Chelsea Oil and Gas Ltd. (fka COGLF)

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Australian-Canadian Oil Royalties Gives an Update on Recent Events
Wednesday December 3, 9:01 am ET


CISCO, Texas--(BUSINESS WIRE)--Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that the company has recently purchased an ORRI under VIC/P59 in the Gippsland Basin. The operator of VIC/P59 is Apache Energy Limited.
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Apache Energy is currently moving the rig to begin drilling the Madfish-1 exploration well in the offshore Gippsland Basin, targeting possible mean reserves of approximately 33.6 - 41.7 million barrels of oil.

This well in VIC/P59 will be drilled by the Ocean Patriot semi-submersible drilling rig. The Madfish-1 well will be followed by the Elver-1 prospect that will target possible mean oil reserves of approximately 39.5-51.3MMbbl respectively.

The Madfish-1 well is located in about 1279 feet of water and has a planned total depth of approximately 9,284 feet while the Elver-1 prospect has a planned total depth of approximately 10,334 feet.

About VIC/P59

VIC/P59 consists of 301,468 gross acres and is located offshore in the Gippsland Basin. VIC/P59 is adjoined by the Blackback Oil Field with estimated reserves of 80,000,000 barrels of oil.

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.

Click on link below to see a map of VIC/P59.

http://www.aussieoil.com/site/acor-map.htm

ACOR owns a 1/20th of 1% ORRI under VIC/P59.

PEL 112 Update

The Cooper/Eromanga Basin’s western margin had been more or less written off, but a handful of companies are turning it into a bustling oil province.

Companies such as Beach Petroleum, Cooper Energy, Stuart Petroleum, Victoria Petroleum & ACOR that took up Cooper/Eromanga Basin western margin acreage remain optimistic about the region’s potential.

Victoria Petroleum states: “The typical model is gas generation in the middle of the basin pushing oil out towards the margins.”

Victoria Petroleum states: “In the US, people would have been drilling the edges, but we have done it backwards in Australia.”

In PEL 92 block, Cooper Energy states: “Cooper Energy and Beach [the operator] have discovered five oil fields and have an exploration success rate of 45 per cent,” “But since switching from 2D to 3D seismic, Cooper and Beach [the operator] have had a 100 per cent drilling success rate demonstrating that the oil migration risk is relatively low and the structural risk is being addressed by the application of new technology.”

PEL 92 has proved to be an astounding success story. Sellicks was followed by Christies (2003), Silver Sands (2006), Callawonga (2006) and Parsons (2007).

Cooper Energy states: “The completion of the Parsons high volume artificial lift project alone is expected to boost the PEL 92 joint venture production to approximately 6000 barrels of oil per day, subject to downstream production constraints.”

PEL 92 is North of ACOR’s PEL 112.

Holloman Energy Corporation (OTC BB:HENC.OB - News) has announced this year that Holloman Energy is beginning a drilling program of shallow test wells (200m) on its Australian Petroleum Exploration Lease (PEL) 112, to confirm the location of physical structures identified by seismic data.

This shallow drilling is in advance of a multi-well drilling program with total depths to approximately 6,500 feet, and is expected to start late in the fourth quarter of 2008 to early 2009.

On advice of Holloman Energy’s Australian based technical consultants, a recommendation has been made that Holloman Energy first drill “Up-hole” tests at key strategic points on the specific seismic lines which have been used to define the target structures. The results from these Up-hole tests will be used to fine tune the exploration well locations.

Up-hole tests, while not required, are not uncommon in this part of the Cooper Basin due to a surface layer of thick sand dunes. Upon completion of these Up-hole tests, pending successful outcomes, Holloman Energy will apply for drilling permits from the Australian Government.

The proposed well locations are located in the upper panhandle portion of the Company's 554,000 acre PEL112 concession in Australia's prolific Cooper Eromonga Basin.

ACOR owns a 13.83% carried W.I. in the next 2 wells under PEL 112 and then ACOR will pay its proportionate part for future exploration cost.

New Oil Field Discovery on ACOR’s ORRI under PEL 111

ACOR is pleased to announce that the operator, Victoria Petroleum N. L. has stated that the Warhawk-1 well was completed for production on ACOR’s ORRI under PEL 111 located in the prolific Cooper/Eromanga Basin in South Australia.

Victoria Petroleum N. L. advises that the Warhawk-1 exploration well has been completed for production with the running and cementing of 7 inch casing to a total depth of 1,868 metres.

During the drilling of Warhawk-1, oil shows were observed over the gross interval of 1,729-1,748 meters in the target Birkhead Sandstone. Initial analysis of the wire line logs indicated that the Birkhead Formation reservoir section is oil bearing but that the reservoir section is not as well developed as encountered in several of the Growler oil wells in the Growler Oil Field, 10 kilometers to the south.

Several attempts to open hole test the Birkhead oil zone with straddle drill stem tests were made, but were unsuccessful due to equipment failure. A wire line pressure and sampling program was then carried out and confirmed the presence of thin permeable oil bearing sandstones within the Birkhead Formation.

The PEL 111 Joint Venture has elected to complete the well for future production.

ACOR owns a 1/10th of 1% ORRI under PEL 111.

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." Our stock price has doubled in the last seven days!

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.




Contact:
Australian-Canadian Oil Royalties Ltd.
Investor Relations, 254-442-2638
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