Initial Purchase Offer

Cairn Energy PLC
04 April 2007



                                                                    4 April 2007

Not for release, publication or distribution in whole or in part outside of the
EU and/or EEA

Hoare Govett Limited ('Hoare Govett')

Cairn Energy PLC ('Cairn Energy') - Initial Purchase Offer for B Shares

Hoare Govett (acting as agent for ABN AMRO Bank N.V., London Branch) hereby
makes the Initial Purchase Offer (referred to in the circular from Cairn Energy
to its Shareholders dated 27 February 2007 (the 'Circular')) acting as
principal, to purchase the 70,685,003 B Shares in respect of which valid
elections in respect of the Initial Purchase Offer have been received and not
withdrawn. Accordingly, such offer is to purchase those B Shares for £3.00 each,
free of all dealing expenses and commissions, in an off-market transaction on
the terms set out in the Circular.

Settlement of the purchase of the B Shares purchased under the Initial Purchase
Offer will be made on 11 April 2007 when cheques will be dispatched to
Shareholders whose B Shares are held in certificated form (that is, not in
CREST) and the CREST accounts of Shareholders whose B Shares are held in
uncertificated form (that is, in CREST) will be credited with the proceeds of
sale.

All definitions used in the Circular apply to this announcement.
This announcement has been issued by Hoare Govett which is regulated in the
United Kingdom by the Financial Services Authority.


Enquiries:

Hoare Govett: Bertie Whitehead / Tom Perry
              Telephone [phone]

Hoare Govett Limited is acting as broker to Cairn Energy PLC and is acting for
no one else in connection with the Return of Cash and will not be responsible to
anyone other than Cairn Energy PLC for providing the protections afforded to
customers of Hoare Govett Limited nor for providing advice in connection with
the Return of Cash or the contents of this announcement or any other matter
referred to herein.

This announcement does not constitute an offer to sell, invitation to underwrite
or subscribe for any securities or  investment advice in any jurisdiction.
Nothing in this announcement should be taken as constituting an offer of shares 
in Cairn Energy PLC.

This announcement is not for release, publication or distribution, directly or
indirectly, outside of the EU and/or EEA  or in or into any jurisdiction in
which the same would be unlawful. This announcement does not constitute an offer
to  sell or issue, or the solicitation of an offer to buy or subscribe for,
securities outside of the EU and/or EEA or in  any jurisdiction in which such
offer or solicitation is unlawful.

The distribution of this announcement in or into jurisdictions other than the
United Kingdom may be restricted by local law and therefore persons into whose
possession this announcement or the Circular come should inform themselves about
and observe such restrictions. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction.

None of the B Shares have been or will be registered under the US Securities
Act, as amended or the securities laws of any other United States jurisdiction,
and none of them may be offered or sold in the United States unless pursuant to
an exemption from or in a transaction not subject to the registration
requirements of the US Securities Act or unless pursuant to a transaction that
has been registered under the US Securities Act and the securities laws of any
other relevant United States jurisdiction.

Neither the B Shares nor this announcement have been approved, disapproved or
otherwise recommended by the SEC or any United States state securities
commission or any non-United States securities commission or regulatory
authority nor have such authorities confirmed the accuracy or determined the
adequacy of this announcement or the Circular. Any representation to the
contrary is a criminal offence in the United States.



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