$160,000,000 Raised to Develop the Offshore Australia Longtom Gas Field on ACOR's ORRI.

CISCO, Texas -- Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that the operator of VIC/P54 has secured $AUS160,000,000 to fund the development of the Longtom gas project on ACOR's ORRI. The first gas from the Longtom project is forecast for the third quarter of 2008, estimated at approximately 11,000 (BOE) barrels of oil equivalent per day.

The operator has also submitted its Longtom Gas Field Final Development plan and applied for a production license with the relevant government authorities. The operator anticipates award of the production license to be forthcoming during the third quarter 2007.

The pipeline installation and the drilling of an additional well are scheduled for the first half of 2008 in order to meet the first gas production target. Gas from the Longtom field on ACOR's ORRI will be produced via sub-sea wells linked by a new 12" pipeline to the Santos owned and operated Patricia/Baleen gas facility.

Gas Sales and Processing Agreements

Contracts to process and purchase up to 318 BCF of gas and associated liquids from the Longtom field have been revised to accommodate the financing arrangements with the operator's current financiers. All key commercial terms for the revised gas sales agreement remain unchanged from the agreement signed with Santos in December 2005.

Under the agreement the operator will deliver raw gas from the Longtom field to the Santos owned and operated Patricia/Baleen gas processing plant near Orbost. Santos will process and purchase the processed gas and associated liquids. Santos has agreed to process up to 409 BCF of raw gas from Longtom and purchase the first 318 BCF of the sales gas at defined prices. The agreements are subject to regulatory approvals relating to the project.

Santos also has an option to acquire up to 35% interest in the Longtom project.

About the Longtom Gas Field

The original Longtom-1 discovery well intersected a 1312 foot gas column in the Emperor formation. This was confirmed by the Longtom-2 appraisal well drilled by Apache Energy Limited ("Apache") and the operator in late 2004, which intersected a gas column in excess of 1312 feet long in five separate reservoir zones.

The Longtom-3 well drilled in September 2006 by the operator on a sole risk basis, confirming the commercial potential of the Longtom field when a sustained flow rate of over 75,000,000 cubic feet of gas per day was achieved during the second production test over the field's lower reservoir sections. These lower reservoir sections contain over 80% of the hydrocarbon volumes in the Longtom field. A test of the upper reservoir sand which did not flow in the Longtom-2 well also confirmed the capacity of this sand to flow.

A second objective in the VIC/P54 permit is the Longtom Upper prospect, a lead which represents a possible extension to the Longtom field containing up to 250 BCF of additional gas which will be tested by a future exploration well.

VIC/P54 is located is located in the Gippsland Basin in the Bass Strait and is one of four properties covering 927,199 gross acres under which ACOR holds ORRI's.

Note: Barrels of oil equivalent ("BOE") as stated above is based on the energy equivalent of oil to gas.

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

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.

ACOR's offshore assets in the Bass Strait are all adjacent to giant producing fields and proximal to existing infrastructure and an expanding gas market.

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.