Pricing of Cairn India Flotat

Cairn Energy PLC
16 December 2006



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO, THE UNITED STATES,
CANADA, AUSTRALIA OR JAPAN



FOR IMMEDIATE RELEASE

16 December 2006




                                CAIRN ENERGY PLC

                    Pricing of Cairn India Limited Flotation



Cairn Energy PLC (the 'Company' or 'Cairn') announces the pricing for the
flotation of its Indian business, Cairn India Limited ('Cairn India'), on the
Bombay Stock Exchange Limited ('BSE') and the National Stock Exchange of India
Limited ('NSE').


Following a book building exercise, based on an offering document (the 'Red
Herring Prospectus'), Cairn has agreed and Cairn India has set an offer price
for the flotation of Rs 160 per Cairn India share. This implies a Cairn India
market capitalisation (including approximately US$ 600 million of the gross
proceeds to be retained by Cairn India) of approximately Rs 282.45 billion (or
approximately US$ 6.32 billion*) excluding any exercise of the over-allotment
option.


The flotation will involve the issue of approximately 538.47 million Cairn India
shares, excluding any exercise of the over-allotment option, comprising
approximately 209.67 million shares priced at Rs 160 per share pursuant to the
pre-flotation placement, and approximately 328.80 million shares priced at Rs
160 per share pursuant to the offer to the public (excluding any exercise of the
over-allotment option). Following the flotation, Cairn will own a 69.5% holding
in Cairn India (excluding any exercise of the over-allotment option).


Based on the price above, gross proceeds of the flotation (excluding any
exercise of the over-allotment option) would be Rs 86.16 billion (US$ 1.93
billion*). After taking into account the proportion of the gross proceeds to be
retained by Cairn India, expected to be approximately Rs 26.81 billion (US$ 600
million*), the gross proceeds expected to be received by Cairn (excluding any
exercise of the over-allotment option) would be approximately Rs 59.35 billion
(US$ 1.33 billion*).

A final offering document (the 'Prospectus') is expected to be published on 1
9 December 2006. Allotment of Cairn India shares is expected to take place on 
29 December 2006 with trading of Cairn India shares expected to commence in 
early January 2007. Further announcements relating to the Prospectus, allotment 
and commencement of trading of Cairn India shares will be made in due course.

ABN AMRO Rothschild and Merrill Lynch are acting as joint global coordinators 
and bookrunners and Morgan Stanley as bookrunner in relation to the flotation.


*Based on a US dollar to Rupee exchange rate of 1:44.686 (source: Financial
Times closing mid rate of exchange on 15 December 2006).


Sir Bill Gammell, Chief Executive of Cairn Energy PLC, said:


'I am delighted that Cairn has achieved this important milestone in the
flotation of our Indian business. This has been one of the biggest IPOs carried
out in the Indian markets and is a natural evolution for Cairn, building on more
than ten years of success in South Asia.


On completion of this transaction, Cairn India will be the largest independent
exploration and production company listed in India. With an estimated near
five-fold increase in production by the end of the decade combined with near
term potential in Rajasthan, Cairn India is poised to play an integral part in
meeting India's growing energy demand.


I firmly believe that, through the IPO, we have created a world-class business
which is ideally positioned to benefit from India's rapid economic growth.'



Enquiries to:
Analysts/Investors
Bill Gammell Chief Executive                            Tel: [phone]
Jann BrownFinance Director
Mike Watts Exploration Director

Media
David Nisbet, Head of Group Communications

Brunswick Group LLP:
Patrick Handley, Mark Antelme                           Tel: [phone]



Cairn India Limited ('Cairn India') proposes to undertake a public issue in
India and has filed a Red Herring Prospectus with the Securities and Exchange
Board of India.  This announcement is not an offer for sale, or a solicitation
of offers to purchase, the shares in Cairn India offered in the offering (the
'Shares') in any jurisdiction. No action will be taken to permit the Shares to
be sold in a public offer in any jurisdiction outside India. In particular, no
offer to the public will be made in any Member State of the European Economic
Area or in the United States. The Shares have not been and will not be
registered under the US Securities Act of 1933, as amended. This announcement
and the information contained herein are not for publication, distribution or
release in, or into, the United States, Canada, Australia or Japan.



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