CISCO, Texas, Nov. 25, 2003 (PRIMEZONE) -- Australian-Canadian Oil Royalties Ltd. (Nasdaq:AUCAF) announced drilling has begun on VIC/P45 using BHP rig Ocean Epoch. This rig can drill to 20,000 feet; however, the main objective is to initially drill to 7,500 feet deep into the Latrobe Formation, which should be reached in approximately 10 days. This offshore location, AUCAF's first offshore well in Australia, was located by 3-D seismic as an eastern extension of the Kingfish Field in the Bass Straits, located 2.4 miles along an anticlinal axis. The Kingfish Field has produced 1.1 billion barrels of oil to date. IMI, an independent engineering firm, estimates reserves for the 214,000 acre VIC/P45 at 350,000,000 barrels of oil and 4 trillion cubic feet of gas. AUCAF has a 0.05% of 1% Overriding Royalty Interest on VIC/P45. The enormous fields on both sides, Kingfish at 76,000,000 barrels per well and the Mackerel at 3,000,000 barrels per well are both producing from the top of the Latrobe. Gross production from the Kingfish and Mackerel respectively are 1.1 billion barrels and 450 million barrels.
AUCAF is continuing to develop oil and gas wells in both Edmonson and Adair Counties in Kentucky. Acidization is beginning for up to 34 wells this week and a total of 50 wells by December 31, 2003 will complete the drilling program. All wells tested have been commercial and negotiations with investors is proceeding to fund the $5,000,000 gas plant and gathering system possibly by the end of the year. AUCAF owns a 1/8th working interest in the wells.