Cairn Energy has stated it has made a significant oil discovery in its N-B-1 exploration well in the onshore northern Rajastan Basin in India. Analysts have predicted the field could have a net after tax value of $500 million.

The company purchased the land on which the oil was found 18 months ago off Shell for $7million.

The well, located 60 kilometres north of Saraswati, is presently at a depth of 1,250 meters, although it has not yet reached the planned total depth. The well has encountered two separate reservoir sections: the Barmer Hill Reservoir and the Fatehgarh Reservoir.

The company estimates that the oil in place of this discovery range from 450 to 1,100 million barrels. Preliminary reserve estimates are in the 50 to 200 million barrel range.

Commenting on the discovery, Bill Gammell, Chief Executive, stated: Whilst further evaluation and appraisal is required I am confident that this discovery in isolation has the potential to transform the value of Cairn’s portfolio.