Cairn Successful on 2nd & 3rd Appraisal Wells in Mangala

Cairn announces the successful results of the second and third appraisal wells on the Mangala oil field in northern Rajasthan, and an upward revision of the oil in place and reserve estimates.

The two appraisal wells, Mangala-2 and Mangala-3, are located respectively 3 km northeast and 2.5 km south-southwest of the Mangala-1 discovery site. Both wells were designed as down-dip appraisal wells. In encountering excellent quality Fatehgarh sands similar to those found in previous wells, these appraisal wells have established that the gross sand packages can be correlated across the field. Log, core and pressure information from all four Mangala wells drilled to date confirms a single oil-water contact throughout the field.

Three additional Mangala up-dip delineation wells are to be drilled from new surface locations. Mangala-4, located up-dip on the structure between Mangala-1 and Mangala-2, is currently operating and is expected to reach TD in May. Wells Mangala-5 and Mangala-6, to be located between Mangala-1 and Mangala-3, are both expected to spud in May.

Following the initial phase of appraisal drilling there is improved confidence in the Fatehgarh reservoir and aquifer continuity across the field. The range of estimates of oil-in-place for the Mangala field has been revised to 650 – 1100 million barrels. It is too early in the evaluation process to be precise on the appropriate field recovery factor however assuming secondary recovery by water flooding of the reservoirs, the current recoverable reserve expectations for the Fatehgarh range between 100 and 275 million barrels.

A full update of oil in place and reserve estimates will be announced following completion of the appraisal program.

Additional Appraisal Activity

Operations on the first N-A appraisal well, N-A-2, commenced on April 28, 2004 and are expected to be complete mid-May. Two further appraisal wells are planned for the N-A field 1.5km and 3km south respectively from the N-A-1 discovery well.

The 2D seismic program across the northern area is almost complete and a 3D seismic survey is planned to commence in June over the Mangala and N-A discoveries. A separate 3D survey will be planned over the southern part of the N-C discovery.

Bill Gammell, Chief Executive, commented:

"Confirmation of the widespread distribution of excellent high-quality reservoirs in the northern part of the Block is now emerging on both a field and regional scale. This augers well for our future activities."