Chaparral Resources Announces Third Quarter Results and Corporate Update; Net Income Rises Nearly Fourfold to $13.32 Million or 35 Cents Per Share; Revenue More Than Doubles.

WHITE PLAINS, N.Y. -- Chaparral Resources, Inc. (OTCBB:CHAR) (the Company) today announced its financial results for the third quarter 2005 and a corporate update on the proposed offer by Lukoil Overseas Holding Limited to purchase the Company's majority shareholder, Nelson Resources Limited.

E[acute accent]Financial Results

E[acute accent]The Company reported net income of $13.32 million, or 35 cents per share, for the quarter ended September 30, 2005, compared to $3.56 million, or 9 cents per share, for the quarter ended September 30, 2004. The $9.76 million increase in net income primarily relates to higher revenues as a result of higher prices and higher sales volumes achieved during the third quarter of 2005. E[acute accent]Revenues were $50.44 million for the third quarter of 2005 compared with $22.08 million for the third quarter of 2004. The $28.36 million increase is the result of higher crude prices and sales volumes. During the third quarter of 2005, the Company sold approximately 984,000 barrels of crude oil for an average $51.24 per barrel. Comparably, Chaparral sold approximately 674,000 barrels of crude oil for an average $32.74 per barrel during the third quarter of 2004. The result is a positive price variance of $18.21 million and a positive volume variance of $10.15 million. E[acute accent]For the nine months ended September 30, 2005, the Company recorded net income of $23.75 million, or 62 cents per share, compared to net income of $5.49 million, or 14 cents per share, for the nine months ended September 30, 2004. (By comparison, net income for the full year 2004 was 22 cents per share.) The $18.26 million increase in net income for the nine month period is primarily a result of higher crude prices. E[acute accent]Revenues for the first nine months of 2005 were $107.92 million compared with $55.16 million for the first nine months of 2004. The $52.76 million increase is the result of higher crude prices and sales volumes. During the first nine months of 2005, the Company sold approximately 2,377,000 barrels of crude oil for an average $45.40 per barrel. Comparably, approximately 2,029,000 barrels of crude oil were sold for an average $27.19 per barrel for the first nine months of 2004. The result is a positive price variance of $43.30 million and a positive volume variance of $9.46 million. The Company exported 93% of total sales with 7% sold to the domestic market during the first nine months of 2005, compared with 91% export sales and 9% domestic sales in the first nine months of 2004. E[acute accent]Transportation costs for the third quarter of 2005 were $4.97 million, or $5.05 per barrel, and operating costs associated with sales were $4.05 million, or $4.11 per barrel. Comparatively, transportation costs for the third quarter of 2004 were $3.33 million, or $4.94 per barrel, and operating costs associated with sales were $1.76 million, or $2.61 per barrel. While transportation costs have remained relatively constant, the main reason for the increase in operating cost per barrel relates to changes in cost allocation procedures resulting in a lower percentage of field expenditures being capitalized. E[acute accent]Production for the first nine months of 2005 was 2.75 million barrels, equivalent to 10,075 barrels of oil per day (bopd), compared to 2.19 million barrels, or 7,993 bopd, in the first nine months of 2004, an increase of 26%. Current daily oil production is in excess of 12,000 barrels per day. E[acute accent]Drilling activity continued in the third quarter. The Company drilled three wells (9,609m) in the third quarter of 2005 compared to 3.6 wells (11,409m) in the second quarter of the year. The reduction in meterage was due to the drilling rig requiring essential maintenance, as a result of which 20 drilling days were lost. As of September 30, 2005 the total field well count had risen to 76 compared to 66 on December 31, 2004. The producing well count at the field as of September 30, 2005 was 58 wells compared to 45 at the end of 2004. One producing well was converted to a water injection well. E[acute accent]During the remainder of 2005, average production is expected to be maintained at a minimum of 12,000 bopd. Three new wells are expected to be drilled, six more wells converted to artificial lift, and two wells added to the water injection fund. Construction of the gas pipeline connecting the field to the Central Asian gas transit pipeline has been completed, and after installation of the necessary condensate traps and gas compressors, this will allow all gas not used in field operations to be sold. E[acute accent]Construction of a rail loading facility commenced in September. When completed in mid-2006, this will allow KKM to export crude by rail to Aktau, thus reducing its dependency on the KTO export pipeline system. KKM produces a higher quality crude than the blend exported via KTO, a quality differential for which it currently receives no compensation. The rail loading facility will offer the field alternative export routes and allow KKM to market its crude independently, thus achieving better netbacks. E[acute accent]Simon Gill, Chief Executive Officer of Chaparral, commented, "The continued increases in production from the Karakuduk field combined with the current high crude oil prices has helped the Company to achieve a 52% increase in revenue and 102% increase in net income over the second quarter 2005, and a 128% increase in revenue and 274% increase in net income compared to the third quarter of 2004. Chaparral is benefiting from the focused management leadership in KKM which has resulted in better production rates from new wells and the optimization of production from existing wells. The Company remains on track to achieve its full year 2005 targets."

E[acute accent]Company Update

E[acute accent]In response to shareholder and public inquiries, the Company wishes to summarize the current status of the proposed offer by affiliates of Lukoil Overseas Holding (Lukoil) to purchase 100% of the shares of Nelson Resources (Nelson) as it affects the Company. The following summary is not complete in detail and readers should refer to the primary announcements and filings by the parties, which include the Company, Nelson, Lukoil and other entities.

E[acute accent]--On September 30, 2005, Nelson announced it had entered into an agreement to negotiate with Lukoil for the terms of an offer to acquire 100% of Nelson's shares.

E[acute accent]--On October 3, 2005, the Company announced that it had formed a special committee of the board of directors to represent the interest of shareholders with respect to the potential Nelson/Lukoil transaction.

E[acute accent]--On October 13, 2005, Nelson entered into an Agreement to Amalgamate with Lukoil through a subsidiary which would acquire 100% of Nelson's shares for US$2 billion.

E[acute accent]--On October 14, 2005, Lukoil announced that it had purchased approximately 65% of Nelson's outstanding shares from four principal shareholders on the same terms offered to other shareholders.

E[acute accent]--On November 4, 2005, Nelson distributed a Notice of General Meeting of Shareholders to be convened on December 2, 2005, to vote on the offer by Lukoil to amalgamate. If a quorum of 75% of the shareholders vote in favor of the transaction, and other conditions are met, the amalgamation of Nelson into Lukoil would occur by December 12, 2005. If the amalgamation is not completed, Lukoil will remain the 65% majority shareholder of Nelson.

E[acute accent]--As of this date, there have been no changes to the management or directors of Chaparral, other than the appointment of Charles Talbot as CFO, previously announced on October 14, 2005. There has been no indication of Lukoil's future intentions as the majority shareholder of Nelson.

E[acute accent]Chaparral's special committee has established communication with Lukoil. Lukoil's position is that it is not currently prepared to discuss Chaparral issues until the amalgamation with Nelson is complete. The board and the special committee will inform shareholders and the public of information regarding the Lukoil/Nelson transaction as it relates to the Company as and when it is made available. E[acute accent]The Company's reports and filings may be found on the SEC internet site www.sec.com. Nelson's reports and filings, including the Management Information Circular relating to the amalgamation with Lukoil, may be found on the Canadian SEDAR internet site www.sedar.com. E[acute accent]Chaparral Resources, Inc. is an oil and gas development and production company. The Company's only operating asset is its participation in the development of the Karakuduk Field, in the Republic of Kazakhstan, through KKM, which is the operating company. The Company has directly and indirectly a 60% ownership interest in KKM with the other 40% ownership interest being held by Nelson. Nelson, an oil company listed on the Toronto Stock Exchange and the Alternative Investment Market of the London Stock Exchange, holds a majority interest in Chaparral and operates several other producing oil fields in Kazakhstan. More information is available on the Company's web site, www.chaparralresources.com. E[acute accent]Information Regarding Forward-Looking Statements: Except for historical information contained herein, the statements in this News 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 the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, 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 the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

FINANCIAL HIGHLIGHTS
                       ($000, except share data)

                                                   Quarter Ended
                                                    September 30
                                               -----------------------
                                                   2005        2004
                                               ----------- -----------

Revenue                                            50,437      22,078
Cost and expenses                                 (18,500)    (11,104)
                                               -----------------------
Income from operations                             31,937      10,974

Minority interest                                  (9,113)     (2,840)
Other income/(expense)                             (1,229)     (1,453)
Income tax expense                                 (8,280)     (3,122)
                                               ----------- -----------
Net income available to common stockholders        13,315       3,559
                                               =========== ===========

Basic earnings per share:
Net income per share                                $0.35       $0.09
Weighted average number of shares outstanding
 (basic)                                       38,209,502  38,209,502


Diluted earnings per share:
Net income per share                                $0.33       $0.09
Weighted average number of shares outstanding
 (diluted)                                     40,475,014  38,209,502