29-07-02 Australian-Canadian Oil Royalties is pleased to announce a new gas producing area has been discovered and is being drilled at this time on the South-East and West side of the Mammoth Cave National Park in Kentucky. ACOR, Ely Sakhai and RETCO have drilled fourteen wells to date following a major fracture trend along the south and west of the park and have ten more locations identified and being prepared for drilling.

Australian-Canadian Oil Royalties (ACOR) acquired a 12 1/2 % working interest from Resource & Energy Technologies (RETCO) in an area of mutual interest in the Park City and Rhoda Quads in Kentucky. Their President, Ely Sakhai, also purchased a 12 1/2 % working interest. The AMI covers several thousand acres and lease acquisition is being aggressively pursued at this time.
The Parsley #6 blew out while drilling but was contained in a few hours. ACOR and Sakhai have engaged an engineering company to run a 3-day potential test on this well. The rig was moved four miles to the NNW along the fault line to the #1 Tarter location. The #1 Tarter encountered 31 feet of oil and gas saturated limestone and production casing has been set. The rig then moved two miles NNW along the same fault up to the Jackie McCombs #3 location, or six miles up the fault from the Parsley #6. Gas was encountered at 1,020 feet.

The company received the following report from Robert Thorpe by fax on July 24, 2002 from the field to wit: "After five attempts to get the Jackie McCombs #3 under control we were successful this morning. "At 1:40 a.m. the well was brought under control using a mixture of Calcium chloride, brine and gel-nam-4. Boots and Coots of Houston and C.G. Collins Engineering Group formulated the kill method.”
"The cascade effect had taken place and the final goal was to get the well under control and plugged if possible without any injuries to the crew and on site personnel. Due to the professional manner of the drilling crew, Mr Logsdon and Blue Ridge Well Service Company we were able to not only control the well but save it for production.”

"All of the drilling string was recovered using a remove and kill process which took several hours. Slaven Well Service was on location with an airboat mounted on a trailer with the air stream pointed at the rig to keep the escaping gas from the rig and crew during the operation. This has never been done before and Mr Rick Bender, Director of the Mines and Minerals Department for the State of Kentucky, who was on location, and Mr Jerry Gray, the District Engineering Manager of the Oil and Gas Division for the Kentucky Mines Department, intend to recommend this to all companies in the oil and gas industry at their annual meeting in Washington, DC.”
"Comments by Mr Bender and Mr Gray were to the effect, quote, that in their professional careers with the State of Kentucky they had never witnessed a well with similar high pressures or volume of flow as the Jackie McCombs #3. Three Kentucky State Fire Marshals were also present including a HASMAT engineer and their analysis of the gas has concluded, the gas was of high quality methane with no H2S and no nitrogen content."

AUCAF holds interest in 7,565,674 net working interest acres, 10,812,400 overriding royalty acres and has 5,451,500 total common shares outstanding of which 1,150,000 shares in the public float.