$44.2 Million Raised On ACOR's ORRI VIC/P54 - Drill Longtom-3 Est. Reserves 320 BCF.

CISCO, Texas -- Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that the Joint Venture Partners of the offshore VIC/P54 have successfully raised $44.2 million. A portion of the capital raised will enable the operator to rapidly progress the commercialization of the Longtom Gas Field. The Longtom field contains an estimated 320 BCF of recoverable gas. The Longtom-3 well is expected to drill in May/June of 2006 at an estimated drilling and completion cost of approximately $A35,000,000. ACOR's ORRI under VIC/P54 is located in the prolific Gippsland Basin. VIC/P54 consists of 155,676 gross acres.

The operator reports that it has identified un-appraised reservoir sands in the Longtom structure with the potential to more than triple the current estimated 320 BCF of recoverable reserves. The sands were highlighted by the application of AVO (amplitude verses offset) geophysical technology. AVO technology has been highly successful in recent gas exploration and appraisal wells in the neighboring Otway Basin.

VIC/P54 History

The Longtom gas field was discovered by BHP in 1995 but was considered sub-commercial (70-120bcf) at the time due to the lack of maturity of the gas markets and the interpreted reservoir quality. A 386+ meter gas column was intersected in the Emperor Formation in Longtom-1. Longtom-2 was drilled in late 2004. A 400+ meter gas column was confirmed within the structure. 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. The upper reservoir section did not flow gas to surface - two third party engineers confirmed a subsurface test valve did not open; hence the well could not flow against the closed valve. A core from the upper reservoir section was taken and analyzed, confirming an excellent reservoir section highly capable of flowing gas. No gas-water contact has been intersected at Longtom to-date, suggesting deeper reservoir potential exists.

Contract Signed To Sell 320 BCF Of Gas On ACOR's ORRI Under VIC/P54

The Longtom Gas Sales and Toll Processing Agreement with a large major oil company will enable the operator to process and sell up to 350 BCF of gas of gas over 12 years (with an option for additional 91 BCF of gas) from the Longtom Gas Field located in Bass Strait on ACOR's ORRI under VIC/P54 through the major oil company's existing Patricia Baleen facilities near Orbost in Victoria. This deal provides commercial certainty for the commercialization of Longtom and provides an optimal development solution by minimizing the cost and risk of the development. The Longtom Gas Sales Agreement is conditional on the successful completion of the Longtom-3 appraisal well and the operator is confident that this will be achieved.

The Company anticipates that Longtom will prove to be a substantial resource capable of delivering significant long term cash flow and value for ACOR. The gas from the Longtom gas field will be processed through the nearby Patricia Baleen gas processing facilities located on the south coast near Orbost in Victoria. Processing the gas at Patricia Baleen will considerably reduce the operator's field development costs. It also has the additional benefit of utilizing existing infrastructure thereby reducing project technical risk and environmental impact.

Upon a successful completion of Longtom-3, the first gas is anticipated to flow from the Longtom Gas Field in mid 2008. Preliminary engineering studies suggest 2 wells (Longtom-3 and 4) will be sufficient to drain the contracted 320 BCF gas. Further development wells would be required for reserves beyond this. The wells will be completed sub-sea, connected via a manifold and piped 12km to Patricia Baleen facilities. The major oil company will process and purchase the gas from this point. The gross estimated capital expenditure is expected to be approximately A$160 million, including the cost of drilling and completing the Longtom-3.

The real upside from the Longtom exploration exists for ACOR in tapping into additional reserves beyond 320 BCF of gas. ACOR management is very confident in the operator of VIC/P54.

ACOR owns a 1/20th of 1% ORRI.

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.

More ACOR Assets in the Gippsland Basin

VIC/P60 - $4.6 Billion-Possible Est. Reserve Estimate For 1 of 6 Leads

Permit 60 located in the Bass Strait in Offshore Victoria and covers approximately 339,769 acres, it is also ACOR's largest working interest asset offshore. ACOR, along with Holloman Corporation have conduced a detailed re-interpretation of the 2-D seismic resulting in the identification of a structure that, if productive, has the potential to contain approximately 77,771,244 barrels of oil or $US4,666,274,644, at current market prices. The estimated possible reserve estimate for the A-1 lead has increased to approximately 9.2 times the original estimate. The average porosity for the Gippsland Basin wells is between 10% and 27%. One (1%) percent was originally used for the possible estimated reserve calculations on the A-1 Lead. The new calculation uses 19%, which is the correct average between 10% & 27%.

ACOR owns a 25% working interest.

VIC/P45

ACOR's ORRI under VIC/P45 is located in the prolific Gippsland Basin. VIC/P45 consists of 214,896 gross acres. The Kingfish Field begins 1-1/2 miles west of VIC/P45. The Kingfish Oil Field has produced in excess of 1.1 billion barrels of oil. Calculating at current crude oil prices of $US62.77 per barrel, this represents approximately $69.05 billion worth of production. The working interest partner has announced the location for the next well to be drilled on VIC/P45. The location is called, the Scampi Prospect. The prospect has the potential to contain mean reserves of 34 million barrels of oil, if hydrocarbons are present at the Scampi prospect. The WI partner states that a well could be drilled on VIC/P45 by May 2006, subject to rig availability, joint venture and other necessary approvals.

ACOR owns a 1/20th of 1% ORRI.

VIC/P53

ACOR's ORRI under VIC/P53 is located in the prolific Gippsland Basin. VIC/P53 consists of 182,858 gross acres. The WI partner of VIC/P53 has completed the shooting of 524 km2 of high resolution 3D seismic data in VIC/P53 earlier this year at an estimated cost of $US5,000,000. One of the prime purposes of 524 km2 3D seismic survey in VIC/P53 was to investigate the area to the east of the Veilfin-1 well, which produced oil and gas shows, referred to as the Bazzard Lead.

The WI partner is now processing the seismic data and will employ leading interpretation and depth conversion experts to interpret the data and to carry out detailed depth conversion calculations. By early 2006, the operator plans to have completed its studies and to be then ready to drill a well in the Permit. The permit starts 1.8 miles west of Halibut Oil Field where the average well has produced 60,000,000 bbls of oil or $3,766,000,000 worth of oil per well, at today's prices.

ACOR owns a 1/20th of 1% ORRI.

About Australian-Canadian Oil Royalties Ltd.:

ACOR management draws no cash salary. ACOR has NO LONG-TERM DEBT. ACOR's principal assets consist of interests in 15,293,450 gross surface acres of overriding royalty interest and 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.

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.