Chaparral Resources Inc. Announces Exercise of Its Right of First Refusal on 40% Interest in Karakuduk Field.

WHITE PLAINS, N.Y. -- Chaparral Resources Inc. (OTCBB:CHAR) ("Company") today announced that, pursuant to its previously announced agreement with its majority shareholder, Nelson Resources Limited (NLG:TO) ("Nelson"), the Company has, through its wholly owned subsidiary Central Asian Petroleum (Guernsey) Ltd. ("CAP-G"), exercised its right of first refusal to purchase from JSC KazMunayGaz ("KMG"), the national petroleum company of the government of Kazakhstan, the remaining 40% equity interest in JSC Karakudukmunai ("KKM"). The Company has entered into definitive sale and purchase agreements with both KMG and Nelson, which provide that upon completion of the acquisition by CAP-G, ownership of the newly acquired 40% interest in KKM will be transferred to Nelson. Closing of the transaction remains subject to normal government and regulatory approval, and is expected to occur in January 2005.

CAP-G will pay a purchase price of US$34.6 million to KMG, the funds for which are being made available to CAP-G by Nelson. In addition, Nelson will pay the Company a fee of US$1.0 million, as well as all documentation and transaction costs relating to the acquisition.

Simon Gill, chief executive officer of Chaparral Resources, commented, "We are very pleased that the Company has been able to capture this opportunity to ensure that the interest in KKM which it does not currently own will remain in friendly hands. This will enable the Company to aggressively pursue its development plans for the Karakuduk field in order to achieve the field's full productive potential."

Chaparral Resources Inc. is an oil and gas exploration 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 Joint Stock Company KazMunayGaz, the national petroleum company of Kazakhstan. Nelson Resources Limited, an independent 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.

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 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.