Transaction in Own Shares

Cairn Energy PLC
05 April 2007


EMBARGOED FOR RELEASE AT 0700



                                                                    5 April 2007





                           CAIRN ENERGY PLC ('Cairn')


            Transaction in Own Shares - Initial Purchase of B Shares



The terms of the Return of Cash approved by Shareholders on 22 March 2007
enabled Shareholders to sell some or all of their B Shares at £3.00 per B Share,
free of all dealing expenses and commissions, through the Initial Purchase Offer
made by Hoare Govett Limited as agent for ABN AMRO Bank N.V., London Branch
('ABN AMRO'). Elections to accept the Initial Purchase Offer were received in
respect of 70,685,003 B Shares, representing approximately 44.0 per cent. of the
B Shares. These B Shares were purchased by the Company from ABN AMRO yesterday
for an amount equal to £3.00 per B Share plus the total stamp duty and stamp
duty reserve tax payable by ABN AMRO in respect of its purchase of B Shares and
were cancelled by the Company after purchase.



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




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