Drilling Report

Cairn Energy PLC
19 January 2004



EMBARGOED FOR RELEASE AT 0700

                                CAIRN ENERGY PLC

                                                                 19 January 2004

                     Significant Oil Discovery in Rajasthan

                    N-B-1 Exploration Well, Block RJ-ON-90/1

The N-B-1 exploration well, which is currently operating in the onshore northern
Rajasthan Basin, has made a significant oil discovery in a large simple
structure at shallow depths.

The well, located 60 kilometres north of Saraswati, is presently at a depth of
1,250 metres and has not yet reached the planned total depth. An intermediate
log has been run and evaluated and fluid samples of 24 degree API oil have been
recovered from the Fatehgarh.

The well has encountered two separate reservoir sections:-

Barmer Hill Reservoir

The well has intersected a log evaluated gross oil column of 136 metres in silty
sands from the Barmer Hill formation. The net pay is estimated to be 22 metres
with an average porosity of 21%.

Fatehgarh Reservoir

The well has intersected a log evaluated gross column of 185 metres in excellent
high quality Fatehgarh sands. The net pay is estimated to be 85 metres with an
average porosity of 25%. An oil-water contact has been established in the
Fatehgarh.

Planned Testing

Once the well has reached total depth a test programme is planned to confirm
reservoir deliverability, after which further announcements will be made.

Initial Oil in Place and Reserve Estimates

The initial estimates for the oil in place of this discovery range from 450 to
1,100 million barrels. Preliminary reserve estimates are in the 50 to 200
million barrel range.

Forward Appraisal and Exploration Programme

The current drilling programme is now being reviewed to allow early appraisal
drilling of the N-B-1 discovery and continued exploration drilling of several
similar prospects in the vicinity.

Bill Gammell, Chief Executive, commented:

'Whilst further evaluation and appraisal is required I am confident that this
discovery in isolation has the potential to transform the value of Cairn's
portfolio.'

Enquiries to:

Cairn Energy PLC

Bill Gammell, Chief Executive                         Tel: [phone]
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 is currently involved in an extensive exploration and
appraisal programme across its 5,000 square kilometre onshore exploration block
(RJ-ON-90/1) in the Rajasthan Basin.

3.                  Cairn holds a 100% interest in Block RJ-ON-90/1. Oil &
Natural Gas Corporation Ltd ('ONGC') has a right to 30% of any development area
resulting from a commercial discovery on the block.

4.                  The main exploration play objectives encountered in the
Rajasthan Basin, commencing with the stratigraphically youngest formation, are:
Thumbli, Dharvi Dungar, Barmer Hill and Fatehgarh.

5.                  'API' where referred to in this release means American
Petroleum Institute units as a measure of oil specific gravity.

Paste the following link into your web browser to download the PDF document 
related to this announcement: 

http://www.rns-pdf.londonstockexchange.com/rns/3587u_19 rajasthan map-2004-1-19.pdf


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