SOURCE: Allied Energy Group, Inc.

January 30, 2007 16:00 ET

Allied Energy Group, Inc. Provides Details to Production Operations and Future Objectives for Oklahoma

BOWLING GREEN, KY -- (MARKET WIRE) -- January 30, 2007 -- Allied Energy Group, Inc. (PINKSHEETS: AGGI) provided the following update regarding its CBM coalbed methane projects in Oklahoma:

Allied Energy Group, Inc., and its strategic industry partners, currently have a reported 15 wells in production, 2 wells going into production, 11 wells in completion or to be re-completed, and a projected 7-10 more wells tentatively scheduled to be drilled by early 2007 in Rogers County with plans to drill and develop an additional 20-25 coalbed methane wells in this same area beginning in 2007. The Company has varying degrees of ownership in each property.

The 15 wells currently in production were originally acquired through a joint venture agreement with Mammoth Energy Group, Inc. and are located on the McGuire, Parker, Magill, Atwood, Wagoner, and Carter leaseholds in Rogers County, Oklahoma. KMV Consulting, Inc. currently serves as the Company's well operator for each well under development in this area. These 15 wells have reported gross monthly production of 13,367, 11,307, and 9,736 MCF (thousand cubic feet) of gas for September, October, and November 2006, which equates to average gross production rates approaching 400,000 cubic feet of gas per day (400 MCFD).

However, during these months, the operator had many of the wells off-line as improvements to the field were being made. These improvements included repairing equipment, modifying gas lines, adding compressors, and improving the general efficiency of this production. Most of this work is now completed, which resulted in bringing the field operations up to industry standards.

"We were pleased to see that these improvements have already impacted our operations when production was not affected by the recent inclement weather," said Steve Stengell, Allied's Sr. Vice President Operations. "Before this, the snow, ice and rain would have inevitably brought several wells off-line. Therefore, now with more days in production and more efficient operations we continue to see production climbing back to the levels we anticipated. When we add this last compressor, we expect production should level out at around 550,000 cubic feet of gas per day (550 MCFD) for these original 15 wells," added Stengell.

There are two additional wells that were recently completed and are being brought on-line on the Stanford leasehold (Township 24N, Range 15E, Section 23 and 24) in Rogers County. Many of the acquired wells (14 of the 15 producing wells) were re-completed in existing oil wells. They also were typically produced from just one coal seam. These two new wells were drilled and have virgin pressures as well as multiple coals seams from which to produce. This should translate into higher production rates on these wells and future wells that are drilled. Once these two additional wells are placed into production, the Company is confident that it can achieve gross production rates exceeding 650 MCFD for these 17 wells.

"We are really excited to see how much higher the production rates are for the remaining wells to be drilled when we stimulate and commingle production from multiple coal seam formations," added Stengell. "This type of improved well profile provides projected per well production rates much higher than what we have experienced thus far."

The Company has also successfully drilled and is now in completion of 4 "multiple-coal seam" wells located on its Schmidt leasehold (Township 24N, Range 15E, Section 31) also in Rogers County. The Company's short-term goal is to achieve gross production in the range of 300-600 MCFD from the following 6 wells currently in completion:


Based on this area's production history and our results to date, the Company's medium-range objective is to achieve gross well production of at the very minimum 1,700,000 cubic feet of natural gas per day from 38 wells as early as summer 2007, which at average market prices in the area approximates gross figures of $9,350 per day before line charges, royalties, taxes and operating expenses. No assurances can be given that such production will be achieved or revenues realized. The Company has varying degrees of ownership in each of these properties.

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, conservative estimates of 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 $49,500 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. The Company has varying degrees of ownership in each gas property.

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 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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