Cairn Makes 3rd Discovery in Northern Rajasthan

Cairn has made a potentially significant oil discovery in Rajasthan on block RJ-ON-90/1 with the N-C-1 exploration well which is located 12 kilometers north of Mangala, 70 kilometers north of Saraswati and 300 meters from the present northern boundary of the block.

The N-C-1 well, which reached a total depth of 1,032 meters, encountered an oil column of 18 meters gross in the Fatehgarh formation, with an estimated 5.4 meters of net oil pay. The Fatehgarh formation has a gross section of 274 meters containing 165 meters of excellent high quality sands. On current mapping the well is at least 250 meters down-dip from the nearest potential structural crest which lies to the north of the present block boundary. An oil water contact has been established in the well.

An open hole test program has been carried out across one reservoir unit just above the oil water contact. The well flowed at a variable rate for around six hours and produced oil with a specific gravity of approximately 15 degrees API. Oil flow rates were limited due to the high oil density and viscosity combined with the shallow depth of the reservoir. This means that pumping will be required to conduct a test representative of the true formation productivity, which is believed to be high based on the excellent petrophysical characteristics observed from log and wireline formation test data.

Preliminary estimates of oil in place for the N-C-1 discovery necessarily cover a very wide range. This reflects current uncertainty on the up-dip sealing mechanism and the need for additional seismic, which will now be immediately acquired. Assuming a purely structural trap the preliminary mean oil in place estimate for the field is approximately 400 million barrels. Further appraisal up-dip of this discovery is necessary for confirmation of the oil in place estimate and the associated recoverable reserves.

Under the terms of the PSC, agreement with the Indian Government will be required on the shape and size of an extension area beyond the current block boundary before appraisal drilling can commence.

Other Exploration & Appraisal Activities in Rajasthan

The N-F-1 exploration well, located 32 kilometers southwest of Mangala, was plugged and abandoned on April 16th. The well encountered a thick sequence of tight Fatehgarh sands with strong oil shows but with no primary porosity preserved.

The next exploration wells are scheduled to commence in end May for the central area and mid June for the northern area.

Further appraisal drilling on the Mangala and N-A oil fields is due to commence before end April.

Bill Gammell, Chief Executive, commented:

"I am very pleased to announce our third exploration success in the northern part of the Rajasthan block, where we have three active drilling rigs with a fourth on the way. N-C-1 firmly establishes the widespread distribution of excellent reservoirs across the north eastern area, which bodes well both for the continued exploration program and the impending appraisal of existing discoveries."