Feb. 28, 2006--
Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that on February 15, 2006, Senior Management of a large oil company from Beijing, China traveled to the offices of Australian-Canadian Oil Royalties Ltd., located in Cisco, Texas to discuss and evaluate ACOR's working interest properties. The Chinese oil company sent a management team to evaluate the possibilities of possibly exploring for oil & gas on ACOR's PEL 108, 109 & 112 properties, located in the Cooper/Eromanga Basin of South Australia. The evaluation team spent a week with ACOR management looking over the data.
The Chinese oil company is one of the largest integrated energy and chemical companies in China and owns several drilling rigs.
ACOR management was very pleased with the visit. ACOR is cooperating 100% in helping them with their due diligence of PEL 108, 109, & 112.
About PEL 112:
Pel 112 covers 818,904 acres and has never been drilled and is located in the Cooper/Eromanga Basin of South Australia. Eleven (11) new wells have been announced for drilling this year on the adjoining PEL to the east and to the north of ACOR's PEL 112. The production is multiple pay with wells averaging a reported $37,000,000.00 a year per well on the adjoining block to the east and wells averaging a reported $33,000,000.00 a year gross on the adjoining block to the north of PEL 112. The wells are approximately 6,000 feet deep and cost around $1.5 million dollars to drill and complete.
This is some of the most profitable production in onshore Australia. ACOR has just completed a new seismic survey on PEL 112 and discovered two large seismograph highs as well as 28 smaller ones.
ACOR owns 41.5% WI under PEL's 108, 109, & 112.
80% Drilling Success on ACOR's PEL 115 -- Drilling 4 More Wells
ACOR is pleased to announce that the Mirage-2 well is being completed as a potential Murta Formation oil well and the drilling rig released. The operator has drilled a total of five wells on PEL 115. Four out of five wells drilled on PEL 115 have been completed and put into production or are awaiting production testing. This gives PEL 115 an impressive 80% drilling success ratio. Mirage-2 is currently shut-in pending the arrival of a swabbing unit to swab the well in for production. The operator has four more wells planned to drill back-to-back on PEL 115.
Mirage-3 Development Well Spuds
The Operator for the PEL 115 Joint Venture advises that Mirage-3 oil development well commenced drilling at 0400 hours Central Standard Time (CST) today. The primary target for Mirage-3 is the Murta oil sands at 1,316 meters, producing 970 meters to the southwest at Mirage-1 and being completed for oil production 400 meters to the southwest at Mirage-2.
Mirage-1 was discovered in 2004 and began oil production in January 2005. The Mirage-1 well produces from the Murta Formation and has produced over 37,000 barrels of oil to date. The operator for the PEL 115 advises that interpretation of the 3D seismic data is indicating that the oil/water contact encountered in Mirage-1 is below what has been mapped as the structural closure of the Mirage feature.
This means that the Mirage Oil Field has either a stratigraphic component or the Mirage Oil Field is larger than first mapped. The interpretation of the 3D data set suggests that Mirage-1 could be part of a larger feature covering approximately 20 square kilometers that includes the Lightning and Jindivik prospects five kilometers to the northeast.
Using conservative reservoir parameters, such an area has the possibility of containing up to 20 million barrels of oil in place. Further exploration drilling is required to confirm this possibility and this will take place after the Mirage-3 & Mirage-4 development wells, with the drilling of the Lightning-1 and Jindivik-1 exploration wells.
ACOR owns a 1/10th of 1% ORRI under PEL 115.
Fairbridge-1 Update:
ACOR is pleased to announce that the operator of PEL 100 has secured the services of the Ensign #5 workover rig to undertake cased hole production tests on the Fairbridge-1 well. The expected start date of the tests is around May 17, 2006. The start date is subject to workover operations prior in the sequence.
Fairbridge-1 was drilled in January 2006. Following problems with the open-hole production test equipment, the well was cased and suspended with the intention of coming back at a later date to fully appraise the reservoir zones of interest. The testing program is expected to take less than two weeks to complete.
Following the final evaluation of the data, three zones of
interest will be tested:
Objective
#1 Lower Poolowanna
#2 Upper Poolowanna
#3 Birkhead
ACOR owns a 2% WI under PEL 100.
About Australian-Canadian Oil Royalties Ltd:
ACOR management draws no cash salary. ACOR has NO LONG-TERM DEBT. ACOR's principal assets consist of approximately 15,293,450 gross surface acres of overriding royalty interest and approximately 8,900,776 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.
