2008-07-08 23:43:07 -

www.aussieoil.com - Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that Nexus Energy Limited, the operator of VIC/P54 including the production license VIC-L29 advises that the Longtom-4 development well in the Gippsland Basin, offshore Victoria, had reached a depth of approximately 8,530 feet.

The Longtom-4 development well has encountered the first

gas sand of the Admiral formation as anticipated. Intermediate wireline logs are now being run.

Upon completion of these wireline logs, the next operation will be to run 10 3/4 inch casing. Intermediate wireline logging results will be announced after the completion of data acquisition and interpretation.

After casing the current hole section, well operations will include drilling and logging of the pilot hole, followed by the drilling, completion and production testing of the horizontal section of the well.

Longtom-4 is then planned to be suspended as a future gas producer, awaiting connection to the pipeline later this year.

ACOR owns a 1/20th of 1% ORRI under VIC/P54 (VIC/L29).

Longtom-4 is being drilled by the West Triton jack-up rig and is the second development well for the Longtom gas project. The Longtom-3 well, drilled during the third quarter of 2006, is ready for commercial production with no further rig intervention required. The flow capacity of Longtom-3 alone is expected to be sufficient to supply the anticipated maximum contract rate requirements for the Longtom field. Timing of a planned third development well will depend on the results of Longtom-4 and the field's production performance over time. The current plan assumes this well will be drilled two to three years after project start-up.

Gas produced from the Longtom wells will enter a new 12 inch pipeline and will be transported from the field to the end of Santos' existing Patricia-Baleen pipeline, approximately 11.8 miles away. Nexus will construct this pipeline and the associated control lines and equipment. The raw gas will then continue along the Patricia-Baleen pipeline to shore where it will be processed at Santos' existing onshore gas plant. Santos will install new equipment at the plant capable of processing the Longtom gas. This will primarily involve facilities for the stripping of condensate from the gas and the subsequent stabilization, storage and export of the condensate.

About VIC/P54 (VIC/L29)

The Longtom gas field development has been given the green light by the operator based on booked 2P reserves of 58,000,000 barrels of oil equivalent, with the Longtom-3 well alone being able to supply the full contracted amount of 11,000 barrels of oil equivalent per day, or a total of 350 Billion Cubic Feet of gas to Santos from Q1 2009 when first gas is due to flow.

The Longtom-3 well was a make or break well for the future of the field, drilled in Aug 2006, and sole risked in a bold move by the operator after regular permit partner Apache declined involvement. The well reached a total measured depth of 15,341 feet in late Aug 06, having intersected a total of 3,379 feet of gross gas sand in the Admiral formation which were deemed to be in connection with those at the Longtom-2 well based on pressure data.

The first production test over the upper sands (the "400 sands") flowed at 23,000,000 cubic feet per day through a 1" choke in early September, but only a week later, that result had been blown out of the water. The lower sands of the Admiral Formation ("100, 200 & 300 sands") flowed on test at an estimated rate of 77,000,000 cubic feet per day through a 1- 1/4" choke, with the maximum rate achieved using the separator being 59,000,000 cubic feet per day through a 60/64" choke, although rates were limited by equipment capacity.

The operator has booked 2P reserves of approximately 323 Billion Cubic Feet of gas and 4,000,000 barrels of condensate in Apr 2007 and considered the Longtom Gas Field as sufficient enough gas reserves to proceed with the development of the field.

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.

Some of the very best oil production in the world is found in the Gippsland Basin. Take for example, the Halibut Oil Field. The average well in the Halibut Oil Field has produced 60,000,000 barrels of oil per well or $8,160,000,000 worth of oil per well, at current crude market prices.

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.

Australian-Canadian Oil Royalties Ltd.
Investor Relations, 254-442-2638
acor@classicnet.net