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Offshore Australia Longtom-4 Well Flows Approximately 58 Million Cubic Feet of Gas Per Day on 35 Hour Production Test on ACOR's ORRI on the Longtom Gas Field Under VIC/P54

Posted on: Friday, 19 September 2008, 09:00 CDT

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that Nexus Energy Limited, the operator of VIC/P54 including the production license VIC-L29 advises that the Longtom-4 development well in the Gippsland Basin, offshore Victoria has been successfully flow tested. The test of the primary production zone within the Admiral formation flowed at a rate of approximately 58 MMCF per day through a 64/64" choke on ACOR's ORRI.

The well flowed for 35 hours before being shut-in to monitor the pressure response from the reservoir. The forward plan is to suspend the well as a future producer with the rig expected to be released by the end of the week.

Longtom-4 is the second production well drilled, completed and tested in preparation for commercial production. Analysis of the production performance suggests that Longtom-4 alone would be capable of meeting the anticipated maximum contract requirements of the Longtom field.

In September 2006, the Longtom-3 well flowed at over 75 MMCF per day on test while bypassing the separator, confirming that it can also alone meet the contract requirements.

Nexus said, "the testing of Longtom-4 is another important milestone on the path to first production by mid 2009."

Longtom-4 has been drilled by the West Triton jack-up and is the second development well for the Longtom gas project. The Longtom-3 well, drilled during the third quarter of 2006, is ready for commercial production with no further rig intervention required. Timing of a planned third development well will depend on the field's production performance over time. The current plan assumes this well will be drilled two to three years after project start-up.

Gas produced from the Longtom wells will enter a new 12 inch pipeline and will be transported from the field to the end of Santos' existing Patricia-Baleen pipeline, 19 kilometers away. Nexus will construct this pipeline and the associated control lines and equipment with the pipelay barge contracted for installation in the December quarter.

The raw gas will then continue along the Patricia-Baleen pipeline to shore where it will be processed at Santos' existing onshore gas plant. Santos will install new equipment at the plant capable of processing the Longtom gas. This will primarily involve facilities for the stripping of condensate from the gas and the subsequent stabilization, storage and export of the condensate.

ACOR owns a 1/20th of 1% ORRI under the 155,676 acres (243 square mile) VIC/P54 (VIC/L29).

About The Gippsland Basin:

In excess of 4 billion barrels of oil/condensate and 12 TCF gas reserves have been discovered in the Basin since exploration drilling began in 1964, with remaining reserves estimated at 600 million barrels of oil and 5 trillion cubic feet of gas.

Current production of the basin is around 140,000 barrels per day of crude and 570 million cubic feet per day of gas. At peak rates, the Gippsland Basin can deliver more than 1,000 million cubic feet a day.

Some of the very best oil production in the world is found in the Gippsland Basin.

About Australian-Canadian Oil Royalties Ltd.:

ACOR management draws no cash salary. ACOR has NO LONG-TERM DEBT. ACOR's principal assets consist of 15,440,116 gross surface acres of overriding royalty interest and 8,561,007 gross acres of working interests, located Onshore Australia in the Cooper-Eromanga Basin and Offshore Australia in the Gippsland Basin in the Bass Strait and Offshore in the Carnarvon Basin in Western Australia.

ACOR is a publicly traded oil company trading on the NASDAQ OTC Bulletin Board Exchange under the trading symbol "AUCAF."

Summary:

Australia is a "hot spot" for oil & gas exploration and ACOR is positioned for possible "Company-Maker" discoveries. ACOR's working interests and overriding royalty interests are located offshore & onshore in the best producing basins.

Visit our website at www.aussieoil.com.

Disclaimer:

Except for historical information contained herein, the statements released are forward-looking statements that are made pursuant to the provision of the Private Securities Litigation Reform Act of 1955. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks.

Source: Business Wire

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