Allied Energy Group, Inc. (PINKSHEETS: AGGI) provided the following report regarding the current and future development of its coalbed methane projects in Oklahoma and other oil and gas developments positioned in strategic areas of operations throughout the domestic U.S.:
Rogers County, Oklahoma
Allied Energy Group, Inc., partnering with Mammoth Energy Group, currently has a reported 15 wells in production, 8 wells in completion, and 5-7 more wells tentatively scheduled to be drilled this year or early 2007 in Rogers County with plans to potentially drill and develop an additional 20-25 coalbed methane wells in this same area beginning in 2007. Ultimately, the Company has secured up to 33% working interest ownership in more than 20 of these wells. The Company and its investor partners have varying degrees of working interest ownership in each well and/or project.
Based on this area's production history and our results to date, the Company expects to achieve gross well production of 1,400,000 cubic feet of natural gas per day from 28 wells in the very near future, which at current market prices approximates gross figures of $10,000 per day before line charges, royalties, taxes and operating expenses. No assurances can be given that such production will be achieved or revenues realized.
For the long term, the Company and its industry partners have secured approximately 4,000+/- acres currently under lease or to be leased in this area and has future plans to participate in the drilling of as many as 150-200 coalbed methane wells in this part of Oklahoma. Based on production in this area, gross production from 200 wells would be projected at 9,000,000 cubic feet of natural gas per day, which at current market prices approximates gross figures of $60,000 per day before line charges, royalties, taxes and operating expenses. Once again, although the company remains confident as to its future operations, no assurances can be given that such production will be achieved or revenues realized.
Knox and Laurel Counties, Kentucky
The Don Sullivan #8, Clarence Bright #2, and Dale Greer #1 were successfully drilled and encountered gas in the Big Lime and/or Waverly formations. The Company owns 16.67% working interest in each of these three wells.
The Don Sullivan #8 was placed into natural gas production (i.e. prior to a stimulation treatment) and initially produced at a rate of 40,000 cubic feet of natural gas per day. The Don Sullivan #8 is currently awaiting a stimulation treatment and producing a reported 20,000 cubic feet of natural gas per day. The Clarence Bright #2 and Dale Greer #1 are both awaiting stimulation treatment, final completion, and should be in production in the next several weeks.
Schleicher County, Texas
The Company is currently evaluating results from various treatments performed to restore production operations for the Pring-Allied #1 and initiate production for the Pring-Allied #2 located on its El Dorado Leasehold. The Company and its investor partners have a working interest ownership exceeding 65% in each of these wells. The Pring-Allied #1 has previously reported daily production rates as high as 60 barrels of oil per day and the Pring-Allied #2 has a reported 30 feet of potentially productive oil pay-zone. There are risks associated with these procedures and no assurances can be given that such production will be restored and/or achieved.
The Company is currently building location and preparing to begin drilling operations for the 2nd well on its Wright-Griffin leasehold to test the Strawn Limestone formation at approximately 6,000+/- feet in vertical depth. This drill-site is a direct off-set to the Tucker Milligan Estate #1 (drilled in 1965) that initially open-flow tested at 6.2 million cubic feet of gas per day but was restricted to cumulative production of 118 million cubic feet of gas due to the fact that there was no appropriate gas market or infrastructure in 1965. Today, the gas market and line infrastructure are in place providing an excellent opportunity for exploration and development.
Illinois Basin and Eastern Kentucky
The Company is finalizing plans to potentially explore and aggressively develop several strategic gas plays in the Illinois Basin and Eastern Kentucky.
A myriad of independent oil and gas companies have been and continue to be successful in developing a number of natural gas developments in these areas.
"Understanding the inherent risks associated with our industry, Allied is extremely confident that its diversified exploration program, primarily focusing in areas of the most conservative nature as a strategy to build production and reserve values, is key to the Company's future success," said Steve Stengell, Allied's Sr. Vice President of Operations.
About Allied Energy Group
Allied Energy Group, Inc. (PINKSHEETS: AGGI) is an independent energy development firm primarily engaged in the exploration, development, and production of oil and natural gas in the continental United States. The company relies upon its industry partners, well operators, geologists, petroleum engineers, seismic specialists, and financial analysts whose combined industry experience is essential to the success of each project. Allied Energy Group's strategic focus is the development of oil and natural gas reserves. As the fuel of choice to meet the growing demand for a clean-burning domestically produced fuel, the company firmly believes its natural gas exploration strategy should provide substantial growth to the company for the years to come.
For more information: www.alliedenergy.com
Certain statements in this release and the attached corporate profile that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "anticipate," "believe," "expect," "future," "may," "will," "would," "should," "plan," "projected," "intend," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. The Company may have varying degrees of working interest ownership in each well and/or prospect. Thus, gross revenue projections may not be equal to what is distributed net to the Company. The Company's future operating results are dependent upon many factors, including but not limited to the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; and (iv) other risk factors.