Transaction in Own Shares

Cairn Energy PLC
18 May 2007


EMBARGOED FOR RELEASE AT 0700



                                                                     18 May 2007





                        CAIRN ENERGY PLC ('the Company')


                           Transaction in Own Shares



The Company has today purchased for cancellation 86,908,764 Deferred Shares,
being all of the Deferred Shares in the Company in issue, for a total
consideration of one pence pursuant to Article 7B of its Articles of Association
and the authority granted by shareholders at its Annual General Meeting held on
17 May 2007. The Deferred Shares were created on 4 April 2007 by the conversion
of the B Shares on which the Single B Share Dividend was declared.


Terms defined in the Circular to Shareholders dated 27 February 2007 have the
same meaning when used in this announcement.




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