Drilling Report

Cairn Energy PLC
1 May 2002

EMBARGOED FOR RELEASE AT 0700




                                                                     01 May 2002



                                CAIRN ENERGY PLC


                         Block CB/OS-2 - Western India

                    Successful Step-Out Oil Well at Lakshmi

Following the recent discovery and testing of well LA-2 which flowed oil at
10,500 bopd, Cairn announces that the follow-up Lakshmi oil step-out well
(CB-A-3) has reached a total depth of 1,390 metres. The well was drilled
approximately three kilometres from the LA-2 well location and successfully
encountered up to 13 metres of high quality net oil bearing reservoir below the
Lakshmi gas field. This reservoir is the best developed oil sand encountered to
date in the Lakshmi wells.


Since all of the required technical information was gathered from the test
conducted at LA-2 and other nearby wells there is no requirement to conduct
further testing on the sand encountered in CB-A-3. Each of the seven wells which
have penetrated this stratigraphic interval below the Lakshmi gas field have
encountered net oil pay.


Further oil appraisal drilling to delineate the potential oil development area
beneath Lakshmi is planned for the end of the year after the monsoon season. In
the meantime, studies for a conceptual staged development are being initiated.


Revised oil in place estimates for the Lakshmi field are between 100 and 300
mmbbls. The CB-A-3 well result has also highlighted the potential for additional
oil prospectivity in the south-east of the block.


Bill Gammell, Chief Executive, commented:


'I am delighted that this well has significantly increased our confidence for a
commercial oil development at Lakshmi. I look forward to further exploration,
appraisal and development drilling on this block later in the year.'

Enquiries:-


Cairn Energy PLC:

Bill Gammell, Chief Executive                                 Tel: [phone]
Dr Mike Watts, Exploration Director                           Tel: [phone]
Kevin Hart, Finance Director                                  Tel: [phone]

Brunswick Group Limited:

Patrick Handley, Catherine Bertwistle, Mark Antelme           Tel: [phone]




Notes to Editors:-


 1. Cairn' where referred to in this release means Cairn Energy PLC and/or its
    subsidiaries, as appropriate.


 2. Cairn holds a 50% interest in the ring-fenced Lakshmi gas discovery in Block
    CB/OS-2. The remaining interests are held by ONGC (40%) and TATA Petrodyne
    Limited (10%).


 3. 'bopd' means barrels of oil per day.


 4. 'mmbbls' means million barrels of oil.




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