SOURCE: Allied Energy, Inc.

April 20, 2011 09:25 ET

Allied Energy, Inc. Announces 2010 Fiscal Year Results

BOWLING GREEN, KY--(Marketwire - Apr 20, 2011) - Allied Energy (PINKSHEETS: AGGI) today announced its 2010 fiscal year results. The Company's financial statements are available at www.alliedenergy.com and www.otcmarkets.com.

For the 12 months ended December 31, 2010, the Company reported total revenue of $27.5 million, which was a 135% increase compared to 2009. The 2010 revenue consisted of $26.4 million turnkey drilling and $1.1 million oil and gas production. For 2009, the Company had revenue consisting of $11.1 million turnkey drilling and $0.5 million oil and gas production.

Net earnings for the 12 months ended December 31, 2010 were $(0.3) million as compared with $0.3 million for the 12 months ended December 31, 2009.

The Company's total assets increased to $16.4 million in 2010 compared to $12.1 million in 2009, a 35% increase. In addition, net cash flows increased to $1.8 million in 2010 from $(0.7) million in 2009, a 351% increase.

The Company serves as the managing general partner for a number of oil and natural gas development programs. The Company's aggregate oil and natural gas exploration and development costs for its programs in 2010 increased to $18.9 million from $6.0 million in 2009, an increase of 217%. The increase is a direct result of the Company's continued commitment to its aggressive acquisition and investment programs including but not limited to increased participation in horizontal and other drilling programs, including those in Central-East Texas, well reworks and completions, water disposal systems, building of gas line infrastructure, and pipeline construction for its majority-owned subsidiary, Allied Gas Transmission.

In Grimes County, Texas, the Allied Howard #2H resumed production on March 12, 2011 and since that date has averaged approximately 6 million cubic feet of gas per day along with associated condensate. The Allied Howard #1H continues to produce at a rate of approximately 2.5 million cubic feet of gas per day equivalent and has produced nearly $1 million in gross revenue (in today's prices) since it was turned into production the latter part of 2010. Although no assurances can be made, the Company estimates that combined production from both wells of methane gas, natural gas liquids and condensate should potentially stabilize in the estimated range of approximately 170 - 200 million cubic feet of gas per month equivalent, at least for the short-term. To the extent that production does occur at this level, this equates to a projected $600,000 of future gross production revenue each month for the Company, (assuming a net price of $.30 per MCF for gas). However, both of these wells are anticipated to be subject over time to production declines of an as-yet undetermined magnitude.

The Company is scheduled, in the second quarter, to move a rig on location in order to begin drilling the Allied Howard #3H well location. The Company also has plans to drill two more horizontal locations in Grimes County this summer and fall.

In Leon County, Texas, Schlumberger recently completed the fracking of Allied's first horizontal oil well, the Allied Wallrath #1H. Initial results have the well flowing at approximately 100 barrels of oil per day (BOPD) without manipulation or stimulation.

"We are extremely pleased with the results we have seen thus far for our horizontal programs in Grimes County, Texas and the overall execution of our business model for 2010," said Scott Harris, Allied's Chief Executive Officer and President. "In 2011, we anticipate oil and gas production revenues to be a much higher percentage of the Company's overall revenues," added Harris. The Company also generates additional revenues from lease operating activities including saltwater disposal and gas transmission in Grimes County, Texas.

At December 31, 2010 in Oklahoma, the Company, either directly or through its program interests, owned interests in 70 producing wells and/or wells awaiting hook-up, four wells in various stages of testing or completion, two wells in process of being drilled, and 20 additional wells scheduled to commence in 2011. The majority of these wells in Oklahoma produce from either the Mississippi Limestone, Burgess Sandstone and/or various coal seam formations.

No assurances can be made as to the Company's future success and/or ability to sponsor development programs or other oil and natural gas projects. Nor can assurances be made as it relates to present or future production rates or estimated reserves for any given project. Tremendous risks and uncertainty are associated with oil and gas drilling, completion, development and production operations. It is impossible to accurately estimate future rates and/or declines in production operations for oil, condensate and natural gas.

About Allied Energy:

Allied Energy, 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. These activities include the sale of program interests and of drilling and operating services. The Company relies upon its operating companies and other subsidiaries, strategic industry partners, petroleum geologists, engineers, subcontractors and support personnel whose combined industry experience is essential to the success of each project. Allied Energy's strategic focus is the development of oil and natural gas production and reserves. The Company firmly believes its oil and natural gas exploration and development strategy will provide substantial growth to the Company for years to come. For more information: www.alliedenergy.com

Allied Energy has achieved the "Best of Bowling Green" award for the category of crude oil and natural gas production for the last three years and was recently awarded the Bowing Green "Outstanding Business of the Year" community impact award for 2010.

Forward-Looking and Continuing Statements:

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, price of oil and natural gas, state of the economy, industry regulation, reliance upon expert recommendations and opinions, 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 including but not limited to the strength of the overall economy; and (iv) other risk factors inherent to the oil and gas industry.

Contact Information