Drilling Report

Cairn Energy PLC
14 December 2000

                          CAIRN ENERGY PLC ('Cairn')      

                     Successful Lakshmi Appraisal Well  -  
   Cumulative Flow Rate of 103.3 million standard cubic feet of gas per day   
                                  ('mmscfd')         
                                                          
                                                        
Cairn announces that it has completed an extensive test programme on the
CB-A-2 appraisal well ('CB-A-2') on Block CB-OS/2, offshore Gujarat, West
India, utilising the drilling unit 'Noble Chuck Syring'. CB-A-2 is a 4.5 km
step-out appraisal of the Lakshmi gas discovery, announced by Cairn on 16 May
2000. The well encountered multiple hydrocarbon pay zones between 750 metres
and 1250 metres.

Four zones were tested with a cumulative flowrate of 103.3 mmscfd*.  The gas
contained no carbon dioxide or hydrogen sulphide. A thin interval of
oil-bearing reservoir was also encountered but not tested, confirming an oil
leg across the structure. Following initial evaluation of the appraisal well,
Cairn estimates that the Lakshmi Field contains P50 proved plus probable gas
reserves in the region of 300 to 400 billion cubic feet. The appraisal well
has confirmed a complex reservoir distribution across the structure. As part
of the development programme, a 3D seismic survey is planned for 2001 to
further evaluate and delineate the field. 

The drilling unit will now be moved from CB-A-2 to exploration prospect 'E' on
Block CB-OS/2 which is approximately 20 km north of Lakshmi.

Work is progressing on schedule in respect of the development of the Lakshmi
Field and Cairn expects the commencement of gas deliveries in Q1 2002.

A further update on operations and results on Block CB-OS/2 will be provided
in due course.

Bill Gammell, Cairn's Chief Executive commented:

'We are delighted to have successfully appraised the Lakshmi discovery,
demonstrating the high deliverability of the reservoirs and confirming the
Field's commerciality.'


Enquiries:-

Cairn Energy PLC:

Bill Gammell, Chief Executive                           Tel: [phone]
Kevin Hart, Finance Director                            Tel: [phone]
Dr Mike Watts, Exploration Director                     Tel: [phone]

Brunswick Group Limited:

Victoria Sabin                                          Tel: [phone]
Melissa Miller                                          Tel: [phone]


Notes to Editors:-

1. Cairn holds a 75% equity interest in Block CB-OS/2 and is Operator for the
Joint Venture which includes TATA Petrodyne Limited (15%) and ONGC (10%). ONGC
has a right to increase its stake by 30% in the event of a commercial
discovery on the Block. If ONGC exercise this right, Cairn's equity interest
in the Block would reduce from 75% to 50%.
 
2. 'Cairn' where referred to in this release means Cairn Energy PLC and/or its
subsidiaries, as appropriate.

3. *Four zones were tested with the following results:-

DST-1 Stabilised rate of 28.2 mmscfd on an 80/64' choke at a flowing well head
pressure of 906 psi. In addition, the well flowed a small amount of
condensate.

DST-2 Stabilised rate of 28.6 mmscfd on a 96/64' choke at a flowing well head
pressure of 775 psi.

DST-3 Stabilised rate of 21.6 mmscfd on a 64/64' choke at a flowing well head
pressure of 864 psi.

DST-4 Stabilised rate of 24.9 mmscfd on a 96/64' choke at a flowing well head
pressure of 584 psi.