SOURCE: Allied Energy Group Inc.

October 09, 2006 16:30 ET

Allied Energy Group, Inc. Announces Its Exploration and Development Strategy for the Illinois Basin

BOWLING GREEN, KY -- (MARKET WIRE) -- October 9, 2006 -- Allied Energy Group, Inc. (PINKSHEETS: AGGI) announced that with Cole Halliburton on board as President, effective August 1, 2006, the Company is now finalizing plans to participate in a series of gas plays strategically located in the Illinois Basin and Eastern Kentucky. Management is focused on a project wherein Allied would participate in the drilling of a series of shallow natural gas wells in an area where a well typically produces anywhere from 100,000 to 250,000 cubic feet of gas per day (100 to 250 MCFD).

"Given the positive outlook for the natural gas industry and production histories for the Illinois Basin and Eastern Kentucky, the Company has engaged itself in intense negotiations regarding the aggressive development of these areas in the future," explained Steve Stengell, Sr. Vice President Operations for the Allied Energy Group.

The Illinois Basin and parts of Eastern Kentucky were originally explored for oil with some fields being prolific, producing 2 to 3 million barrels of oil. While natural gas was discovered during much of this original exploration, the infrastructure was not in place to make the discoveries commercially viable, especially with natural gas prices under $1 per MCF. With natural gas prices much higher, a number of companies have re-entered the area and built the infrastructure to bring natural gas discovered in the area to market.

"Today, and over the years, a myriad of public and private oil and natural gas companies have been quite successful in and around this area, including NGAS Resources, Inc. and the Chesapeake Energy Corporation. We cannot be certain but we are extremely optimistic that we will have similar success," added Mr. Stengell.

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 employs 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. 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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