2009 Half-Yearly Report Announcement

25  August  2009

OPERATIONAL HIGHLIGHTS

• Gross operated production for H1 2009: 68,941 boepd (H1 2008 : 80,873 boepd)
• Average net entitlement production for H1 2009: 11,573 boepd (H1 2008 : 13,886 boepd)

India

• Inauguration of the Mangala field and production start up scheduled for August 2009 – trial runs commenced for Train One
• Pricing agreed with Government of India (GoI) nominated buyers for initial volumes of crude from Mangala representing a 10-15% discount to Brent on the basis of prices prevailing for the six months to June 2009
• Key GoI approvals received:
• Revised Mangala Field Development Plan incorporating pipeline and higher processing capacity of 205,000 barrels of oil per day (bopd)
• Mangala, Bhagyam, Aishwariya (MBA) plateau production of 175,000 bopd
• Multiple delivery points
• Construction of Mangala Processing Terminal (MPT) on going with scope for expansion
• Pipeline construction ongoing with flexibility to accommodate growing production

Greenland

• Initial 14 prospect and lead inventory for Disko blocks offshore western Greenland confirms multi-billion bbl unrisked exploration potential
• East Greenland prospecting licence awarded; 2D seismic survey (~4,000 km) underway
• 2009 programme ongoing with five vessels currently acquiring data offshore west, south and east Greenland.

FINANCIAL HIGHLIGHTS

• Loss after tax, before exceptional item, of $20m (H1 2008: profit $17m)
• Exceptional provision for Ravva arbitration, net of tax, $55m
• Group net cash at 30 June 2009 $631m (H1 2008 : $1,177m)

Sir Bill Gammell, Chief Executive said: 

"We are delighted that production from Mangala in Rajasthan is due to commence this week at a Government of India inauguration ceremony. This is a major milestone for the Cairn Group. The current planned plateau production from the key fields is 175,000 bopd and we believe there is substantial scope for further growth from the existing fields, from Enhanced Oil Recovery and the expansion of the resource base. We are excited by the frontier exploration position established offshore Greenland which provides Cairn with potential for future material exploration success.”

Enquiries:

Cairn Energy Live Audio Webcast

The webcast of the 2009 preliminary results presentation will be available at 0900 (UK time) on Tuesday 25 August 2009 on the Cairn Energy PLC website: www.cairnenergy.com  An archived version of the webcast will be available later.

 These materials contain forward-looking statements regarding Cairn, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward-looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are, by their nature, subject to significant risks and uncertainties and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn's expectations with regard thereto or any change in circumstances or events after the date hereof.

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