Frequently asked questions about ACOR

Can you please give us a brief overview of ACOR?

Australian-Canadian Oil Royalties Ltd. (herein called ACOR) is a publicly-traded oil company trading on the NASDAQ OTC Bulletin Board Exchange under the trading symbol AUCAF. ACOR is a Canadian Corporation incorporated in Vancouver, British Columbia in 1997.

Australian-Canadian Oil Royalties Ltd. 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 & Offshore Australia in the Gippsland Basin.

What is ACOR’s corporate strategy?

Australian-Canadian Oil Royalties, Ltd. is engaged in applying for the best available onshore & offshore Australian Government bid areas, if ACOR is awarded a bid area, then ACOR will study the current Geology to identify possible leads, then ACOR raise the funds to shoot 2D or 3D seismic to convert leads into firm prospects, then ACOR will locate a suitable a drilling partner to assume the working interest obligations, keeping a overriding royalty interest.

An ORRI or carried working interest is the best position to be in as it eliminates the risk and expenses associated with oil & gas exploration, giving the company the best opportunity to increase shareholder value.

Since 1954, the largest shareholder of ACOR has used these same techniques and has leased over 1 Billion acres for oil & gas exploration in foreign countries.

ACOR is pleased to have this kind of expertise as part of its management team.

What are some significant changes/developments that you expect in this industry and your markets?

Because of the increase in crude oil prices, the competition for the Australian offshore & onshore bid areas that ACOR applies for are getting a lot more aggressive.  ACOR can sometimes overcome this by bringing in outside groups or individuals with strong financial strength and/or technical experience to improve ACOR’s chances of being awarded the areas.

What is the impact of emerging technology and your response?

Australian Seismic companies are just now beginning to offer a new seismic technology using, 4D seismic by some of the bigger operators.  Because it is new, it is very expensive.  This does not apply to ACOR, 2D and 3D is suitable for our needs.  This would be a decision for the final drilling partner to make.

What are the major opportunities and challenges for ACOR?

ACOR is applying for areas onshore & offshore Australia that are in the vicinity of some giant discoveries and production. Australia is a "hot spot" for oil & gas exploration and ACOR is positioned for possible "Company-Maker" discoveries. ACOR's working interest and overriding royalty interest are located offshore & onshore in the best producing basins.

For example, ACOR has overriding royalty interest in several offshore blocks in the Gippsland Basin.  VIC/P45 is adjoins the Kingfish Oil Field.  The Kingfish Oil Field, the largest oil field in Australia, has produced 1,100,000,000 barrels of oil since its discovery. There are currently 23 producing wells in the field. The permeability in the pay section ranges between 5,000 and 40,000 millidarcies, which is extremely high. On mapping there are 14 structures on VIC/P45, which includes one oil and gas field discovery with 16 pays and over 1,000 feet of pay section and a second with one gas pay section. This was a discovery well drilled off projected prospects.

Some of the very best oil production in the world is found in the Gippsland Basin. Take for example, ACOR’s VIC/P53 block is located near the Halibut Oil Field. The average well in the Halibut Oil Field has produced 60,000,000 bbls of oil per well or $3,000,000,000 worth of oil per well, at current crude market prices.

Talk about opportunities, here is a prime example. ACOR’s ORRI under VIC/P54  just experienced a Major gas discovery.  In July 2006, the Longtom 3 well intersected a total of 3,379 feet of gross gas reservoir on ACOR's ORRI.  The operator of VIC/P54 signed a $1 billion gas contract with Santos Ltd.  The VIC/P54 Operator Estimates that Longtom Gas Contract & Condensate Are Equivalent to Approximately 57 Million Barrels of Oil or $2,800,000,000 on ACOR's ORRI.

What are the challenges that await ACOR?

Trying to find more assets like VIC/P54, VIC/P45, VIC/P60,  PEL 112 &  PEL 108 for the company.

What is the role of acquisitions or joint ventures for ACOR?

As stated before, ACOR is engaged in applying for the best available onshore & offshore Australian Government bid areas, if awarded the area, then study the current Geology to identify possible leads, then raise the funds to shoot 2D or 3D seismic to convert leads into firm prospects, then locate a suitable a drilling partner to assume the working interest obligations, keeping a overriding royalty interest.

ACOR would entertain a possible merger with a solid oil company or have an solid company or individual make a stock equity investment in ACOR.

What are some benchmarks or milestones that investors should use or watch for to judge your progress?

ACOR management can sum that up in one area: PEL 112

In 2005, ACOR and partners completed a seismic survey on PELs 112 and 108 at a cost of approximately $1,100,000. The new seismic survey discovered two large seismograph highs as well as 24 smaller ones. The giant seismograph highs are called C-23 & C-26, which cover a combined area of approx. 5,534 acres, both with excellent closure. 

In 2006, ACOR farmed in a drilling partner to drill a minimum of three (3) wells on PELs 112 & 108 in South Australia. PEL 112 represents one of ACOR’s biggest holdings. ACOR owns a 16.6665% Carried Working Interest through the first 3 wells under PELs 108, 109, & 112.

The JV partner of PEL 112 has secured a drilling slot with Hunt Drilling Company for the drilling of 2 wells this year. 

One of the best prospects C26, is approximately 4.25 times the size of the Worrior Oil Field that has oil revenue of approximately $37,750,000 per well per year pipeline runs. If just one of the Giant oil structures (C23) is filled with oil, the possible potential reserve estimates alone could exceed 25 million barrels of oil or approximately $1.25 Billion dollars using current crude oil market prices.

The closest oil structure of that size in the same basin is the Tirrawarra Oil Field.  Substantial volumes of oil and gas were discovered in the Permian sandstone reservoirs at Tirrawarra in 1970, which was at that time in a very remote location.

The Tirrawarra Oil Field has already produced approximately $US814,000,000 worth of oil, gas and associated hydrocarbons with estimated remaining reserves of 70,000,000 barrels of oil and 350 Billion cubic feet of gas.

The nearest oil field to ACOR's PEL 112 on the northeast is the Tantana Oil Field, which has averaged 937,500 bbls of oil per well or $68,000,000 per well at current oil prices and is located approx. 13 miles NE of ACOR's PEL 112. The Seismic line 84-XAB shows a possible look-alike structure on ACOR's PEL 112 similar to the Tanatana Oil Field. One of the two wells will target that look-a-like structure.

The current production on the adjoining area to the north of ACOR's PEL 112 is averaging a reported $33,000,000 a year. The current production on the adjoining area to the east of ACOR's PEL 112 is averaging a reported $75,000,000 a year.

Look below at the Giant Discoveries that adjoins PEL 112!!!

All the wells mentioned below adjoin ACOR's working interest PEL 112 to the north and to the east and have been recently drilled and completed as successful wells.

Silver Sands-1 well came in with an initial potential of 1062 BOPD

Christies-1 well came in with an initial potential of 500 BOPD

Christies-2 well came in with an initial potential of 1960 BOPD

Christies-3 well came in with an initial potential of 2400 BOPD

Christies-4 well came in with an initial potential of 653 BOPD

Christies-5 well came in with an initial potential of 403 BOPD

Sellicks-1 well came in with an initial potential of 1780 BOPD

Sellicks-2 well came in with an initial potential of 2700 BOPD

Sellicks-3 well came in with an initial potential of 1365 BOPD

Worrior-1 well came in with an initial potential of 2800 BOPD

Worrior-2 well came in with an initial potential of 2000 BOPD

Worrior-3 well came in with an initial potential of 276 BOPD

Worrior-4 well came in with an initial potential of 1660 BOPD

South Australia's Cooper/Eromanga Basin is exploding with new drilling activity, rewarding investors with some of the most profitable production in the area. ACOR's PEL 112 Is In The Middle Of It!

Now you can see why ACOR management is so excited about the wells about to be drilled on PEL 112. In our opinion, any one of the recent discoveries mentioned above could be a possible "Company-Maker" if discovered on PEL 112.

What are management team incentive programs you have in place for ACOR?

ACOR has the best performance incentive program in place for ACOR management. All public companies should have this same strategy. It is very simple and it works.

No ACOR officer or director is paid a cash salary.  All ACOR Officers or Directors own ACOR stock.  So if the ACOR stock does not perform, ACOR Officers or Directors do not make money.

What are some key financial indicators for your business?

We are subject to changes in the crude oil prices, but if you are basically a royalty company then you have no major working interest expenses.  If crude oil prices stay $US40.00 per barrel or better, ACOR will continue to see increased drilling on our ORRI’s. 

One JV partner drilled 77 wells in 2006 on ACOR’s ATP 299. The JV partner averaged a 75% drilling success completing 58 of the 77 wells. Now, the same JV partner is planning to drill 81 more wells in 2007 on ACOR’s ORRI.

What are some primary factors- economic, demographic, and political-that impact your company?

Again, with ACOR being mainly a royalty company, not many factors will affect ACOR except the price of crude.

Australia is one of the world's most stable democracies. Sovereign risk is extremely low, making it an attractive country for investors.

The Australian legal system is modeled on the internationally recognized English system. Australia's well-established and respected judiciary operates independently of government and has a long history of upholding the sanctity of contacts

Australia offers full legal protection to companies and individuals for intellectual property rights, whether through patents, registered design, copyright or otherwise.

Often referred to as the "Lucky Country", Australia has abundant natural resources. It is rich in minerals and hydrocarbons and has abundant land for development.

What is your valuation of ACOR’s stock?

The 52 week range of AUCAF stock has been .24 cents up to $1.87.  With 15,440,116 gross surface acres of overriding royalty interest and crude prices up, the drilling activity is constant on ACOR’s assets.  As discoveries are made, this should increase our revenue stream. Also, any significant oil discoveries on PEL 112 could possibly have an affect to the stock price.

What are some misperceptions help by ACOR investors?

A lot of pink sheets or bulletin board investors worry about how a company issues its stock by flooding the market with shares. ACOR only has approximately 13,000,000 shares outstanding and only 5,000,000 in the float.  This is very good.  ACOR is a tight company with no long-term debt.

What are ACOR’s competitive advantages in the market and as an investment?

ACOR management has over 100 years experience in the oil business.

ACOR management has a successful past management history having previous publicly-traded oil royalty companies all with Australian assets. All significantly increasing shareholder values from 10 times up to 180 times.

ACOR has no long-term debt and no officer or director is paid a cash salary.

ACOR has giant holdings and constant drilling activity on their assets:

What are some short and long term goals set for ACOR?

ACOR management would like to successfully establish long term oil production on PEL’s 112 & 108.

ACOR management would like to be able to qualify to be listed on the big board stock exchange, i.e. NYSE.

Join us, for what promises to be the most exciting year in our company's history!

Disclaimer:

This publication provides an overview of the Australian-Canadian Oil Royalties Ltd (ACOR) project portfolio. The information herein has been prepared from information believed to be accurate. ACOR makes no representations or warranties as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied on, as a promise or representation as to the future performance of the company or its projects. ACOR will be available to answer any questions and make available such other material as may be reasonably requested. While ACOR believes the material set forth herein to be accurate, prospective investors are advised to conduct an independent due diligence.

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.