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Arman Acquisition 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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