Drilling Report

Cairn Energy PLC
07 June 2004



EMBARGOED FOR RELEASE AT 0700

                                CAIRN ENERGY PLC

                                                                     7 June 2004
                              N-A FIELD APPRAISAL
                                RAJASTHAN, INDIA

                     Operational Update - Block RJ-ON-90/1

Cairn announces the successful results of the first (N-A-2Z) and second (N-A-3)
appraisal wells on the N-A oil field in northern Rajasthan.

N-A-2Z was drilled from the N-A-1 discovery well surface location and deviated
200 metres away in an up-dip direction. N-A-3 was a down-dip appraisal well
drilled 1.5 kilometres south of N-A-1 and N-A-2Z.

The results of the first three wells on the N-A field demonstrate some
variability in reservoir thicknesses over the structure. N-A-1 encountered 55
metres of net high quality Fatehgarh sands with 15 metres of net oil pay. N-A-2Z
and N-A-3 encountered 60 metres and 39 metres respectively of net Fatehgarh
sands with 47 metres and 7 metres respectively of net oil pay. The oil down to
in the N-A-2Z and N-A-3 wells is consistent with the oil water contact (OWC)
determined from pressure readings in N-A-1.

Four Fatehgarh sand units in N-A-2Z, the bottom three of which had been water
bearing in the original N-A-1 well, were selected for open-hole drill stem tests
(DSTs). The first tested zone was from an excellent quality 5 metre basal sand
encountered just above the OWC. The second DST was from a 14 metre thick but
loosely consolidated sand, the third and fourth zones were from thinner 5 metre
and 3 metre sands respectively, with the objective of assessing their lateral
extent. Following mechanical problems with the open-hole DSTs the second and
third zones will be re-tested in cased hole at a later date to obtain
representative rates. Structurally higher reservoir units in N-A-2Z were not
tested as they were previously tested in the N-A-1 discovery well.

The following stabilised rates were obtained in the open hole DSTs:-

   • Zone 1 tested at 1,600 barrels of oil per day of 28 degrees API oil on a
    40/64 inch choke.
   • Zone 2 tested at 200 barrels of oil per day of 31 degrees API oil on a
    24/64 inch choke.*
   • Zone 3 tested at 450 barrels of oil per day of 30 degrees API oil on a
    24/64 inch choke. *
   • Zone 4 tested at 165 barrels of oil per day of 32 degrees API oil on a
    20/64 inch choke.

* Rates were restricted by sanding problems within the test string.

Additional Appraisal Activity

At least two additional appraisal wells, N-A-4 & 5 are planned during June and
July.

Bill Gammell, Chief Executive, commented:

'The results of the first two appraisal wells on N-A are consistent with our
initial views of the field. Further appraisal drilling and re-mapping,
incorporating recently acquired 2D seismic, is required before updating
volumetrics.'

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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