Nicholls has trained 45 at winners The Festival, the third highest ever, while his haul of four Cheltenham Gold Cups is the highest of any current trainer and second only to Tom Dreaper, who won the Blue Riband of chasing five times.
Nicholls, who has been crowned champion Jump trainer 11 times, said: "Clan des Obeaux is obviously a dual King George winner and looks absolutely fantastic in his coat.
"He was one of eight horses we took to Wincanton this morning, and he did a proper workout with Frodon over two miles. It was always the plan to go somewhere with them this week as part of their preparation. Him and Frodon worked particularly well, and I was thrilled with this lad. He has had a great preparation.
"Last year, we went from Kempton to the Denman Chase, which was put back a week, and then to Cheltenham. We are coming in with a different preparation this year because we have worked out that he is best when fresh.
"His best runs have been from Haydock to Kempton last season and then this season from Down Royal to Kempton. He is only eight and is bound to have improved. I think he is in as good a shape as he has ever been. He has not won at Cheltenham, but perhaps he will do that in two weeks' time.
"He ran well in last year's Gold Cup and was bang there jumping the last. He did not quite finish off his race and I think that was down to a few things, the preparation being one of them. We rode him to the fore last year whereas this year I think we will ride him with more restraint. I think the key is that he is a year older and comes in off a different preparation.
"He is very effective when he is very fit and very fresh - I think he is lethal on those terms. I think he is my best chance of the week."
The Festival presented by Magners gets under way on March 10.