Eleven (11) Well Drilling Program Announced for December on ACOR's ORRI in the Muthero Oil Field, Thungo Oil Field & Dilkera Oil Field in Australia's Prolific Cooper/Eromanga Basin.

CISCO, Texas -- Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that the JV partner of ATP 267 advises that an eleven well exploration, appraisal and development drilling campaign is scheduled to commence on ACOR's ORRI under ATP 267 during the December quarter of 2006.

The 2006 drilling campaign is designed to appraise the Birkhead oil pool discovered in the Muthero-3 well in December 2005 on the Muthero oil field where three appraisal wells will be drilled and one development well which will target the Murta Member and lower Birkhead in the vicinity of Muthero-3.

Three appraisal and two development wells will be drilled on the Thungo oil field targeting oil in the Murta Member. One exploration well, Dilkera North-1, will be drilled on a structural culmination to the north of the Dilkera oil field, and the other, Kamel-1, will be drilled on a structural culmination to the north of the Thungo oil field. Both wells are targeting oil in the Murta Member and the Birkhead Formation.

About ATP 267:

Three wells were drilled during the 2005 drilling program; Muthero-3, Winna-4 and Currambar-1. All three wells were successful on ACOR's ORRI under ATP 267. ATP 267, including Petroleum License (PL) 33, 50 & 51 consists of approximately 220,800 gross acres and is located in Queensland Australia in the prolific Cooper/Eromanga Basin.

The Muthero-3 appraisal well is located in the Petroleum Lease 51 on ACOR's ORRI. Muthero-3 was drilled to a total depth of 4692 feet. Oil shows were encountered in the Birkhead Formation and Murta Member during drilling. DST-1 flowed oil on final flow at 1030 BOPD through a '" choke at 25 psi. Muthero-3 was cased and suspended as a future Birkhead oil producer.

Muthero-3 commenced production at around 525 BOPD in February 2006, but ceased continuous free-flow in April when the water cut reached 20% of production. Surface facilities have been upgraded and a jet pump installed. The well is scheduled to be placed on continuous artificial lift shortly. The Muthero field surface facilities are being upgraded to accommodate the increased production rates.

The Winna-4 appraisal well spudded in Petroleum Lease 33 and reached a total depth of 4484 feet. The primary objective Murta Member reservoir of the Cooper-Eromanga Basin sequence was encountered as predicted with good oil shows. Winna-4 was cased and suspended as a future Murta oil producer. Winna-4 was flowing at around 50 BOPD at the end of the quarter.

The joint venture partners spudded the Currambar-1 exploration well in ATP 267P in the Cooper-Eromanga Basin of south west Queensland. The well, located some 3.7 km southeast of the Dilkera-2 oil well, reached a total depth of 4554 feet. Moderate to fair oil shows were recorded in the Murta Member, with fair to poor shows in the Westbourne Formation.

Two DSTs were conducted over the interval 1043-1052 meters in the Murta Member, but both failed due to mechanical problems. The well was cased and suspended as a future Murta oil producer. The well is expected to be a typical Murta producer and flow initially at an average rate of around 100 BOPD after fracture stimulation.

An application has been made for a Petroleum Lease over the area of the Currambar-1 oil discovery in ATP 267P adjacent to Petroleum Lease 51. The well has been completed for production and is awaiting grant of the Petroleum Lease before being tied into nearby surface facilities and placed on production.

ACOR management is very excited about the potential revenue from the eleven (11) new wells set to begin drilling in December of this year.

ACOR owns 17.15% of 1% ORRI under ATP 267 which include Petroleum License 33, 50, & 51.

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.