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Update on the Largest Continuous Oil Development and Exploration Drilling Program Ever Undertaken in SW Australia, a 70 Well Drilling Program on ACOR's ORRI Under ATP-299 - 2007 Drilling Program May Add 50 More Wells

Posted on: Thursday, 3 August 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 the successful drilling of three new oil wells Endeavour 6, Talgeberry 9, and Minni-Ritchi 1.

Drilling results from the Endeavour Oil Field on ACOR's ORRI continue to be very encouraging with 49 feet of net oil pay encountered in the Endeavour 6 well. Endeavour 6 well has been cased and suspended as a future oil production well. Rig PDI-724 was then released to the Endeavour 10 well drilling location.

The Endeavour 10 well spudded on July 29th. Oil shows were encountered during drilling and a 59 foot core is currently being cut over the oil reservoir section, the core will be used for detailed reservoir studies.

Rig PDI-735 spudded Talgeberry 9 well on July 23rd. The well encountered a total of 36 feet of net oil pay, and has been cased and suspended as an oil production well. The rig was then released to the Talgeberry 10 well location where it is currently drilling.

Rig PDI-721 drilled Minni-Ritchi 1 well approximately 1 mile southwest of the Cranstoun Field on ACOR's ORRI under ATP-299. Wireline logs suggested the Birkhead Formation reservoir section may be poor quality, but production tests recovered oil from the reservoir and the well has cased and suspended as a future oil production well. Rig PDI-721 moved to spud the Whynott 1 well. Whynott 1 is located approximately 1.9 miles east of Minni-Ritchi 1 and was spudded on July 31st.

The 70 Well Drilling Program on ACOR's ORRI has generated a number of notable results:

-- Extended the Mulberry Oil Field over a 1.8 mile trend.

-- Encountered up to 49 feet of net oil pay in several wells at the Endeavour Oil Field.

The most successful wells encountered so far in the targeted drilling pay zone (Birkhead) were at locations from the Endeavour Oil Field in the north and south to the Mulberry Oil Field and the Talgeberry Oil Fields.

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.

As previously announced, due to the continued success of the Tintaburra drilling program, planning has commenced to add around 20 additional wells to the current program. The current 51 well program has been revised down by 1 well to fifty 50 wells but with the addition of 20 wells the program is expected to total 70 wells.

One of the latest reports from the JV partner stated that 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 the Tintaburra drilling program. This does not count the additional 20 wells planned to be added on ACOR's ORRI.

The JV partner of ATP-299 reports that planning for 2007 is already underway. The 2007 drilling program on ACOR's ORRI will be dependent on results through 2006, but may involve an additional 50 wells.

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 70 wells to be drilled in 2006 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.

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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