Chaparral Resources, Inc. Announces Year End Results and Operational Update.

Energy Editors/Business Editors

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--March 29, 2004

Chaparral Resources, Inc. (OTCBB:CHAR) today reported net income of $2.06 million, or 5 cents per share, for the fiscal year ended December 31, 2003 compared to net income of $4.12 million, or 14 cents per share, for the year ended December 31, 2002. The $2.06 million decrease in our net income is the net result of (i) higher transportation, depletion, general and administrative, income tax, and minority interest costs for the year ended December 31, 2003, (ii) a $5.34 million extraordinary gain recognized as a result of the restructuring of our indebtedness during 2002, offset by (iii) higher revenues recognized during 2003, (iv) the recognition of a $1.02 million gain as a result of the adoption of SFAS 143 on January 1, 2003 and (v) lower interest costs for 2003.

During 2003 we sold approximately 2,694,000 barrels of crude oil, recognizing $57.61 million in revenue, or $21.39 per barrel. In comparison, we sold approximately 2,467,000 barrels of crude oil, recognizing $45.13 million in revenue, or $18.29 per barrel, for the year ended December 31, 2002. The increase in volumes sold during 2003 was the result of increased production and export quotas obtained for the year. Transportation costs for the year ended December 31, 2003 were $11.47 million, or $4.26 per barrel, and operating costs associated with sales were $5.92 million, or $2.20 per barrel.

Interest expense for the year ended December 31, 2003, decreased by $1.08 million from $5.61 million in 2002 to $4.53 million in 2003, as a result of lower financing costs and the restructuring of our indebtedness in 2002.

As of February 24, 2004, the daily oil production is approximately 8,500 barrels per day from 40 of the 47 productive wells in the field. In December 2003, Karakudukmunay (KKM) production peaked at over 12,000 barrels of oil per day and daily production averaged over 11,000 barrels of oil per day for the month. The production decrease from 11,000 barrels per day average during December 2003 to our current level of 8,500 barrels per day is a result of the need to fully implement the reservoir pressure maintenance program to insure that ultimate reservoir recovery will not be negatively affected due to gasification of the reservoir and reservoir pressure decline. Accordingly, KKM has reduced choke sizes and shut in a number of wells for pressure monitoring and analysis purposes. Until the reservoir pressure maintenance program has been fully implemented, KKM cannot maximize well productivity.

KKM successfully initiated a "pilot" reservoir pressure maintenance program during 2003 by the injection of water into one well. KKM witnessed a favorable increase in the reservoir pressure on surrounding well production performance. While we expect the reservoir pressure maintenance program to be commissioned by the end of March 2004, we do not expect to see a tangible benefit in terms of increased production levels until the third quarter of 2004.

In 2004, KKM plans to increase its daily production through additional water injection, the installation of additional downhole pumps, and the drilling of 16 additional wells. Accordingly, management expects the Karakuduk Field production to increase from the current level of approximately 8,500 barrels of oil per day to approximately 13,000 barrels of oil per day by the end of the year.

"Chaparral has been successful in 2003 in increasing its production, export sales and its initiatives in reservoir pressure maintenance program," said Mr. Nikolai Klinchev, the Company's chief executive officer. "With the success of the water injection program in 2004, we hope to increase the productivity of the field." However, Mr. Klinchev cautioned that implementation of the foregoing program and the achievement of the Company's production goals is dependent on oil prices and export quotas, along with production remaining at sufficiently high levels to generate the necessary cash flow. The company anticipates an additional financing need of $15-20 million to achieve its work program in 2004 and is investigating the options to secure such financing.

Chaparral Resources, Inc. is an international oil and gas exploration and production company. The Company's only operating asset is its participation in the development of the Karakuduk Field through KKM, of which Chaparral is the operator. The Company owns a 60% ownership interest in KKM with the other 40% ownership interest being held by Joint Stock Company KazMunayGaz, the government-owned oil company. Central Asia Industrial Holdings, a private investment holding company, holds a majority interest in Chaparral and is a significant investor in the Kazakh oil sector.

Information Regarding Forward-Looking Statements: Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause Chaparral's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, the ability of Chaparral to secure financing, volatility of oil prices, product demand, market competition, risks inherent in the Company's international operations, imprecision of reserve estimates and Chaparral's ability to replace and expand oil and gas reserves. These and other risks are described in Chaparral's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

                         FINANCIAL HIGHLIGHTS

                 (in thousands, except per share data)

                                              Years Ended December 31
                                             -------------------------
                                                2003         2002
                                             ------------ ------------

Revenue                                          $57,615      $45,133
Costs and Expenses                               (43,489)     (37,685)
Other Expense                                     (8,962)      (5,984)
Income tax expense                                (4,121)      (2,685)
Extraordinary gain on debt restructuring               -        5,338
Cumulative effect of change in
    accounting principal                           1,018            -
                                             ------------ ------------
Net income/ (loss) available to common
  stockholders                                   $ 2,061      $ 4,117

Basic and diluted earnings per share:
Net income per share                               $0.05        $0.14
Weighted average number of shares
    outstanding (basic and diluted)           38,209,502   29,753,569
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