Cairn Announces Successful Well at Lakshmi

Following the recent discovery and testing of well LA-2 which flowed oil at 10,500 bopd, Cairn announces that the follow-up Lakshmi oil step-out well (CB-A-3) has reached a total depth of 1,390 meters. The well was drilled approximately three kilometers from the LA-2 well location and successfully encountered up to 13 meters of high quality net oil bearing reservoir below the Lakshmi gas field. This reservoir is the best developed oil sand encountered to date in the Lakshmi wells.

Since all of the required technical information was gathered from the test conducted at LA-2 and other nearby wells there is no requirement to conduct further testing on the sand encountered in CB-A-3. Each of the seven wells which have penetrated this stratigraphic interval below the Lakshmi gas field have encountered net oil pay.

Further oil appraisal drilling to delineate the potential oil development area beneath Lakshmi is planned for the end of the year after the monsoon season. In the meantime, studies for a conceptual staged development are being initiated.

Revised oil in place estimates for the Lakshmi field are between 100 and 300 mmbbls. The CB-A-3 well result has also highlighted the potential for additional oil prospectivity in the south-east of the block.

Bill Gammell, Chief Executive, commented: 'I am delighted that this well has significantly increased our confidence for a commercial oil development at Lakshmi. I look forward to further exploration, appraisal and development drilling on this block later in the year.'