Drilling Report

Cairn Energy PLC
10 August 2004


EMBARGOED FOR RELEASE AT 0700


                                CAIRN ENERGY PLC
                                                                  10 August 2004

                   FOURTH Oil Discovery in northern Rajasthan

                    N-V-1 Exploration Well, Block RJ-ON-90/1

Cairn announces a fourth significant oil discovery in northern Rajasthan with
the N-V-1 exploration well which is located 18 kilometres west-north-west of the
Mangala field, 19 kilometres west-south-west of the N-C discovery, and in close
proximity to the existing north-western boundary of the block.

The N-V-1 well, which is currently operating at a depth of 812 metres,
enountered an oil column of 62 metres with an estimated 35 metres of net oil pay
in excellent quality Fatehgarh sands. The well was drilled 90 metres down-dip
from the currently mapped crest of the structure. The top Fatehgarh was
encountered at 590 metres and an oil water contact was established in the well.

An open hole test programme has been carried out across one 10 metre interval
just above the oil water contact. The well flowed for around six hours and
produced oil to surface with a specific gravity of approximately 21 degrees API.
Oil flow rates were limited due to the oil density and viscosity combined with
the shallow depth and low pressure of the reservoir. As a result, a cased hole
test on pump will be required to determine the true formation productivity.

The mean oil initially in place as currently mapped is estimated to be
approximately 300 million barrels. However, the full extent of the structure is
unconstrained due to the paucity of seismic data off the block to the north.

As was the case with the N-C discovery, agreement with the Indian Government
will be required for a second extension area beyond the current north-western
block boundary before further appraisal.

Further details of Cairn's ongoing drilling programme in Rajasthan will be
provided at the time of the interim results announcement on Tuesday 7 September.

Bill Gammell, Chief Executive, commented:

'This is the fourth significant oil discovery Cairn has made in the northern
portion of the Rajasthan block this year. This further demonstration of the
widespread distribution of high quality reservoir sands bodes well for future
exploration and appraisal success.'


Enquiries to:

Cairn Energy PLC

Mike Watts, Exploration Director                      Tel: [phone]
Kevin Hart, Finance Director                          Tel: [phone]

Brunswick Group Limited:

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% interest in Block RJ-ON-90/1, which currently covers an 
     area of 5,831 square kilometres. Oil & Natural Gas Corporation Ltd ('ONGC') 
     has a right to 30% of any development area resulting from a commercial 
     discovery on the block.
     
3.   The main exploration play objectives encountered in the Rajasthan Basin, 
     commencing with the stratigraphically youngest formation, are: Thumbli, 
     Dharvi Dungar, Barmer Hill and Fatehgarh.

4.   'API' where referred to in this release means American Petroleum Institute 
     units as a measure of oil specific  gravity.



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