Cairn Files India Prospectus

Cairn Energy PLC (Cairn) said that, in preparation for the flotation of its Indian business on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited, its Indian subsidiary, Cairn India Limited (Cairn India) on Friday filed with the Registrar of Companies (RoC), an offering document (the Prospectus) in relation to the proposed flotation, in accordance with regulatory requirements.

The Prospectus reflects, among other things, the final issue price of Rs. 160 per share for the 328,799,675 Cairn India shares being publicly offered in the flotation and over-allotments by DSP Merrill Lynch Limited as stabilizing agent of 33 million further Cairn India shares at this price. In connection with the issue, the stabilizing agent may undertake stabilizing transactions with a view to supporting the market price of Cairn India shares in the period commencing on the obtaining of trading permission from the stock exchanges referred to above and ending 30 calendar days thereafter, unless terminated earlier. The stabilizing agent has been granted an option to acquire further shares from Cairn India to cover over-allotments that are not covered by stabilizing transactions. There is no assurance that stabilization will be undertaken and, if commenced, it may be discontinued at any time.

Allotment of Cairn India shares is expected to take place on 29 December 2006 with trading expected to commence in early January 2007. Further announcements relating to the allotment and commencement of trading of Cairn India shares will be made in due course.

ABN AMRO Rothschild and Merrill Lynch are acting as joint global coordinators and bookrunners and Morgan Stanley as bookrunner in relation to the flotation.