ACOR Officially Begins Exploration Program in South Australian Basin With 52% `Wildcat' Drilling Success Ratio.

CISCO, Texas -- Five (5) Wells Currently Drilling or Being Completed for Production Testing in South Australia & Queensland on ACOR's Vast ORRI Holdings

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that Terrex Seismic started on May 25 shooting the approximately 190 square kilometers of seismic data on PEL 112 & 108, located in the Cooper/Eromanga Basin in South Australia.

ACOR's South Australia holdings are all part of the ex-Santos acreage that became available to bid on in 1998. ACOR acquired PEL's 108, 109, & 112 in 2000. ACOR and its president have invested several hundred thousand dollars on the three areas and approximately three years to get clear title, so the company could begin exploration on these vast areas. Since the ex-Santos acreage release, new junior oil companies like ACOR have begun their exploration program with amazing results. See below:

31 wildcat wells were drilled on the ex-Santos areas

16 discovered new oil or gas pools

31 divided by 16 = 52% drilling success

A total of 149 gas fields and 57 oil fields have been discovered in the Cooper/Eromanga Basin since 1963.

Number of wells drilled in Cooper/Eromanga Basin (to August 2004):

468 exploration wells, 388 appraisal wells and 615 development wells

With these exciting figures you can see why ACOR management is very excited about the company's earnings potential.

ACOR owns 41.5 % WI interest in PEL 112, 108, 109

ACOR's vast ORRI holdings Update.

PEL 115

After 30 days of production testing at the Mirage-1 well in PEL 115, located in the prolific Cooper/Eromanga Basin in South Australia, the Mirage-1 has produced 6,655 barrels of oil for an average of 221 barrels of oil per day, reports junior partner Impress Ventures.

The choke size has been reduced over this period from 19/64ths to 14/64ths to maintain a wellhead pressure of about 60psi. There has been no evidence of water production to date, according to Impress.

"The purpose of the test is to gain knowledge of the production characteristics of the Mirage Field, to assist in determining ultimate reserves and help in placement of development wells," the company said.

"The results to date, although early in the test, are encouraging. The well would produce significantly more under artificial lift but the test is being undertaken under controlled parameters to gain the best data to enable efficient development of the field and accurate reserve estimations."

The partners now plan to spud a development well Mirage-2 well in July in hopes to increase the field production.

Meanwhile operator Victoria Petroleum is sourcing the necessary pump and tank equipment to enable the Ventura well -- located elsewhere in the same permit -- to be placed on production. Refurbishment of a pump is currently underway and the well should start producing in about 30 days, Impress said.

ATP 299

TARBAT-12, in the Tintaburra Block on ACOR's ORRI, located in Southwest Queensland has been cased as a new oil development well, reports junior partner Drillsearch.

"The joint venture has cased the well as a potential future multi-zone oil producer," the company said.

"It was designed to extend the Tarbat pool and develop the reserves in several zones. Tarbat-12 encountered good to strong oil shows in the Murta and Westbourne Zones and fair to good shows in the Hutton Sandstone. Logging established productive reservoir quality in several zones."

Located about 80 meters west of Tarbat-1 and 115km north-east of the Jackson oil facility, the well reached total depth of 1,230 meters on May 10. "Following completion of Tarbat 12, the joint venture operator has proposed a development well at the Mulberry field, named Mulberry-5," said Drillsearch managing director Philip Kelso.

Mulberry-5 -- to be drilled about halfway between the Mulberry-1 discovery well and the Mulberry-3 appraisal well -- was due to spud yesterday.

About Australian-Canadian Oil Royalties Ltd:

ACOR management draws no cash salary. ACOR has NO LONG-TERM DEBT.

ACOR's principal assets consist of 15,293,450 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 to see more information at: http://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.