SOURCE: Allied Energy Group, Inc.

May 21, 2007 09:30 ET

Allied Energy Group, Inc. Acquires Additional Interests in 27 Wells and 2,870 Acres in Oklahoma

BOWLING GREEN, KY -- (MARKET WIRE) -- May 21, 2007 -- Allied Energy Group, Inc. (PINKSHEETS: AGGI) announced today that it has signed an agreement to acquire interests in 27 wells on over 2,870 acres in Rogers County, Oklahoma. Allied acquired the interests from its operator of these wells, KMV Consulting, Inc., paying for the acquisition with a combination of cash, debt and stock.

As part of the original partnership agreement, Allied had purchased a 16.5% interest in these wells and their respective leaseholds from KMV at the end of 2006. From October 2006 through April 2007, Allied and KMV drilled 13 new wells together and experienced better than a 92% completion rate.

As a result of this success, Allied decided to acquire 68.50% of the working interest in 1,095 acres where there are 14 producing wells, 3 wells awaiting reworking services and about 8 offset drilling locations. On these leaseholds, Allied now has an 85% working interest, which corresponds to a 63.75% net revenue interest. Of these 17 wells, almost all of them were existing oil wells that have now been re-completed in the coal seams to produce natural gas. Over the last 12 months, production on these producing wells has averaged about 45,000 cubic feet of gas per day (45 MCFD) per well while producing at full capacity.

Allied also acquired the remaining 83.50% interest in over 1,780 acres in this same field where there are 10 wells being put into production. Allied's 100% working interest in these leaseholds corresponds to a 78% net revenue interest. All 10 of these wells were newly drilled wells and initial results indicate that newly drilled wells will have higher average production rates.

"Once all 27 wells are in production, we expect the average production to be about 40 million cubic feet of gas per month," said Steve Stengell, Allied's Vice President of Operations. "Furthermore, we are excited that this acquisition will give us even more control over our operations and infrastructure at the field level," he added. There can be no assurances that such production levels will be achieved.

This acquisition is in the middle of an area where the Company is executing a strategy of developing low risk fields with very consistent returns. Allied is focused on securing a total of about 7,500 acres in this area where the company is planning to drill about 50 wells over the next year.

"We have some exciting plans for developing this area and believe we will continue to have similar or even better success than what we have enjoyed to date," said Cole Halliburton, Allied's President. "These wells are very cost effective to drill and result in a producing well nearly every time we drill. Ultimately, we intend to drill a couple hundred wells in this area, which should lead to some significant production. Therefore, we are now focused on aggressively expanding our acreage position in Oklahoma so that we can continue our current pace of steady growth," he added.

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 including but not limited to geological and geophysical 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. 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 inherent to the oil and gas industry.

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