Capricorn Energy PLC Regulatory News (CNE)

FOR IMMEDIATE RELEASE 22 January 2019

CAIRN ENERGY PLC

Operational Update

("Cairn" or "the Company")

Ahead of announcing its preliminary results for the year to 31 December 2018 on 12 March 2019, Cairn today provides an update on its operations and trading performance together with guidance for 2019. This information is unaudited and subject to further review.

Simon Thomson, Chief Executive, Cairn Energy PLC said:

"Cairn enters 2019 with balance sheet strength and cash flow from North Sea production to fund significant growth opportunities.

The SNE and Nova development projects are progressing on track, evaluation of the recent Agar discovery is ongoing and we look forward to commencing a material exploration drilling programme in 2019 with up to seven wells offshore Mexico, the UK and Norway targeting a total gross volume in excess of one billion barrels.

We also expect a final international arbitration decision on our India claim in the near term and we remain confident of our position."

Production

Ø Combined production net to Cairn from the Catcher and Kraken fields in 2018 averaged ~17,500* boepd

Ø Catcher (Cairn 20% WI) averaged 43,000 boepd (gross) in 2018

Ø Kraken (Cairn 29.5% WI) averaged 30,300 boepd (gross) in 2018

Ø Full year production, net to Cairn, for 2019 is estimated to be 19,000 to 22,000* boepd

Corporate and Finance

Ø Oil and gas sales revenue was ~US$395m at an average realised price of US$68/boe (before hedging costs of US$1.34/boe)

Ø Average production cost was ~US$20 per boe

Ø Group cash at year end was US$66m

Ø Oil sales receivable at year end was US$39m

Ø Year end Norway exploration tax receivable was US$32m, with US$27m drawn under the Norway Exploration Finance Facility

Ø The company's US$575m Reserves Based Lending facility was US$85m drawn at year end: loan maturity now extended to 2025

Ø Capital expenditure during the year was US$335m, in line with guidance;

Ø Cash outflows in respect of these activities in 2018 were ~US$260m (~US$170m development and pre-development expenditure, ~US$90m exploration and appraisal expenditure)

Ø Remaining cash outflows in respect of these activities post year end are expected to be ~US$75m

Ø Capital expenditure for 2019 is currently forecast at ~US$305m;

Ø Kraken, Catcher, Nova and pre-FID costs in Senegal of ~US$135m

Ø Current forecast exploration and appraisal expenditure of ~US$170m

Ø To date, Cairn has hedged ~2.7m barrels of 2019 oil production using collar structures with a weighted average floor price of ~US$67/bbl and a weighted average ceiling price of ~US$83/bbl

Developments

Ø In Senegal, the SNE Field Development (Cairn 40% WI) is on track with the Final Investment Decision targeted for mid-2019. The phased Field Development and Exploitation Plan has been submitted to the Government of Senegal with first production targeted in 2022. Woodside has assumed the role of development operator as planned and the project finance process has been successfully launched.

Ø In Norway, the Nova Field Development (Cairn 20% WI) in the Norwegian North Sea is on track with all key development contracts awarded and execution activities commenced. Nova is expected to deliver first oil from 2021 with peak production of 50,000 bopd (10,000 bopd net to Cairn).

Ø In the UK, project sanction is targeted in 2019 for the near-field Catcher discoveries identified as potential subsea tie-backs to maintain and extend plateau production. Further evaluation of the development options for the Agar discovery is being undertaken during H1 by the partners to establish commerciality of the discovery and broader exploration potential. (Cairn has an option to take over Operatorship of the discovery (50% WI).

Exploration

Ø In the UK and Norway, up to four exploration wells are planned in 2019 across a variety of play types with material prospects and equity interests: Presto (Cairn 30% WI) expected to spud shortly, Lynhaug (Cairn Operator 50% WI), Godalen (Cairn Operator 40% WI) and Chimera (Cairn Operator 60% WI) all expected to spud in Q3 2019.

Ø In Mexico, three exploration wells are planned in shallow water Gulf of Mexico for Q3 and Q4 2019. In Block 9 (Cairn Operator 65% WI) drilling operations on the first well are expected to commence in Q3, followed by the second well in Q4 2019. In Block 7, (Cairn 30% WI) drilling is planned for Q3 2019.

Ø In Suriname (Cairn 100% WI) a 4,150km 2D seismic acquisition commenced in January 2019 and in Côte d'Ivoire (Cairn 30% WI) 2D seismic acquisition is expected to commence in Q3 2019.

India

Ø All submissions and procedural steps for the international arbitration under the UK-India Bilateral Investment Treaty (the "Treaty") are now complete

Ø Drafting of the final award by the Tribunal is ongoing

Ø Cairn's claim under the Treaty is for monetary compensation of ~US$1.4 billion, the sum required to reinstate the company to the position it would have been in, but for the actions of the Indian Income Tax Department since January 2014

Ø Cairn continues to have a high level of confidence in the merits of its claims in the arbitration

*FlowStream's production entitlement in 2018 averaged ~1,360 bopd and is expected to be 1,350 to 1,575 bopd in 2019

About Cairn Energy PLC

Cairn is one of Europe's leading independent oil and gas exploration and development companies and has been listed on the London Stock Exchange for 30 years. Cairn has explored, discovered, developed and produced oil and gas in a variety of locations throughout the world as an operator and partner in all stages of the oil and gas lifecycle.

Cairn's exploration activities have a geographical focus in North West Europe, West Africa and Latin America, underpinned by interests in production and development assets in the North Sea. Cairn has its headquarters in Edinburgh, Scotland supported by operational offices in London, Norway, Senegal and Mexico.

For further information on Cairn please see: www.cairnenergy.com

Glossary

bopd barrels of all per dayboepd barrels of oil equivalent per dayboe barrels of oil equivalentbbl barrel of oilWI working interestm million