Drilling Report

ALLIANCE RESOURCES PLC 23 July 1999 Alliance Resources PLC announces that the development of the Dalton and East Millom Fields located in the East Irish Sea is ahead of schedule. On April 23rd, the Company announced the successful completion of the first well drilled in the development, the Dalton R1 well. The Dalton R2 well has now been successfully re-entered and re-completed. The R2 well tested at a maximum flow rate of approximately 54 MMSCFD on a 120/64 inch choke at 772 psig flowing tubing pressure. In the East Millom Field, the Millom Q1 well has been successfully re-entered and re-completed. The Q1 well tested at a maximum flow rate of approximately 18 MMSCFD on a 68/64 inch choke at 725 psig flowing tubing pressure. The Dalton R1, R2 and Millom Q1 wells are in the process of being tied back to the North Morecambe Bay Platform. First production is anticipated in August 1999. Enquiries: Jak Keenan Chairman and Managing Director Telephone: 001 918 491 1100