Nelson Resources Arranges U.S. $70 Million Term Financing

Nelson Resources Limited (TSX: NLG), a leading independent oil company operating in Kazakhstan, has arranged on behalf of its subsidiary, Nelson Buzachi Petroleum B.V. (BBV), a four-year financing agreement in the form of an oil prepayment facility with a principal amount of up to U.S.$70 million through the Commodity Structured Finance Group of BNP Paribas (Suisse) S.A. (BNP Paribas) and Vitol S.A. (Vitol). Proceeds of this financing will be used to repay the previously announced bridge loan used to acquire the Company's 50% interest in the North Buzachi field, onshore Kazakhstan.

The financing is structured as an advance payment by Vitol to BBV for future deliveries of crude oil from the North Buzachi field. BBV is obligated to repay the US$70 million in equal monthly installments starting on 29 November 2004. The final repayment date is 48 months after the facility has been utilized. These payments will be made in the form of crude oil deliveries under the offtake agreement with Vitol, subject to a minimum monthly quantity of 15,000 tonnes (102,551 barrels). Should the value of crude oil delivered in any month be less than the amount required to service the agreement, BBV will make up the shortfall in cash. Nelson serves as financial guarantor of the facility.

Commenting on the financing arrangement, Nick Zana, Chairman and CEO of Nelson stated: "We continue to be excited by the potential of this oil field, and I am very pleased that we have secured long-term financing on such favorable terms. We are delighted to join forces with such strong financial partners in this transaction, BNP Paribas and Vitol, both of whom are leaders in their respective areas of activity."

Nelson Resources Limited is an oil and gas production and development holding company operating in the Republic of Kazakhstan. 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% controlling 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. Zhambai South is estimated to have as much as 14 bln boe of hydrocarbons. Common shares of Nelson are listed on the Toronto Stock Exchange under the symbol NLG.

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