NLG Arria Nlg Ords

    23 December 2004

                    NELSON RESOURCES LIMITED ANNOUNCES 
                    ACQUISITION OF 50% OF ARMAN FIELD

Nelson Resources Limited ("Nelson" or the "Company", TSX / AIM: NLG), a leading
independent oil exploration and production company operating in Kazakhstan,
today announces that it has entered into a definitive sale and purchase
agreement to acquire a 50% interest in the Arman field from the Kazakh state oil
company Kazmunaigas. Nelson will pay a purchase price of U.S.$10.8 million from
existing cash resources.  The closing of the transaction remains subject to
normal government and regulatory approval, and is expected to occur in January
2005.

The 8,650 acre 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). The field is located on the Caspian shoreline, 200
kilometres north of Aktau, and is operated by Arman LLP, a joint venture which
will be owned 50% by Shell Kazakhstan Development B.V. ("Shell") and 50% by
Nelson. Shell will continue to hold operating responsibility for the field. The
field is 30km north of the North Buzachi field, in which Nelson also has a 50%
interest. 

The joint venture was awarded a 30-year commercial development licence in 1994,
and since then field development has included the use of advanced drilling
technologies such as hydraulic fracturing and cluster drilling, as well as the
construction of first class processing facilities. A 3D seismic survey of the
field was acquired in 1997. In addition to processing oil produced at the field,
the facilities are already processing 10,500 barrels of oil per day from the
North Buzachi field. The existing facilities are currently being de-bottlenecked
in order to further increase processing capacity.

The field has direct pipeline access to key export transportation routes
including the Atyrau-Samara and CPC pipelines, and currently has a contract with
CPC for transportation of the field's crude oil to export markets.

Nick Zana, Nelson's Chief Executive Officer, commented, "This strategic
investment is an important addition to Nelson's growing portfolio of interests
in producing oil and gas assets in Kazakhstan. The Arman field is at an advanced
stage of development and requires little further capital expenditure. In
addition to boosting our reserves and production, acquisition of this field
will also allow us to take advantage of synergies with our existing assets,
especially regarding oil processing and transportation."

 
For further information, please contact:
----------------------------------------
Fred Hodder, CFO                              Tel: 020 7495 8908
Nelson Resources Limited                      fhodder@nelsonresources.co.uk

S.A.(Al) Sehsuvaroglu, Senior Vice President  Tel: +7 3272 58 25 81/2/3
Nelson Resources Limited                      sas@nelsonresources.com

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 exploration 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, operator of
the Karakuduk field. The remaining 40% of this field is currently in the process
of being acquired by Nelson. The Company also holds an option to acquire a 
minimum 25% participatory interest in two Caspian Sea offshore blocks, Zhambai 
South and South Zaburunye. 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 
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.

The estimates of reserves and future net revenue for individual properties may
not reflect the same confidence level as estimates of reserves and future net
revenue for all properties, due to the effects of aggregation. Additional
information on the company's reserves may be obtained from the 2004 Business
Acquisition Report, available at www.sedar.com.



END

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