SOURCE: Allied Energy Group, Inc.

December 08, 2006 09:00 ET

Allied Energy Group, Inc. Announces Improved Efficiencies in Production for Its Coalbed Methane Developments in Oklahoma

BOWLING GREEN, KY -- (MARKET WIRE) -- December 8, 2006 -- Allied Energy Group, Inc. (PINKSHEETS: AGGI) provided the following report regarding improvements made to its production operations located in Rogers County, Oklahoma.

"These improvements include repairing equipment, modifying gas lines, and adding compressors to improve the general efficiency of the production operations," said Steve Stengell, Allied's Sr. Vice President of Operations. Immediate production from only 17 of the Company's wells is projected to reach 850,000 cubic feet of natural gas per day. There can be no assurance that this production will be realized.

Allied Energy Group, Inc., and its strategic industry partners, currently have a reported 15 wells in production, 2 wells being placed into production, 11 wells in completion and/or planned to be re-completed, and a projected 8-10 more wells tentatively scheduled to be drilled by 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. The Company and its investor partners have varying degrees of working interest ownership in each well to be developed.

"The synergies created by participating with our strategic industry partners should result in improved efficiencies of production for the future (maximizing rates of production and minimizing lease operating expenses) and an increase in 'economies of scale' as it pertains to drilling and producing wells for the long term," explained Stengell. "Ultimately, we are confident that as we drill and produce more wells our per-well average production rate should increase while our per-well development costs decrease accordingly, improving our bottom line," added Stengell.

For the long term, the Company and its strategic 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.

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 strategic 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.

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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 inherent to the oil and gas industry, 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. Production rates and lease operating expenses are impossible to accurately forecast. 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.

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