NLG Arria Nlg Ords

RNS Number:6466S
Nelson Resources Limited
13 October 2005


13 October 2005

Nelson Resources Limited

NELSON RESOURCES AND LUKOIL ENTER INTO A DEFINITIVE AGREEMENT TO AMALGAMATE IN A
              US$2 BILLION OFFER FOR ALL OF THE SHARES OF NELSON;
          LUKOIL TO ACQUIRE SHARES OF NELSON'S PRINCIPAL SHAREHOLDERS

Toronto, Ontario, October 13, 2005 - Nelson Resources Limited ("Nelson") of
Bermuda (TSX/AIM: NLG) announced today that it has entered into a definitive
agreement with LUKOIL Overseas Holding Ltd. ("Lukoil") dated October 13, 2005 to
effect an amalgamation between Nelson and a wholly-owned subsidiary of Lukoil.
On the effective date of this amalgamation, all issued and outstanding common
shares of Nelson on a fully diluted basis will be exchanged for US$2 billion in
cash, resulting in a payment to shareholders of approximately US$2.1916 per
fully diluted share.

The transaction is subject to the approval of 75% of the votes cast by Nelson's
shareholders at a special meeting of shareholders expected to be held in late
November, 2005. Closing is subject to certain other conditions, including the
exercise, cancellation or termination of all outstanding options to acquire
shares of Nelson, the receipt of all requisite regulatory approvals and consents
necessary to consummate the amalgamation, and the resignation of each director
and officer of Nelson effective as of the effective date of the amalgamation.

The amalgamation agreement contains customary provisions prohibiting Nelson from
soliciting any other acquisition proposal but allows the Board of Directors of
Nelson to accept and recommend a superior proposal if it is required to do so to
avoid breaching its fiduciary duties and upon payment of a termination fee of
US$60 million. Under the agreement, Lukoil has the right to match any such
superior proposal.

Based on publicly disclosed information, Nelson understands that Lukoil has
entered into support agreements dated September 30, 2005 with Nelson's principal
shareholders - Central Asian Industrial Holdings N.V., Energy Investments
International Ltd., Cott Holdings Group Ltd., and Center Finance Ltd. Nelson is
advised that collectively, these shareholders own an aggregate of 584,643,162
common shares of Nelson (approximately 66.3% of the issued and outstanding
common shares of Nelson) and they have agreed to vote their shares in favour of
the amalgamation. Nelson has not been provided with copies of the agreements
between Lukoil and these shareholders.

Lukoil indicated that it proposes to acquire the 66.3% of Nelson's shares from
these principal shareholders as soon as possible.

The amalgamation agreement has been recommended by the Special Committee of the
Board of Directors of Nelson and has been approved by the Boards of Directors of
both Nelson and Lukoil's subsidiary.

BMO Nesbitt Burns is acting as financial advisor to the Special Committee and
has verbally delivered their fairness opinion to the Special Committee, which
found that as of October 11, 2005, the consideration to be received by minority
shareholders of Nelson pursuant to the subject offer is fair, from a financial
point of view.

Subject to receipt of shareholder approval of the transaction and satisfaction
of the conditions precedent to the amalgamation agreement, the proposed
transaction is expected to close in early December, 2005.

A telephone conference call to review the transaction is scheduled to take place
on Monday, October 17, 2005, at 2:00pm BST (1:00pm GMT, 9:00am EDT). There will
be a short presentation followed by a question and answer session.

To participate in the conference call, please dial:

   * From the UK: 0845 144 0016
   * From North America: 1-866-224-2914
   * From abroad: +44 1452 569 103

If you are unable to join the call, a replay will be available from Nelson's
website, www.nelsonresources.com, once the call has ended.

Nelson Resources Limited is an oil exploration and production company with
operations in the Republic of Kazakhstan. The Company established its presence
in the Kazakhstan oil sector in 2000 and its management team, comprising of both
international and Kazakh executives, has extensive experience of the Kazakh
operating and regulatory environment.

For further information, please contact:

Nelson Resources Limited
Nicholas Greene, Chief Financial Officer                   Tel: +44 20 7495 8908
ngreene@nelsonresources.co.uk

Fred Hodder                                                Tel: +44 20 7495 8908
fhodder@nelsonresources.co.uk

Investor Relations

Bell Pottinger Corporate & Financial (London)
Nick Lambert                                           Tel: +44 (0) 20 7861-3232

Cavalcanti Hume Funfer Inc. (CHF Inc., Toronto)
Olav Svela, Vice President                                  Tel: +1 416-868-1079
olav@chfir.com

If you prefer to receive press releases by e-mail, please contact Heather
Colpitts (heather@chfir.com) and specify "Nelson press releases" in the subject
line.

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED STATES. This news release does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities of the
Company in the United States. The securities of the Company have not been and
will not be registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any state securities laws and may not be
offered or sold within the United States or to U.S. persons unless registered
under the U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available.

The TSX neither approves nor disapproves of the information contained herein.

                                    - ENDS -




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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