Drilling Report

Cairn Energy PLC
17 May 2004






EMBARGOED FOR RELEASE AT 0700



                                CAIRN ENERGY PLC


                                                                    17 May 2004


                   MANGALA APPRAISAL WELLS IN RAJASTHAN, INDIA


                     Operational Update - Block RJ-ON-90/1



Cairn announces the successful results of the second and third appraisal wells
on the Mangala oil field in northern Rajasthan, and an upward revision of the
oil in place and reserve estimates.


The two appraisal wells, Mangala-2 and Mangala-3, are located respectively 3 km
northeast and 2.5 km south-southwest of the Mangala-1 discovery site.  Both
wells were designed as down-dip appraisal wells.  In encountering excellent
quality Fatehgarh sands similar to those found in previous wells, these
appraisal wells have established that the gross sand packages can be correlated
across the field.  Log, core and pressure information from all four Mangala
wells drilled to date confirms a single oil-water contact throughout the field.


Three additional Mangala up-dip delineation wells are to be drilled from new
surface locations. Mangala-4, located up-dip on the structure between Mangala-1
and Mangala-2, is currently operating and is expected to reach TD in May.  Wells
Mangala-5 and Mangala-6, to be located between Mangala-1 and Mangala-3, are both
expected to spud in May.


Following the initial phase of appraisal drilling there is improved confidence
in the Fatehgarh reservoir and aquifer continuity across the field.  The range
of estimates of oil-in-place for the Mangala field has been revised to 650 -
1100 million barrels.  It is too early in the evaluation process to be precise
on the appropriate field recovery factor however assuming secondary recovery by
water flooding of the reservoirs, the current recoverable reserve expectations
for the Fatehgarh range between 100 and 275 million barrels.


A full update of oil in place and reserve estimates will be announced following
completion of the appraisal programme.


Additional Appraisal Activity


Operations on the first N-A appraisal well, N-A-2, commenced on 28 April 2004
and are expected to be complete mid-May.  Two further appraisal wells are
planned for the N-A field 1.5km and 3km south respectively from the N-A-1
discovery well.


The 2D seismic programme across the northern area is almost complete and a 3D
seismic survey is planned to commence in June over the Mangala and N-A
discoveries.  A separate 3D survey will be planned over the southern part of the
N-C discovery.


Bill Gammell, Chief Executive, commented:


'Confirmation of the widespread distribution of excellent high-quality
reservoirs in the northern part of the Block is now emerging on both a field and
regional scale.  This augers well for our future activities.'






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              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.







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