NLG.L Regulatory News (NLG)

30 Sep 2005 06:00

30 September 2005 NELSON RESOURCES ENTERS INTO NEGOTIATIONS WITH LUKOIL Nelson Resources Limited of Bermuda (TSX/AIM: NLG) (Nelson) today announcedthat it has entered into an agreement to negotiate with Lukoil Overseas HoldingLtd. (Lukoil) concerning a proposal received from Lukoil to acquire 100% of thefully diluted common shares of Nelson for US$2,000,000,000 in cash, which basedon currency exchange rates as of September 29, 2005, equates to a per sharevalue of approximately GBP1.24 (GBP/US$1.7618) and CDN$2.57 (CDN$/US$1.1725).A special committee of Nelson's board of directors was established to review,with the assistance of independent counsel, this proposal and to protectshareholder interests, particularly minority interests, in this process. Afinancial advisor has been retained to render an opinion to the specialcommittee with respect to the fairness of the consideration offered under thetransaction to the shareholders. The special committee has been particularlyfocussed on ensuring that any offer would be made for 100% of the shares ofNelson.Lukoil's proposal is subject to a number of customary conditions includingsupport agreements with Nelson's principal shareholders owning in aggregateapproximately 57% of outstanding shares, government and regulatory approvals,and negotiation and execution of definitive transaction agreements withcustomary provisions for transactions of this nature, including a 3% break fee.The parties have agreed to negotiate the definitive agreements by October 12,2005. Nelson's obligation to proceed is subject to receiving the opinion of itsfinancial advisor that the consideration under the offer is fair to theshareholders from a financial point of view.There can be no assurance that a transaction will proceed or be successfullycompleted. Details of the terms of any final proposal will be disclosed uponsigning of definitive agreements.Nick Zana, Nelson's CEO and Chairman, noted that, "It is our goal to ensurethat minority shareholders are treated fairly and are afforded the opportunityto participate along with and on the same basis as the majority shareholders inthis transaction."Nelson Resources Limited is an oil exploration and production company withoperations in the Republic of Kazakhstan. The Company established its presencein the Kazakhstan oil sector in 2000 and its management team, comprising ofboth international and Kazakh executives, has extensive experience of theKazakh operating environment.The Company's shares are listed on the Toronto Stock Exchange and AlternativeInvestment Market (AIM) of the London Stock Exchange with approximately 912million shares authorized on a fully diluted basis.For further information, please contact:----------------------------------------Nicholas Greene, Chief Financial Officer Tel: 020 7495 8908Nelson Resources Limited ngreene@nelsonresources.co.ukFred Hodder Tel: 020 7495 8908Nelson Resources Limited fhodder@nelsonresources.co.ukInvestor Relations------------------Ann-marie Wilkinson / Nick Lambert Tel: 020 7861 3232 Bell Pottinger Corporate & Financial (London) THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICESOR FOR DISSEMINATION IN THE UNITED STATES. This news release does notconstitute an offer to sell or a solicitation of an offer to buy any of thesecurities of the Company in the United States. The securities of the Companyhave not been and will not be registered under the United States Securities Actof 1933, as amended (the "U.S. Securities Act") or any state securities lawsand may not be offered or sold within the United States or to U.S. personsunless registered under the U.S. Securities Act and applicable state securitieslaws or an exemption from such registration is available.ENDNELSON RESOURCES LIMITED