Drilling Report

Cairn Energy PLC
24 October 2001

EMBARGOED UNTIL 0700


                                                               24 October 2001


                               CAIRN ENERGY PLC

                            Indian Drilling Update

                          Prospect 'M' Oil Discovery


Block KG-DWN-98/2 - Prospect 'M'


Cairn has made a fourth consecutive hydrocarbon discovery on Block KG-DWN-98/2
offshore Andhra Pradesh in Eastern India with its exploration well DWN-M-1ST.


The well is located on a large anticline approximately 10 kilometres
north-west of the Annapurna gas field and approximately 11 kilometres
north-east of and on trend with the Cairn DWN-P-1 oil discovery, which flowed
3,648 barrels of oil per day. The well was drilled in water depths of around
500 metres and reached a total depth of 2,722 metres and encountered two
hydrocarbon bearing units. The first unit comprised thin gas bearing sands.
The deeper second unit contained a 46 metre gross hydrocarbon bearing interval
including a 40 metre oil column between a defined gas oil contact and an oil
water contact.


Preparations for a test on the oil bearing reservoir have commenced, the
results of which will be announced in due course.


Block RJ-ON-90/1 - Prospect 'H'


Exploration well RJ-H-1 on Block RJ-ON-90/1 onshore Rajasthan is currently
operating at around 1,800 metres and has not yet reached total depth.


The prognosed shallow targets were absent in the well. At deeper levels, below
1,400 metres, several low porosity hydrocarbon reservoirs have been
encountered, for which a testing programme is being planned. Test results will
be announced separately.


Block CB/OS-2 - Lakshmi Development Drilling


The Trident 12 jack-up drilling rig has cleared Indian customs and has
commenced a six well development drilling programme from two previously
installed jackets as part of the Lakshmi gas field development project. Each
of the development wells is planned to drill into the previously untested oil
leg across the structure.


Ravva - Development Drilling


The first of three development wells in the Ravva development drilling
programme, RF-5, encountered reservoirs as expected and is currently being
completed as an oil producer. The programme, which also comprises two
workovers and the tie-back and completion of a prior discovery well, is
expected to be completed in Q1 2001.




Enquiries:-


Cairn Energy PLC:


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


Brunswick Group Limited:

Victoria Sabin, Mark Antelme, Catherine Bertwistle        Tel: [phone]




Notes to Editors:-





 1. 'Cairn' where referred to in this release means Cairn Energy PLC and/or its
    subsidiaries, as appropriate.


 2. Cairn holds a 100% equity interest in Block KG-DWN-98/2. In the event of a
    commercial discovery Oil & Natural Gas Company Ltd. ('ONGC') has no
    back-in right as the block falls under the terms of India's New
    Exploration Licensing Policy.


 3. Cairn holds a 50% equity interest in Block RJ-ON-90/1. The remaining 50% is
    held by Shell India Production Development B.V. ('Shell'). ONGC has a
    right to 30% in the event of a commercial discovery on the block. If ONGC
    exercise this right, Cairn and Shell's equity interests in the block would
    reduce from 50% to 35%.


 4. Cairn's holds a 50% interest in the ring-fenced Lakshmi gas discovery in
    Block CB/OS-2. The remaining interests are held by ONGC (40%) and TATA
    Petrodyne Limited (10%).


 5. Cairn holds a 22.5% equity interest in Block PKGM-1 (Ravva). The remaining
    interests are held by ONGC (40%), Videocon Petroleum Limited (25%) and
    Ravva Oil (Singapore) Pte Limited (12.5%).