Prospect "R" - Major Gas Discovery on Block KG-DWN-98/2

26 June, 2001

Cairn has made a second gas discovery on Block KG-DWN-98/2 offshore Andhra Pradesh in Eastern India with its exploration well DWN-R-1. The well is located 26.5 kilometres south-south-west of the N-1 gas discovery, which was announced in March 2001. DWN-R-1 reached a total depth of 2,330 metres and encountered several gas pay zones below 1,870 metres.

Two drill stem tests ("DSTs") were carried out and flowed gas at a combined stabilised rate of 80 million standard cubic feet of gas per day ("mmscfd"). The flow rates were constrained by down hole tubing and surface test equipment limitations.

Initial reserve estimates are in the range of 0.75 to 1 trillion cubic feet ("Tcf") of dry gas. The R-1 discovery will be appraised by a second well to be drilled later this year.

The rig will now move to Prospect "P", approximately 12.5 kilometres north-west of DWN-R-1.


Bill Gammell, Chief Executive, commented:

"We are delighted to have this major discovery off the East Coast of India. We are continuing with an active exploration programme and are currently investigating the potential to commercialise this discovery."


Cairn Energy PLC:
Bill Gammell, Chief Executive Tel: 0131 475 3000
Dr Mike Watts, Exploration Director Tel: 0131 475 3000
Kevin Hart, Finance Director Tel: 0131 475 3000

Brunswick Group Limited:
Victoria Sabin, Mark Antelme Tel: 0207 404 5959

Notes to Editors:-

  1. "Cairn" where referred to in this release means Cairn Energy PLC and/or its subsidiaries, as appropriate.
  2. Two gas zones were tested in DWN-R-1 with the following results:-
    • DST-1: Stabilised rate of 42 mmscfd on a 64/64" choke.
    • DST-2: Stabilised rate of 38 mmscfd on a 64/64" choke.
  3. The gas tested in DWN-R-1 is dry methane and contains no carbon dioxide or hydrogen sulphide.
  4. Cairn holds a 100% equity interest in Block KG-DWN-98/2. In the event of a discovery ONGC has no back-in right as the Block falls under the terms of India's New Exploration Licensing Policy ("NELP").