NLG Arria Nlg Ords

    23 December 2004

                      NELSON RESOURCES LIMITED ANNOUNCES
                     ACQUISITION OF 40% OF KARAKUDUK 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 definitive sale and purchase agreements
to acquire a 40% interest in the Karakuduk field. Nelson will pay an estimated
U.S.$36.0 million, inclusive of transaction costs, 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.

Following the previously announced agreement between Nelson and Chaparral 
Resources Inc. ("Chaparral"), which holds the other 60% interest in the field,
Chaparral, through a wholly-owned subsidiary, exercised its right of first
refusal to purchase the remaining 40% stake currently owned by the Kazakh state
oil company Kazmunaigas. Upon completion of this transaction, ownership of this
stake will be transferred to Nelson, increasing the Company's net interest in
the Karakuduk field to 76% (with 36% held indirectly through the Company's
shareholding in Chaparral, and 40% held directly). The Company is the majority
shareholder of Chaparral, holding 60% of its outstanding shares.

The 16,900 acre Karakuduk field has total estimated remaining proved plus
probable reserves of approximately 63.0 million barrels of oil (independent
reserve report, 31 December 2003), and produced 8,290 barrels of oil per day on
average for the third quarter 2004. The field is located onshore in the
Mangistau region of western Kazakhstan, 340 kilometres northeast of the Caspian
port of Aktau, and is operated by Joint Stock Company Karakudukmunai ("KKM"),
which will be owned 60% by Chaparral and 40% by Nelson. KKM was awarded a
25-year commercial development licence for the field in 1995.

The Karakuduk field has direct access to export markets. The field is
approximately 29km west of the main utility corridor, including the
Makat-Mangishlak railroad and the Uzen-Atyrau-Samara oil and gas pipelines. KKM
has a right to use the existing oil export pipeline and related utilities. It
also has a contract with CJSC Kaztransoil, a 100% subsidiary of Kazmunaigas,
granting the right to use the export pipeline for transportation of crude oil to
local and export markets. KKM has a 29 km crude oil pipeline from the field
capable of transporting up to 18,000 barrels of oil per day to the export
pipeline terminal.

Nick Zana, Nelson's Chief Executive Officer, commented, "The Karakuduk field
offers significant potential for growth in production, and since becoming the
major shareholder of Chaparral in May 2004, we have already begun to see some
success from our strategy to improve performance through rapid field
development. Securing the remaining 40% Kazmunaigas stake allows us to
consolidate our control of this excellent field. The acquisition will impact
positively on our performance, increase our reserve base and production levels,
and allow us to more effectively pursue our development strategy at the field,
to the benefit of all shareholders, both of Nelson and Chaparral."

 
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.). The Company is also in the process of acquiring a 50% interest
in the Arman field, with the other 50% held by Shell. 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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