CISCO, Texas--(BUSINESS WIRE)--Australian-Canadian Oil Royalties Ltd. (herein called ACOR) (OTCBB:AUCAF) is pleased to announce that the next offshore well to be drilled after Longtom-4 well is completed as a producer on ACOR’s ORRI called the Bazzard-1 Well, located in the Gippsland Basin on VIC/P53. The Bazzard-1 well will be drilled with the same drilling rig that is currently drilling the Longtom-4.
VIC/P53 consists of approximately 182,858 gross acres. VIC/P53 is also called the "Hole of the Doughnut" as it is surrounded by nine (9) giant producing oil & gas fields, leaving VIC/P53 in the middle. One of the nine (9) giant fields is called the Halibut Oil Field.
The Halibut Oil Field adjoins VIC-P53 to the east.
Esso Australia, a subsidiary of Exxon, operates the Halibut Oil Field located in the Bass Straits. The Halibut Oil Field was discovered in 1967 and has produced approximately 840,000,000 barrels of oil or approximately $105,000,000,000,000 (calculated by using current market prices of $125.00 per barrel) from 14 wells and is still producing.
One of the 1st original oil wells is the Halibut 15A well, which was drilled in 1967 and intersected an approximately 492 foot oil section.
The Halibut 15A well has produced approximately 84,000,000 barrels of oil or approximately $10,500,000,000.00 (calculated by using current crude oil prices of $125.00 per barrel) from one well!
The Halibut 15A well still has a projected production life of up to approximately the year 2077!
Last year, Esso Australia drilled three wells that offset the Halibut 15A well, the 1st well came in with an IP 3,800 BOPD, the 2nd well came in with an IP 12,500 BOPD & the 3rd well came in with an IP 9,000 BOPD. All three wells came in with 0% water cut.
These are incredible results in attempts to increase the life of a 41 year old oil field.
About VIC-P53 & the Bazzard-1 well
The JV partner of VIC-P53 will drill an exploration well called Bazzard-1, to test a four-way dip closure that the JV partner believes could hold approximately 30-50 million barrels of oil. The Bazzard-1 well will be drilled by the West Triton Rig.
The Bazzard 3D, recorded from early March 2005, has provided the newest dataset that the JV partner used to identify and rank prospects for drilling by 2008.
The 3D was aimed at providing finer delineation of a number of pre-existing leads, including Cod West, Updip Veilfin, Catfish, Bazzard, Spineback and Hake, with a secondary objective of identifying any additional Latrobe Group targets that may exist.
VIC/P53 is considered prospective for oil and gas at the top Latrobe and also at deeper intra Latrobe levels.
The location, adjacent to this infrastructure, and proximity to pipelines, processing facilities and major markets, offers potential advantage through infrastructure savings and gives encouragement to participation in VIC/P53. The hydrocarbons recorded at Veilfin-1 established the existence of a working petroleum system in the permit area.
ACOR owns 3/20ths of 1% ORRI under VIC/P53.
So what is 3/20ths of 1% ORRI possibly worth?
ACOR management has had several questions from AUCAF shareholders about some of our fractional ORRI interest in various blocks and what they could possibly be worth to the company.
3/20ths of 1% may not sound like a like a lot, but if you own a fractional ORRI in an area where giant oil & gas fields are being discovered and produced, that fractional ORRI could possibly generate sizeable revenue.
For example, if you owned a 3/20ths of 1% ORRI under the Halibut Oil Field* and when the Halibut Oil Field* produced approximately 840,000,000 barrels of oil and if the operator of the Halibut Oil Field* was able to sell the 840,000,000 barrels of oil produced for an average price of $125.00 per barrel, then your 3/20ths of 1% would have generated in revenue of approximately $157,500,000 before taxes.
(*Reminder: This was merely an example, ACOR does not own any ORRI’s under the Halibut Oil Field* and there are no guarantees of a similar performance).
Longtom-4 Well Update
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, was setting 10 ¾ inch casing after having had reached a depth of 8,500 feet.
Interpretation of intermediate wireline logging data has confirmed that the well has intersected a hydrocarbon bearing sand in the shallower section of the Longtom field. This sand zone will be production tested after drilling and completion of the horizontal section of the well.
After setting the 10 ¾ inch casing in the current hole section, the pilot hole will be drilled to intersect the deeper section of the Longtom field which is anticipated to contain the major portion of gas reserves in this part of the field. Drilling and logging of the pilot hole will be 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.
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.
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 and Offshore in the Carnarvon Basin in Western Australia.
ACOR is a publicly traded oil company trading on the NASDAQ OTC Bulletin Board Exchange under the trading symbol "AUCAF."
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.
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.