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Offshore Australia Bazzard-1 Well Spuds on ACOR's ORRI Under VIC/P53 With Est. Possible Reserves of 153,000,000 Barrels of Oil or Approximately $15,300,000,000 At Current Crude Prices

Posted on: Tuesday, 23 September 2008, 09:01 CDT

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce the start of the Bazzard-1 Well, located Offshore in the Gippsland Basin on VIC/P53 on ACOR's ORRI.

The status of the Bazzard-1 well at 06:00 hrs on September 22nd was: Bazzard-1 spudded at 23:30 hours on September 20th 2008. The well has currently drilled to approximately 498 feet. Bazzard-1 will be drilled in approximately 223 feet of water and will be drilled to a total depth of approximately 11,482 feet at an estimated cost of $20,000,000.

According to the JV Partner, in the event the Bazzard-1 well encounters oil across all five target zones, the upside possible recoverable oil could be as high as 153 million barrels of oil or approximately $15,300,000,000 using current market prices of $100.00 per barrel on ACOR's ORRI.

Bazzard-1 will be drilled in 223 feet of water and is expected to take 22 days to drill and evaluate.

Click on link to see the photos of the VIC/P53 location and the Bazzard structure http://www.aussieoil.com/site/acor-map.htm.

VIC/P53

VIC/P53 consists of approximately 182,858 gross acres. VIC/P53 is also called the "Hole of the Doughnut" as it is surrounded by nine (9) giant producing oil & gas fields, leaving VIC/P53 in the middle. One of the nine (9) giant fields is called the Halibut Oil Field.

The Halibut Oil Field adjoins VIC-P53 to the east.

Esso Australia, a subsidiary of Exxon operates the Halibut Oil Field located in the Bass Straits. The Halibut Oil Field was discovered in 1967 and has produced approximately 840,000,000 barrels of oil or approximately $84,000,000,000 using current market prices of $100.00 per barrel from 14 wells and is still producing.

One of the 1st original oil wells is the Halibut 15A well, which was drilled in 1967 and intersected an approximately 492 foot oil section.

The Halibut 15A well has produced approximately 84,000,000 barrels of oil or approximately $8,400,000,000 using current crude oil prices from one well!

The Halibut 15A well still has a projected production life of up to approximately the year 2077!

Last year, Esso Australia drilled three wells that offset the Halibut 15A well, the 1st well came in with an IP 3,800 BOPD, the 2nd well came in with an IP 12,500 BOPD & the 3rd well came in with an IP 9,000 BOPD. All three wells came in with 0% water cut.

These are incredible results in attempts to increase the life of a 41 year old oil field.

About VIC-P53 & the Bazzard-1 well

The Bazzard 3D, recorded from early March 2005, has provided the newest dataset that the JV partner used to identify and rank prospects for drilling by 2008.

The 3D was aimed at providing finer delineation of a number of pre-existing leads, including Cod West, Updip Veilfin, Catfish, Bazzard, Spineback and Hake, with a secondary objective of identifying any additional Latrobe Group targets that may exist.

VIC/P53 is considered prospective for oil and gas at the top Latrobe and also at deeper intra Latrobe levels.

The location, adjacent to this infrastructure, and proximity to pipelines, processing facilities and major markets, offers potential advantage through infrastructure savings and gives encouragement to participation in VIC/P53. The hydrocarbons recorded at Veilfin-1 established the existence of a working petroleum system in the permit area.

ACOR owns 3/20ths of 1% ORRI under VIC/P53.

So what is 3/20ths of 1% ORRI possibly worth?

ACOR management has had several questions from AUCAF shareholders about some of our fractional ORRI interest in various blocks and what they could possibly be worth to the company.

3/20ths of 1% may not sound like a like a lot, but if you own a fractional ORRI in an area where giant oil & gas fields are being discovered and produced, that fractional ORRI could possibly generate sizeable revenue.

For example, if you owned a 3/20ths of 1% ORRI under the Halibut Oil Field* and when the Halibut Oil Field* produced approximately 840,000,000 barrels of oil and if the operator of the Halibut Oil Field* was able to sell the 840,000,000 barrels of oil produced for an average price of $100.00 per barrel, then your 3/20ths of 1 % would have generated in revenue of approximately $126,000,000 before taxes.

(*Reminder: This was merely an example, ACOR does not own any ORRI's under the Halibut Oil Field* and there are no guarantees of a similar performance).

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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