CISCO, Texas, March 5, 2004 (PRIMEZONE) -- Australian-Canadian Oil Royalties Ltd. (OTCBB:AUCAF) announces a new extension to the eastern portion of the Park City Gas Field, located in Edmonson County, Ky., according to the Operator, Resources & Energy Technologies Company.
These wells are titled Acero 1, 2, and 3, which range in Initial Potentials estimated from 250,000 to 500,000 MCF per day. They are completed in the Ft. Payne Formation at approximately 1,100 feet. These are prolific wells for this drilling depth for Edmonson County, Ky.
The 96 miles of gathering pipeline system for the six mile wide by three miles north and south Park City Gas Field is being engineering to some extent for the full 50 well program to be online as soon as possible for revenue. Forty-five wells have been drilled and 5 wells are staked to complete the total drilling commitment. The gas plant to extract the excess nitrogen from the gas is in the final stages of funding; however, it is state-of-the-art with very efficient returns. Holloman Corporation of Odessa, Texas performed significant research to select the appropriate plant. The contract for developing the plant is currently being drafted. This will be very profitable for our Company as ACOR has a 12 1/2% Working Interest in these 50 wells. The plant is modular to accommodate future gas production. It is currently designed for 5,000,000 cubic feet of gas per day input; however, a portion of the consideration was the ability to process in excess of 5,000,000 cubic feet per day due to the ability to module the plant.
The gas plant will extract nitrogen and distillate from the gas to meet pipeline specifications.
Using a conservative projection at $6.00 (first column) or current price of $5.55 (second column) per MCF gas annual revenue to ACOR is:
First Year $500,915 $463,346
Second Year $494,357 $457,200
Third Year $486,687 $450,167
Gas prices depend upon demand. There is a 3% increase in the Holloman/Investor Group until plant payout for management and labor increases and the Bloomberg price was quoted on March 4, 2004 at $5.55.
Estimated revenue for ACOR in Year 4 @$6.00/MCF gas is $623,525 annually. Winter gas prices increase, summer gas prices decrease. This is not a projection on gas prices, yet we feel $6 is an approximate per MCF value as a yearly average.
Last week we struck gas and oil in a new well on the Dennison Lease just north of the McCombs No. 2, which blew-out and took two blowout specialists 5 tries to successfully contain the well.
AUSTRALIA
Our Company, ACOR, is bidding on concessions with three other industry partners, which could result in very promising revenues to ACOR. Results of the concession lottery may or may not affect revenues of ACOR.
Cooper Energy is planning to begin drilling PEL 100 under which ACOR holds a 2% Carried Working Interest in the first well, which should begin drilling in April. ACOR's potential revenue could be $22,200 per month from only one well before taxes.
This block offsets the Keleary No. 2, which had an Initial Potential of 6,000 barrels of oil per day.
Santos built a 140 kilometer oil line to Moomba Plant from Keleary, which runs through PEL 100 and provides necessary access.
CONCLUSION
The economic aspects of the Kentucky gas plant should benefit the Company and its shareholders to produce pipeline qualified gas products to market. Management is excited that field extensions have been discovered, which will enhance ACOR's assets, after the plant in Kentucky is constructed.
Management expects an increase in the market price of gas in the next 2 years as gas reserves continue to decline in the United States per Alan Greenspan's report to Congress on USA economics.
If you need any information on Australian-Canadian Oil Royalties Ltd. please contact Investor Relations at 254-442-2638 or access our website at www.acorltd.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.