SOURCE: Allied Energy Group, Inc.

December 06, 2006 09:00 ET

Allied Energy Group, Inc. Announces Plans for an Additional 8 Coalbed Methane Wells in Oklahoma

BOWLING GREEN, KY -- (MARKET WIRE) -- December 6, 2006 --Allied Energy Group, Inc. (PINKSHEETS: AGGI) provided the following report regarding its plans to participate in an additional 8 coalbed methane wells located in Rogers County, Oklahoma.

The Company is currently finalizing plans with Insight Energy Corporation to acquire an additional 220 +/- acre lease to rework and re-complete 5 existing wells and drill 3 new locations near the Caney River in Rogers County, Oklahoma. Each existing well and new drill location has the potential to commingle production from multiple coal seam formations.

"Based on the current wellhead pressure readings for each proposed re-completion, production histories for this immediate area, and the analyses of regional experts, the Company anticipates initial daily gross production rates of 400,000 - 750,000 cubic feet of gas per day from 8 producing wells," said Steve Stengell, Allied's Sr. Vice President of Operations. "Although we cannot be certain that we will achieve these production levels, we are extremely confident in the production potential for this lease," explained Stengell.

"This is a prime example of how in the past (prior to the oil and gas industry having a concise understanding of coalbed methane production) oil producers overlooked true production potential of natural gas from multiple coal seam formations," added Stengell.

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.

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 have 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 lease 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.

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.

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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, 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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