahead to the primary
objective with a programmed total depth of 4,000 metres.


The Courbine-1A well lies within Production Sharing Contract (PSC) Area B.
Fusion's interest in PSC B is 6% and the Company is free-carried through the
drilling of the Courbine-1A well.


Hydrocarbon shows will only be reported after wireline logs have been run and
evaluated.


The Company has decided to issue routine weekly progress reports for this well
in view of a similar policy of disclosure to the Australian Stock Exchange
adopted by the Operator, Woodside Petroleum Ltd. Routine reports will be
released on the company's web page at www.fusionoil.com.au and reports
containing material developments will be reported to the Stock Exchange in the
normal manner.


                                                                   2 July 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