Commercially Produce The Longtom Gas Field on ACOR's ORRI - 1st Gas Sales
Projected at Approximately 11,000 Barrels of Oil Per Day Equivalent by 2008
CISCO, Texas--(BUSINESS WIRE)--May 09, 2007
Australian-Canadian Oil Royalties Ltd. (herein called ACOR)
(OTCBB:AUCAF) is pleased to announce that the operator has declared
the commerciality of the Longtom offshore gas project in Bass Strait
on ACOR's ORRI. This is based on contracted reserves of approximately
318 BCF of gas and 4 million barrels of condensate.
The cost to develop the Longtom Gas Field is estimated at
approximately $AU 180,000,000. The operator of VIC/P54 has also
executed a revised gas sales agreement with Santos Limited and is in
the final stages of agreeing its project financing facilities.
Other key project attributes to note include:
-- The first gas from the Longtom project is forecast for the
third quarter of 2008.
-- Major works including pipeline installation and the drilling of
an additional well are scheduled for the first half of 2008 in order
to meet the first gas production target.
-- The operator is currently converting letters of intent for all
major project equipment items and services to final contracts.
-- The Longtom field development plan is being finalized with a
production license submission to the designated authority to be
submitted in May. All necessary Government project approvals are
expected to be secured by the middle of 2007.
-- Gas from the Longtom field on ACOR's ORRI will be produced via
sub-sea wells linked by a new 12" pipeline to the Santos owned and
operated Patricia/Baleen gas facility.
Gas Sales and Processing Agreements
Contracts to process and purchase up to 318 BCF of gas and
associated liquids from the Longtom field have been revised to
accommodate the financing arrangements with the operator's future
financiers. All key commercial terms for the revised gas sales
agreement remain unchanged from the agreement signed with Santos in
Under the agreement the operator will deliver raw gas from the
Longtom field to the Santos owned and operated Patricia/Baleen gas
processing plant near Orbost. Santos will process and purchase the
processed gas and associated liquids. Santos has agreed to process up
to 409 BCF of raw gas from Longtom and purchase the first 318 BCF of
the sales gas at defined prices. The agreements are subject to
regulatory approvals relating to the project.
Santos also has an option to acquire up to 35% interest in the
About the Longtom Gas Field
The original Longtom-1 discovery well intersected a 1312 foot gas
column in the Emperor formation. This was confirmed by the Longtom-2
appraisal well drilled by Apache Energy Limited ("Apache") and the
operator in late 2004, which intersected a gas column in excess of
1312 feet long in five separate reservoir zones.
A gas sales agreement for Longtom gas was signed with Santos in
December 2005. Santos has agreed to process up to 409 BCF of raw gas
from the Longtom field through its existing onshore Patricia/Baleen
facility near Orbost in north eastern Victoria. Santos has agreed to
purchase the first 318 BCF of the sales quality gas production at
The Longtom-3 well drilled in September 2006 by the operator on a
sole risk basis, confirming the commercial potential of the Longtom
field when a sustained flow rate of over 75,000,000 cubic feet of gas
per day was achieved during the second production test over the
field's lower reservoir sections. These lower reservoir sections
contain over 80% of the hydrocarbon volumes in the Longtom field. A
test of the upper reservoir sand which did not flow in the Longtom-2
well also confirmed the capacity of this sand to flow.
A second objective in the VIC/P54 permit is the Longtom Upper
prospect, a lead which represents a possible extension to the Longtom
field containing up to 250 BCF of additional gas which will be tested
by a future exploration well.
ACOR owns a 1/20th of 1% ORRI under VIC/P54
Note: Barrels of oil equivalent ("BOE") as stated above is based
on the energy equivalent of oil to gas.
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.
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.
Australian-Canadian Oil Royalties Ltd.
Investor Relations, 254-442-2638
Press spacebar to pause and continue. Press esc to stop.