$50 Million Dollar – 51 Well Drilling Program – Gimboola-5 and Endeavour-8 Strike Oil on ACOR’s ORRI Under ATP-299 – Could ACOR’s PEL 112 Have the Potential to Be Another ATP-299? – ACOR Raises $4,500,000 to Find Out That Question

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) reports that the JV partner of ATP-299 is pleased to announce the completion of two additional future production wells, Gimboola-5 and Endeavour-8, as the Tintaburra 51 well drilling program continues on ACOR’s ORRI.

The Drilling Rig PDI-735 drilled the Gimboola-5 well to a total depth (TD) of 1389 meters and encountered approximately 3 meters of oil pay in the Middle Birkhead reservoir unit. This well was cased and suspended as a future oil production well.

The Drilling Rig PDI-724 completed drilling the Endeavour-8 well on June 13th. Wire line logs run in the Endeavour-8 well show approximately 6 meters of net oil pay in the Birkhead reservoir unit. This promising result proves reservoir presence, 500 meters south southwest of Endeavour-2. This well has been cased and suspended as a future oil production well.

The Tintaburra drilling program on ACOR’s ORRI is the largest continuous oil development and exploration drilling program ever undertaken in SW Queensland with three (3) modern rigs drilling and casing wells at around seven (7) days per well. The JV partners have achieved a phenomenal 94% success rate on ACOR’s ORRI in the Birkhead reservoirs on ATP-299. The Tintaburra wells are progressively being tied in to the production system with six wells now producing oil.

More Drilling on ACOR’s ORRI under ATP-299

The Gimboola-2 well spudded on June 18th. Gimboola-2 encountered oil shows while drilling through the reservoir section, current operations are preparing to run wire line logs.

The Classic-1 near well spudded on June 17th, and is approximately 4.5 kilometers northeast of Endeavour 1. The Classic-1 well will retrieve a core sample over the reservoir interval. It is expected that coring will commence today.

The 3rd Drilling Rig PDI-721 spudded the Chancett-1 well on June 13th. Chancett-1 is located approximately 2.5 kilometres north northwest of Gimboola-5. During drilling, Chancett-1 encountered oil shows and is currently drilling ahead in the main 7 7/8″ hole to TD.

About The Tintaburra 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 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

ACOR Management Helped Discover Oil on ATP-299 Approximately 30 Years Ago

Robert Kamon is a director of ACOR and one of the largest shareholders in the company. In the late 1970s, Robert noticed the East-West oil migration path in the Cooper/Eromanga Basin and stepped out approximately 92 miles east from the nearest oil & gas producing field (the Jackson Field) and leased what would be considered at the time a rank wildcat area, called ATP-299.

The 1st well drilled on ATP-299 was called the Tintaburra #1 and it came in with an initial potential of approximately 1835 barrels of oil per day from two zones. Successful well after well was drilled and completed on ATP-299 and a large oil company bought ATP-299 for several hundred million dollars.

Could PEL 112 Have the Potential to Be Another ATP-299?

ACOR Raises $4,500,000 to Drill 3 Wells on PELs 112 & 108 in South Australia on Approx. 1,325,715 Gross Acres

ACOR has signed a farmin agreement with Holloman Corporation of Odessa, Texas for the oil & gas exploration of ACOR’s PELs 108, 109, & 112, located in South Australia in the prolific Cooper/Eromanga Basin.

Holloman Corporation will become the Operator. Holloman Corp. has agreed to drill and complete 3 wells in exchange for a 66.667% Working Interest in all 3 areas. Holloman Corp. will carry ACOR for 16.6665(1) in the 1st three wells. After the 3rd well, ACOR will pay its part of any future exploration performed on the 3 areas, subject to the terms of the Joint Operating Agreement. The exploration manager is working to try to secure a drilling rig and will make every attempt to drill the 1st two wells in 2006 on PEL 112, subject to rig availability.

PEL 112 & 108 covers approximately 1,325,715 gross acres, and has never been drilled (no dry holes). ACOR and partners have just completed a new seismic survey on PELs 112 and 108 at a cost of approximately $1,100,000. The new seismic survey has discovered two large seismograph highs as well as 24 smaller ones. The 2 large seismograph highs are called C-23 & C-26, which cover a combined area of approx. 5,534 acres with excellent closure.

ACOR and partners have invested approximately 5 years and several million dollars in PELs 112, 108, & 109. ACOR management is very excited to have negotiated a 3-well carried position over the 3 areas, which substantially reduces the Company’s risk. The Carried Working Interest has potential to bring substantial revenue into the Company, should any or all of the three wells drilled prove to be commercial. ACOR’s carried working interest in the 1st three wells will exclude ACOR from all exploration and completion costs.

As stated in previous ACOR press releases, 12 new wells adjoining PEL 112 to the North, East & West have been slated for drilling in 2006. Six (6) wells out of seven (7) of the 12 wells have struck oil. This is, by industry standards, an exceptional 86% success ratio. The latest successful well adjoining ACOR’s PEL 112 is the Sellicks-3. The Sellicks-3 encountered 2 zones of oil shows in the lowermost sand of the Patchawarra Formation over the interval 2,153 meters to 2,155 meters. The DST #2 test recovered 85 bbls oil over a 90 minute flow period or approximately 1,365 bopd in the upper zone.

Sellicks-3 may have discovered a new oil pool as the lower pay zone demonstrates oil some 8 meters deeper than the deepest oil previously encountered in the Sellicks field. This new deeper zone has not been tested, but will be tested when the rig is released. It is planned initially to perforate the lowermost Patchawarra sand (2,153.4 meters to 2,155.4 meters) and put this zone on an extended well test before perforating and co-mingling with production from the higher oil zone (2,139.3 meters to 2,144.3 meters). The Sellicks-3 is to be completed as a multiple zone oil producer.

All the wells mentioned below adjoin ACOR’s 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 2700 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.

South Australia’s Cooper/Eromanga Basin is exploding with new drilling activity, rewarding investors with some of the most profitable production in the area. ACOR’s PEL 112 Is In The Middle Of It!

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 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     IP 276 BOPD  Largest Discovery so far, Warrior-1      IP2,800 BOPD 

Now you can see why ACOR management is so excited about raising the $4,500,000 to drill on PEL 112. In our opinion, any one of the recent discoveries could be a possible “Company-Maker” if discovered on PEL 112.

(1) ACOR owns 16.6665% Carried WI through the first 3 wells under PELs 108, 109, & 112. This includes the 2.834% carried working interest held by the 3 stockholders who paid ACOR’s half of the costs for new seismic.

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 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.