Drilling Report

Cairn Energy PLC
08 July 2004


EMBARGOED FOR RELEASE AT 0700



                                CAIRN ENERGY PLC
                                                                     8 July 2004

                        COMPLETION OF APPRAISAL DRILLING
                      MANGALA OIL FIELD, BLOCK RJ-ON-90/1
                                RAJASTHAN, INDIA


Following the drilling of the Mangala-5 and Mangala-6 appraisal wells, Cairn
announces the successful conclusion of its appraisal drilling campaign on the
Mangala oil field in northern Rajasthan.

Mangala-5 was drilled up-dip 1.5 kilometres from the Mangala-1 discovery well
and two kilometres from Mangala-3. The well encountered 125 net metres of
excellent high quality oil bearing Fatehgarh sands. In addition, an oil column
of 30 metres was encountered in fractured basement above the field oil water
contact.

Mangala-6 was drilled two kilometres from Mangala-5 and 750 metres from
Mangala-3 at the southern end of the field. The well encountered 69 net metres
of excellent high quality oil bearing Fatehgarh sands.

In Mangala-5, the following stabilised rates were obtained in open hole drill
stem tests. Zone 1 was from a basal zone not previously tested in other Mangala
wells.

   • Zone 1 flowed at 1,786 bopd on a 80/64 inch choke
   • Zone 2 flowed at 2,153 bopd on a 72/64 inch choke

An interference test was conducted between Mangala-1 and Mangala-5, which
successfully established reservoir connectivity through the oil leg between the
two locations. This result, following the previously announced successful
interference test between Mangala-1 and Mangala-4, confirms the excellent
distribution and connectivity of the reservoir sands across the Mangala field.

A 3D seismic survey over the Mangala and NA fields commenced at the end of May
and is due to complete in Q4 2004.

An update on Mangala pre-development oil in place volumes and reserve estimates
will be provided at the time of Cairn's interim results announcement, which is
scheduled for Tuesday 7 September 2004.

Bill Gammell, Chief Executive, commented:

'I am delighted with the success of the appraisal well campaign at Mangala. In
particular, we have now confirmed continuity and connectivity of excellent
reservoirs across the field, which is positive for the determination of ultimate
recovery.

Work on the Mangala Field Development Plan is continuing at pace, with first
production planned for late 2007.'



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.



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