Cairn India's 40% Shareholding Sale Transaction With Vedanta Nears Completion

HIGHLIGHTS

• Sale of 40% shareholding of the fully diluted share capital in Cairn India Limited (CIL) to Vedanta Resources plc (Vedanta) to be completed in two stages:

1. the first tranche of 10% which realised ~$1.4 billion completed July 2011
2. the second tranche of 30%, approved by the Government of India (GoI) in June, subject to certain conditions, will realise ~$4 billion

• Two of the GoI conditions - Cess and Royalty payable - are currently with CIL shareholders for approval, Cairn has voted to accept these conditions, with voting results due on 14 September 2011
• The Mangala field is currently producing at a rate of 125,000 barrels of oil per day (bopd): Bhagyam development on track; scheduled to commence production in Q4 2011
• Multi well, multi basin Greenland exploration campaign ongoing, using two rigs
• Gross operated production: 166,527 boepd (H1 2010: 87,523 boepd)
• Average net entitlement production: 77,056 boepd (H1 2010: 32,866 boepd)
• Group revenue on a continuing basis $1.3 billion (H1 2010: $333 million)
• At 30 June 2011, the Group had net cash of $1,003 million (H1 2010: $267 million). CIL had net cash of $1,048 million, comprising $1,452 million cash and $404 million debt. PLC/Capricorn had net debt of $45 million, comprising $75 million cash and $120 million debt.

Simon Thomson, chief executive, Cairn Energy PLC said: "Cairn is encouraged that the Vedanta transaction is moving towards completion. Following approval from the Government of India, all parties are now working to satisfy the consents and conditions to complete the sale to Vedanta as soon as possible.

"The sale of Cairn's 40% stake will allow a return of substantial funds to shareholders and will also provide the Group with the balance sheet strength and financial flexibility to explore new opportunities in line with its consistent strategy of seeking transformational growth.

"We are excited about the exploration potential of the multiple frontier basins offshore Greenland. Cairn's entrepreneurial approach to exploration has allowed it to build a leading early entry position in Greenland where we look forward to further results from the 2011 season."

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