CISCO, Texas, May 3, 2004 (PRIMEZONE) -- Australian-Canadian Oil Royalties Ltd. (OTCBB:AUCAF) announces the following:
KENTUCKY:
NEW DEEPER PAY DISCOVERED
Jimmy Lemmon from our Cisco Office and Andrew Sakhai from our President's Office in New York flew to Kentucky to see the new Idell Howard Well, which drilled 41 feet of lower corneferous pay at 1,800' (600' deeper than the gas wells). They were impressed because the well was flowing clean oil with no water after clean-up. The well also encountered gas at 1,100' in the Fort Payne formation.
Management is excited about the 44 plus drilled wells, which are gas, with some oil, in the New Park Cities Gas Field located in Edmonson County. Additional new oil wells are located in Adair County. The nitrogen and liquid hydrocarbon removal plant and gas gathering system are being negotiated and should conclude shortly to allow sale of the gas. Oil has been sold. We hope for an increase in the ACOR stock bid price when the plant negotiations are completed. Several groups are very much interested in the plant and gathering system financing. Only three wells have been acidized. Pending good weather, the Operator plans to acidize two wells per week.
Attached are the financing pro-formas for the plant. This is an excellent investment for those involved and is essential to the sale of the gas in the pipeline by ACOR. See the attachment. The investment group is repaid by gas revenues in three years. However, the investment group owns the plant after payout and continues to receive revenues as shown with a 3% annual price increase to investors with some tax shelter for seven years. Carl Davies, PE has estimated gas in place of 13.1 Billion cubic feet for the first 35 wells.
AUSTRALIA:
Cooper Energy NL announced spudding the Arcadia-Grove No. 1 on April 18, 2004. As of April 28, 2004, the well was drilling ahead at 7,680 feet with a planned depth of 9,022 feet.
ACOR has a 2% carried working interest in this well. Thereafter, ACOR has a 2% working interest. The lease covers 156,659 acres. For daily reports check the website and choose Executive Summary, website: www.cooperenergy.com.au. This could be a very important asset for ACOR.
Further, ACOR has applied for two oil and gas concessions Offshore Victoria Australia being V03-3 and V03-4. If one or both concessions are granted, ACOR would have a 25% working interest along with three other industry partners, who each own a 25% interest. There is no guarantee either or both will be granted to ACOR; however, the estimated gas reserves on the 301,469 acre tract of V03-3 are 350 billion cubic feet of gas and three million barrels of condensate in the Angler Structure, which would gross approximately $US 2 Billion at the current market price.
V03-3 is located 6 miles east of the Kingfish Field, which has produced 1.1 billion barrels of oil from 41 wells. There are seven additional structures and leads.
V03-4 covers 339,769 acres and a very large structure. Four oil structures and 5 leads have been identified by the Australian Governments. The same industry group having each a 25% interest has applied for this concession. The Group has ordered all available 2-D and 3-D seismic for both applications. The Group Members, consisting of two individuals and two corporations, have combined assets of $203,672,638 in Australian Dollars.
Management is confident about both the Kentucky and Australian projects and the potential annual revenue and reserves for the Company.
Thank you for your interest in ACOR. If you need any information on ACOR please contact Investor Relations at (254) 442-2638 or 1-800-290-8342. You may access our website at www.acorltd.com and our e-mail address is acor@classicnet.net.
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.
NEWS FLASH
The Acacia Grove-1 is running 111 feet up-dip to the nearest well drilled on the same structure and has oil and gas shows in the top of the Poolowanna. The Keleary to the north, in the same structural primary trend is producing from the Poolawanna (Early Jurassic) and the Tinchoo (Middle Triassic) formations. The IP was 6,000 barrels per day and the Keleary No. 2 held up at 1,000 barrels per day for years.
Following is the Drilling Report released by Cooper Energy NL on April 28, 2004:
Cooper Energy NL advises the status of Acacia Grove-1 at 0600 (CST),
as follows:
Location: PEL 100; approximately 118 km north
northeast of Moomba and approximately
3 km to the south of the Telopea
oil field.
Spud Date: 18:00 hours on Sunday April 18th
Days Since Spud: 10
Depth at 0600 hours: 2372 metres
Summary of Operations: The top of the Poolowanna Formation
has been provisionally picked at 2333
metres, which is 7 metres high to the
pre-drill prognosis of 2340 metres.
The interval 2368-2372 metres
recorded hydrocarbon shows that were
indicated by increased gas
chromatograph readings and 5-20%
fluorescence over a generally tight
sandstone section.
Per Cooper Energy NL on April 30, 2004, they are pulling out of the
hole for a bit change and drillstem testing at 2472 metres.
ATTACHMENT
GROSS PLANT ANALYSIS PRIOR TO PLANT PAYOUT
1st Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $1.35 = $ 6,750/day
360 days @ $6,750 = $ 2,430,000/year
Less Note ($147,619.92/mo.) = $ 1,771,439/year
Net After Note Payment = $ 658,561
Depreciation/Yr. For 7 years = $ 714,286
Interest 1st Year = $ 170,867
2nd Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $1.39 = $ 6,950/day
360 days @ $6,950 = $ 2,502,000/year
Less Note ($147,619.92/mo.) = $ 1,771,439/year
Net After Note Payment = $ 730,561
Depreciation/Yr. For 7 years = $ 714,286
Interest 2ND Year = $ 105,658
3rd Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $1.43 = $ 7,150/day
360 days @ $7,150 = $ 2,574,000/year
Less Note ($147,619.92/mo.) = $ 1,771,439/year
Net After Note Payment = $ 802,561
Depreciation/Yr. For 7 years = $ 714,286
Interest 3RD Year = $ 37,792
GROSS PLANT ANALYSIS AFTER PLANT PAYOUT
4TH Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $0.72 = $ 3,600/day
360 days @ $3,600 = $ 1,296,000/year
Depreciation = $ 714,000
5TH Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $0.74 = $ 3,700/day
360 days @ $3,700 = $ 1,332,000/year
Depreciation = $ 714,000
6TH Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $ 0.76 = $ 3,811/day
360 days @ $3,811 = $ 1,371,960/year
Depreciation/Yr. For 7 years = $ 714,000
7TH Year Holloman/Investor Group Plant Inlet: 5MM/day
5MM @ $ 0.78 = $ 3,900/day
360 days @ $3,900 = $ 1,404,000/year
Depreciation = $ 714,000
While the wells are shallow, the gas in place evaluation shows a gross of 13.1 billion cubic feet of gas in place for the first 35 wells. Decline is not anticipated as the Operator is negotiating to drill another 50 wells in the area beginning in the Summer of 2004, which should offset any decline by production.
The plant is designed to process 5,000,000 cubic feet per day; however, it is modular and can accept additional volume if necessary with purchase of additional equipment, compressors, etc.
Any tax advantages are the sole responsibility of each or any investor. The plant would be amortized, in an estimated three years. Percentage of ownership depends upon capital investment. It is assumed the plant could be financed on a basis of a 4% annual interest rate.
The estimated turnkey price is $US 5,000,000 for the plant and gathering system per the above calculations.