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$50 Million Dollar- 51 Well Drilling Program on ACOR's ORRI Under ATP-299 - Endeavour-11 & Huckleberry-1 Strike Oil on the $5 Billion Dollar Potential Oil Field- Mimosa-1 Spuds

Posted on: Wednesday, 31 May 2006, 12:00 CDT

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) reports that the JV partner of ATP-299 is pleased to announce that Endeavour 11 has been cased and suspended as a new oil production well.

Endeavour 11 was drilled at the Endeavour Field on ACOR's ORRI approximately 300 meters southeast of Endeavour 1 encountered good oil shows with approximately 5 meters of net oil pay in the Birkhead reservoir unit and has been cased as a future oil production well. The drilling rig PDI -724 was then released to the Mimosa 1 near field exploration (NFE) well location. Mimosa 1 is located approximately 2 kilometers southwest of Endeavour 11 and 850 meters southwest of Endeavour 3.

The drilling rig PDI-735 drilled and is testing Huckleberry 1, a near field exploration well located approximately 2 kilometers west of Mulberry 2. Huckleberry 1 encountered good oil shows during drilling and the potential reservoir formations are being tested.

About The Mulberry Oil Field:

Mulberry-1 was drilled in 2004 and is producing oil at a rate of approximately 600 barrels of oil per day. The 51 wells are designed to achieve additional oil production and to test the extent of the oil pool in the Birkhead 11-77 sand discovered in the Mulberry-1 well. The Mulberry-Gimboola-Endeavour /Tintaburra Oil Field contain significant proved undeveloped oil reserves and exploration up side.

The Mulberry-Gimboola-Endeavour Field is part of the Tintaburra Oil Field on ACOR's ORRI under ATP-299 and is estimated to contain around 84 million barrels of proved plus probable oil in place or approximately $5,036,640,000, at current market prices.

ACOR owns .0575 of 1% ORRI under ATP-299.

12 Wells to Be Drilled - All Adjoin ACOR's 41.5% WI PEL 112 - Sellicks-2 IP 2685 BOPD-To be completed as a Multiple-Zone Oil Producer & a new oil pool discovery

Since the May 24th ACOR press release, Sellicks-2 has drilled ahead 140 meters in a deviated hole to reach a total depth of 2147 meters. DST- 1A (1984 - 2007 meters), which was reported last week, flowed oil to surface at a final rate of 2685 barrels oil per day and is a new-pool oil discovery in the Poolowanna Formation.

Since then, the well's primary target, the Patchawarra Formation, was intersected 5 meters updip of Sellicks-1 and wireline logs were acquired after reaching TD. This data shows that the reservoir interval is similar to Sellicks-1 and preliminary log interpretation indicates approximately 7 meters of oil pay in the Patchawarra and 3 to 6 meters in the Poolowanna.

In addition, two further sands within the Patchawarra are possibly oil-bearing, but could not be tested due to the hole limitations. It is planned to address this potential (up to 6m of oil pay) once production has been established from the Poolowanna and Lower Patchawarra intervals.

Casing was being run prior to completing the Sellicks-2 well as a multiple-zone oil producer. The Sellicks-2 adjoins ACOR's PEL 112 to the north.

Sellicks-3 Spuds Next

The rig will then be skidded about 5 meters to spud Sellicks-3, the 6th well of 12 wells to be drilled - all adjoining ACOR's PEL 112.

Since its discovery in July 2003 the Sellicks-1 has produced more than 250,000 barrels of oil or $17,500,000, using $70.00 per barrel oil and continue to produce strongly. However, new 3-D seismic mapping suggests that the discovery well may not be optimally located on the field, and the two appraisal wells are designed to test the potential for undrained oil updip and offset from Sellicks-1. Both wells will be deviated from a single well site located adjacent to the established field facility.

All the wells mentioned in this press release adjoin ACOR's 41.5% working interest PEL 112 to the north and to the east.

Silver Sands-1 well came in with an initial potential of 1062 BOPD Christies-1 well came in with an initial potential of 500 BOPD Christies-2 well came in with an initial potential of 1960 BOPD Christies-3 well came in with an initial potential of 2400 BOPD Christies-4 well came in with an initial potential of 653 BOPD Christies-5 well came in with an initial potential of 403 BOPD Sellicks-1 well came in with an initial potential of 1780 BOPD Sellicks-2 well came in with an initial potential of 2685 BOPD Worrior-1 well came in with an initial potential of 2800 BOPD Worrior-2 well came in with an initial potential of 2000 BOPD Worrior-3 well came in with an initial potential of 276 BOPD Worrior-4 well came in with an initial potential of 1660 BOPD

The current production on the adjoining area to the north of ACOR's PEL 112 is averaging a reported $33,000,000 a year.

The current production on the adjoining area to the east of ACOR's PEL 112 is averaging a reported $75,000,000 a year.

Why are we talking about the Wells that adjoin ACOR's PEL 112?

Take the smallest of the recent discoveries (276 BOPD) and multiply (x) it by $70.00 per barrel, current market price of crude oil times (x) 30 days, times (x) 12 months and apply it to times (x) ACOR's PEL 112 41.5% Working Interest and see the results for yourself. Now do the same with the largest discovery that adjoins ACOR's PEL 112.

Smallest Discovery so far, Worrior-3 IP276 BOPD

Largest Discovery so far, Worrior-1 IP2,800 BOPD

Now you can see why ACOR management is so excited about all the drilling activity that is going on adjoining ACOR's PEL 112 to the north and east. In our opinion, any one of the recent discoveries from the smallest to the largest could be a possible "Company-Maker" discovery for our company, if discovered on PEL 112.

This is some of the most profitable production in onshore Australia, and ACOR is in the middle of it.

ABOUT PEL 112

ACOR has invested approximately 5 years of time and several million dollars on PEL's 112, 108, & 109.

PEL 112 covers 818,904 acres and has never been drilled on (no dry holes) and is located in the Cooper/Eromanga Basin of South Australia. ACOR has just completed a new seismic survey on PEL 112 at a cost of approximately $1,100,000. The new seismic survey has discovered two large seismograph highs as well as 28 smaller ones. The two large seismograph highs are called C-23 & C-26, which cover a combined area of approx. 5,534 acres with excellent closure.

ACOR is currently getting drilling bids for the 2 best drilling locations identified by seismic. The drilling locations for C-23 & C-26 have now been staked and the photos of the locations are available on our website.

ACOR owns 41.5% WI under PEL's 108, 109, & 112.

ACOR Onshore Australia Working Interest Update:

ACOR has received farmout requests for a portion of ACOR's 41.5% working interest under PEL 108, 109, & 112 and a portion of ACOR's 100% working interest under ATP-582, covering approximately 8,414,348 gross acres. Both areas are located in the Cooper/Eromanga Basin in South Australia and Queensland. ACOR management is seriously reviewing the farmout requests. Results of the meetings will be shared with you in forthcoming press releases.

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.

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 interest and overriding royalty interest 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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