CHAPARRAL
CHAPARRAL RESOURCES, INC.
14 November 2005
United States Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, NW
Washington, D.C. 20549
Attn: H Roger Schwall, Assistant Director
Chaparral Resources, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2004 Filed March
31, 2004 Forms 10-Q for Fiscal Quarters Ended March 31, 2005 and
June 30, 2005-11-10 Filed May 16, 2005 and August 12, 2005-11-10
Response letter dated August 11, 2005 File no. 0-07261
Dear Mr Schwall
Thank you for your letter of November 2, 2005. We set out below our responses to
your queries.
Form 10-K for the Fiscal Year Ended December 31, 2004
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Controls and procedures
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Changes in internal controls over financial reporting page 21
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We confirm that we will exclude the statement "there have been no significant
changes in internal controls over financial reporting or other factors,
subsequent to December 31, 2004 from future Form10-Q filings as this comment is
not consistent with the guidelines described in Item 308(c) of Regulation S-K.
Sale by KMG of Minority Interest in KKM to Nelson
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The price paid by Nelson for its stake in Closed Type JSC Karakudukmunay ("KKM")
was determined in an open tender held by the seller of the interest, JSC
KazMunayGaz ("KMG"), which is wholly owned by the Government of the Republic of
Kazakhstan. The price determined at the tender as the result of competitive
bidding was $34.6 million for a 40% stake. This equates to $2.13 per barrel of
proved reserves in the ground.
2 Gannett Drive o Suite 418 o White Plains, NY
10604 o Tel: 866-559-3822 Fax: ###-##-####
United States Securities and Exchange Commission
Division of Corporate Finance
Page 2
The $28 per barrel figure quoted in your letter is the average selling price per
barrel achieved by the KKM during 2004. The selling price per barrel is
determined on the open market and is subject to very significant fluctuations.
The price any potential buyer would be willing to pay for proved reserves in the
ground will be significantly below the market sales value as the buyer would
need to take account of many additional factors including, but not limited to,
capital investment programs, the cost of production, selling and transportation
expenses, administration costs, financing charges, corporate taxes, political
and economic risk and the time value of money.
We hope that the above responses satisfactorily answer your questions.
Yours sincerely.
Charles Talbot
Chief Financial Officer
AITKEN IRVIN BERLIN & VROOMAN, LLP
Attorneys at Law Independent
New York 2 Gannett Drive Affiliated Offices
Washington, D.C. White Plains, NY 10604 Beijing
Kiev Telephone (914) 694-2226 Buenos Aires
Telecopier (914) 694-1647
Writer's Direct Dial No. (914) 694-5717
Writer's Email: adberlin@aibvlaw.com
November 15, 2005
Via Federal Express
Division of Corporate Finance
Securities and Exchange Commission
450 5th Street N.W.
Washington, D.C. 20549
Attention: H. Roger Schwall
Assistant Director
Re: Chaparral Resources, Inc. ("CRI")
Form 10-K for Fiscal Year Ended December 31, 2004
Form 10-Q for Fiscal Quarter Ended March 31, 2005
File No. 0-07261
Dear Mr. Schwall:
Enclosed is a response from CRI to your comment letter dated November 2, 2005
which was sent via fax to Mr. Nigel Penney who was formerly CRI's Chief
Financial Officer. Please be advised that as previously reported, Mr. Penney has
left the company and has been replaced as Chief Financial Officer by Mr. Charles
Talbot effective as of October 1, 2005.
CRI has endeavored to respond fully and completely to your comments and we trust
that you will find the responses satisfactory. However, should you have further
questions or need any additional information please let us know.
Sincerely yours,
Alan D. Berlin
cc: Mr. Charles Talbot
Chaparral Resources, Inc.