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$50 Million Dollar - 51 Well Drilling Program - 22 Wells Out of 28 Strike Oil - 11 Wells Now Online & Producing on ACOR's ORRI Under ATP-299

Posted on: Thursday, 20 July 2006, 12:01 CDT

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) reports that the JV partner of ATP-299 is pleased to announce a 79% drilling success as 22 wells out of 28 are successful, with 23 wells left to be drilled as the Tintaburra 51 well / $50 Million Dollar Drilling Program continues on ACOR's ORRI.

Of the twenty-eight (28) wells drilled to date, eleven (11) have been placed online as oil producers and one (1) as a water injection well. Eleven (11) wells are cased and suspended, awaiting production test. Five (5) wells have been plugged and abandoned with 23 wells yet to be drilled in this first phase of the Tintaburra drilling program. Further drilling is being planned to commence after completion of this $50 Million Dollar Drilling Program.

Rig PDI-724 spudded Endeavour 9 on July 4th. Oil shows were encountered while drilling and wireline logs indicated approximately 6 meters of net oil pay. The well was cased and suspended as a future oil production well and extends the Endeavour field approximately 1 kilometer to the northeast.

Rig PDI-735 spudded the Gimboola 4A well on July 1st and reached a total depth (TD) of 1385 meters. Oils shows were encountered in the Birkhead reservoir unit during drilling. Wireline logs indicate approximately 1.5 metres of net oil pay in the Middle Birkhead reservoir unit. The well is being cased and suspended as a future oil production well.

Rig PDI-735 spudded Talgeberry 12 on July 13th. Oil shows were encountered while drilling through the reservoir units of the Wyandra Formation and the Murta member. Wireline logs indicated over 9 meters of net oil pay. The well was cased and suspended as a future oil production well and the rig was released to the Talgeberry 13 location on July 18th.

After being released from the successful Endeavour 9 well, Rig PDI-724 spudded the Endeavour 7 well. Endeavour 7 has encountered oil shows while drilling through the Birkhead reservoir section and the well is currently nearing TD.

Rig PDI-721 - Poor road conditions due to heavy rain have prevented the rig moving to the next location Minni-Ritchi 1. The rig began the move on July 19th, and Minni-Ritchi 1 is expected to spud near the end of the week.

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.

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.

Update on the $35,000,000 Offshore Well Drilling on ACOR's ORRI

The Operator of VIC/P54 which consists of 155,676 gross acres located in the Gippsland Basin, Victoria has advised that on Tuesday, July 18th, the Longtom-3 well had reached a depth of 1005 meters measured depth and 16" casing has been set in the hole. Preparations are currently underway for commencing the drilling of the 9 1/2" pilot holes which will be drilled to a planned total depth of 3330 meters measured depth. The pilot hole will then be plugged back and the main horizontal well bore will be drilled through the Longtom gas sands.

Progress over the past week has been good and, on the current schedule, it is anticipated that the pilot hole will reach total depth by July 23rd. The operator has a 100% interest in the Longtom Gas Project which also includes front end engineering design studies based on the analysis of newly available seismic data. The operator has increased their best estimate of the Longtom Gas Field on ACOR's ORRI by 38% to 438 Bcf of possible gas reserves.

The Longtom-3 well is designed to evaluate the extent and productivity of gas bearing reservoirs encountered in the Emperor formation by the Longtom-1 and Longtom-2 wells. The Longtom-2 well intersected 96 meters of net gas sands over a gross interval of 260 meters. The lower reservoir section in Longtom-2 flowed at a stabilized rate of 18-19 mmcf/day over a 12 hour period -- an excellent result confirming the commercial potential of the previously untested lower reservoir section in Longtom. Longtom-3 is being drilled approximately 1.2 kilometers south-west from the Longtom-2 location.

Contract Signed With Santos to Sell 320 BCF of Gas on VIC/P54 under ACOR's ORRI

ACOR is also pleased to announce that the operator of VIC/P54 has signed the Longtom Gas Sales and Toll Processing Agreement with Santos. The agreement will enable the operator of VIC/P54 to process and sell up to 350 BCF of gas over 12 years (with an option for additional 91 BCF of gas) from the Longtom Gas Field located in the Bass Strait on ACOR's ORRI.

The gas from VIC/P54 will be processed through Santos existing Patricia Baleen facilities near Orbost in Victoria. The Longtom Gas Sales Agreement with Santos is conditional on the successful completion of the Longtom-3 appraisal well and the operator of VIC/P54 is confident that this will be achieved.

Upon a successful completion of Longtom-3, the first gas is anticipated to flow from the Longtom Gas Field by mid 2008.

The Longtom-3 well will be complex and will cost approximately $35 million to drill and complete, roughly double the average cost of a Bass Strait (Gippsland Basin) well.

ACOR anticipates that the ORRI under VIC/P54 will prove to be a substantial resource capable of delivering significant long term cash flow and value for our shareholders.

ACOR owns a 1/20th of 1% ORRI under VIC/P54.

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.

Source: Business Wire

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