NLG Arria Nlg Ords

    24 November 2004

TSX / AIM: NLG

                      NELSON RESOURCES LIMITED ANNOUNCES
                      WINNING BID FOR 50% OF ARMAN FIELD

Nelson Resources Limited ("Nelson" or the "Company"), a leading independent oil
exploration and production company operating in Kazakhstan, today announced that
at an auction by the Kazakh state oil company Kazmunaigas, Nelson submitted the
highest bid for a 50% interest in the Arman Field. The bid remains subject to
pre-emption rights previously granted to the existing stakeholder, Shell
Kazakhstan Development B.V., and Nelson has not yet entered into definitive
agreements in respect of the bid. Shell must exercise its pre-emption right by
no later than 24 December 2004. Should Shell choose not to exercise its right,
Nelson will enter into a definitive agreement with Kazmunaigas within 15 days
subsequent to the announcement of this decision.

Arman Field
-----------
The Arman field is located on the Caspian shoreline, 200 kilometres north of
Aktau, and is operated by Arman LLP, a joint venture currently owned 50% by
Shell Kazakhstan Development B.V. (holding operating responsibility) and 50% by
Kazmunaigas. The field is 30km north of North Buzachi field, in which Nelson has
a 50% interest. Development of the Arman field began in 1994, and has included
the use of advanced drilling technologies such as hydro-fracturing and cluster
drilling, as well as the construction of first class processing facilities with
significant spare capacity. It is currently a mature producing field, and has
direct pipeline access to key export transportation routes including the
Atyrau-Samara and CPC pipelines.

The Arman field has total estimated remaining reserves of approximately
10.8 million barrels of oil (as at 1 January 2004, Kazmunaigas estimate), and
is currently producing approximately 4,500 barrels of oil per day (Kazmunaigas
estimate). Nelson's bid was for $10.8 million, which if successful it will 
finance from existing cash resources.

Nick Zana, Nelson's Chief Executive Officer, commented, "It has been a stated
aim of our strategy to grow via the acquisition of additional reserves, as well
as to grow organically. Acquisition of a share in the ownership of the Arman
field is consistent with that and represents an exciting opportunity for
Nelson."

Strategic Rationale
-------------------

Part of Nelson's aim to grow by acquisition is underpinned by the rationale that
newly acquired oil assets;

- Provide increased reserves - successful acquisition of this stake would
  materially improve Nelson's current interests in net proved and probable
  reserves;
- Increase current production - this acquisition would immediately improve
  Nelson's current rates of production;
- Help to build a strategic portfolio of assets - by acquisition of an interest
  in the Arman field which is at an advanced stage of development and requires
  little further capital expenditure, Nelson would create a balanced portfolio of
  onshore producing fields.

 

For further information, please contact:
----------------------------------------
Nick Zana, CEO                  Tel: 020 7495 8908
Nelson Resources Limited        nzana@nelsonresources.co.uk

Fred Hodder, CFO                Tel: 020 7495 8908
Nelson Resources Limited        fhodder@nelsonresources.co.uk

Investor Relations:

Ann-marie Wilkinson / Nick Lambert      Tel: 020 7861 3232
Bell Pottinger Corporate & Financial (London)   
    

Notes
-----

Nelson Resources Limited is an oil production and development holding 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 both international and Kazakh executives, has extensive experience
of the Kazakh operating and regulatory environment. The Company owns 50% of
Kazakhoil Aktobe LLP (KOA), a 50/50 joint venture between Nelson and
Kazmunaigas, the national oil company of Kazakhstan, which is developing the
Alibekmola and Kozhasai fields.  The Company owns a 50% participatory interest
in the North Buzachi oil field located in western Kazakhstan (50% Nelson, 50%
CNPC International (Buzachi) Inc.).  In May 2004, Nelson purchased 60% of
Chaparral Resources Inc., which has a 60% interest in the joint stock company
Karakudukmunai, with the remaining 40% being held by Kazmunaigas.  The Company
also holds an option to acquire a minimum 25% participatory interest in two
Caspian Sea offshore blocks, Zhambai South and South Zaburunye.  With its
financing and administrative offices in London, the Company maintains its
operational office in Almaty, Kazakhstan, which oversees the field joint
ventures in western Kazakhstan. Nelson and its affiliated companies employ
approximately 800 people. Common shares of Nelson are listed on the Toronto
Stock Exchange and quoted on London's Alternative Investment Market under the
symbol NLG.

Readers are cautioned that the preceding statements and information may include
certain estimates, assumptions and other forward-looking information. The actual
future performance, developments and/or results of the Company may differ
materially from any or all of the forward-looking statements, which include
current expectations, estimates and projections, in all or part attributable to
general economic conditions and other risks, uncertainties and circumstances
partly or totally outside the control of the Company, including oil prices,
imprecision of reserve estimates, drilling risks, future production of gas and
oil, rates of inflation, changes in future costs and expenses related to the
activities involving the exploration, development, production and transportation
of oil, hedging, financing availability and other risks related to financial
activities, and environmental and geopolitical risks. Discussion of the various
factors that may affect future results is contained in the Company's recent
filings with Canadian securities regulatory authorities. The Company disclaims
any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.





END

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