SOURCE: Allied Energy, Inc.

December 15, 2008 13:59 ET

Allied Energy Provides a Field Operations Update for Its Southern Fields in Rogers County, Oklahoma

BOWLING GREEN, KY--(Marketwire - December 15, 2008) - Allied Energy, Inc. (PINKSHEETS: AGGI) provided the following report regarding its drilling, completion and production operations in Rogers County, Oklahoma for the following programs.

12-Well Program (USCBM)

The Begley #12-3, Begley #12-4 and Noble Brewer #12-1 are currently in production and we are scheduled to treat the Noble Brewer #12-2 in the Rowe Coal seam. The Begley #12-5, #12-6, #12-7 and #12-8 were put into production last week and are returning fluid in preparation for oil production to begin. The Begley #12-3 and Begley #12-4 have a combined initial reported production rate of 20 barrels of crude and an estimated 20,000 cubic feet of gas per day (in excess of 100,000 +/- cubic feet of gas per day per well at today's prices). The Begley #12-3 and #12-4 returned fluid for about a week before oil production began. There can be no assurance made as it relates to future production rates. The Begley #12-9, #12-10, #12-11 and #12-12 were each drilled to total depth and encountered hydrocarbons in the Mississippi formation and are now awaiting completion.

Cherokee 25 (CHK25)

The J. Begley #1 (Burgess), M. Begley #3 and C. Begley #4 are currently in production. The M. Begley #2 needs to be re-logged and evaluated before completion is attempted in the Burgess. We have performed a significant amount of work towards the reworking of existing oil and gas producers on the lease and have also been adding additional wells to our re-completion inventory. The two existing Begley oil wells have been reworked and added to production and together appear to be contributing some pretty decent oil production (estimated 5-6 BO per day initially). The Begley #7 & 8 have recently been acidized and added to production as well. The ultimate goal over the net 6-9 months is to establish production for four (4) newly drilled wells, maximize production from the existing producers on the lease (8-10 wells) and add 8-12 additional re-completed wells to the production stream. Although no assurance can be made, the Company believes that the program should be at full production capacity in the next 9 months providing years of income.

Hickory Hollow / Caney River (8-well program)

The Smith Peter Hickory #1 has produced nearly 2,000 barrels of crude from the Mississippi Lime and continues to produce at an estimated rate of 5-6 BO per day. Allied Energy plans to convert the Dana #5 and add the recently drilled replacement well (Smith Peter #2b) to the program's future income stream. The Dana #1-4 wells (4 of the 5 existing producers) are already completed for production and are currently awaiting a water disposal system in order to begin producing at full capacity. We have successfully connected the Dana #1 to our gas line which will deliver the gas across the Caney River and approximately 2.5 miles to our Cherokee Tap and Meter (i.e. gas market). However, a water disposal system is our top priority in order to maximize production for the Dana #1 and the other program wells. In summary, there will be 4 newly drilled producers (Smith Peter #1, #2, #2b, #3) and the Dana #1, #2, #3 and #4 contributing gas for the program. Due to continuous delays resulting from record rains last year, access to gas line right-of-ways and ongoing negotiations with several landowners in the area, the project has been delayed and is now anticipated to reach full production capacity from all 8 wells in the next 3-6 months. Right now, we are focused on installing phase 3 electric to power all of the lift systems and other equipment on the lease so that we begin moving fluid from each well in order to allow the gas to sell into the line.

South Rogers Six (SR6: 6-well program)

The Minor #1 & #2, Phil Minor #1, Lindsey #1, Shockemoehl #1, and Shockemoehl #2 wells have successfully been drilled to total depth and are now in the completion phase. The Shockemoehl #1 will be cleaned out with the drilling rig before completion can begin. The R. Minor #1 has been completed for production and demonstrates significant gas potential from the Burgess Sandstone at 750 +/- feet. The Lindsey #1 also demonstrates decent gas potential from the Burgess Sand. The Lindsey #1 has been perforated, treated and completed for production. We have treated the Phil Minor #1 and are in the final completion mode for each of these wells. Allied Operating, LLC has finalized the right-of-ways for the 3 +/- miles of gas line to be trenched and laid connecting the SR6 lease to the Hickory Hollow gas tie-in. Allied Operating, LLC is currently working with a local contractor to trench and lay the line in the next several weeks. Due to the fact that these locations are located in a remote area, we expect these wells to reach full production capacity in the next 6-9 months.

Hickory 4 (H4: 4-well program)

The Floyd Patrick #1 and #2 wells and are now in production and recently sold a tank of oil. The J. Begley #2H has had production casing set and now awaiting perforation and treatment. The Noble Brewer #1H was placed on pump and has been returning treatment/formation water with an oil cut. We anticipate that the well will bring on oil production only once we re-perforate the lower lobe of the Miss Lime. The Noble Brewer #1H is also awaiting connection to the gas line. Due to the remote location of these wells and other delays resulting from record rains earlier this year and ongoing negotiations with landowners, we expect to reach full production capacity in the next 6-9 months.

Morgan County Off-set Development

The first four locations (MC1 - MC4) in Rogers County have successfully been drilled encountering hydrocarbons in the Mississippi Lime formation. We are scheduled to begin completion operations first of the new year.

Pawnee Rogers County Development

We are tentatively scheduled to begin drilling all six wells in Rogers County at the first of the new year.

Ultimately, the Company expects to establish production from more than 50 wells with an estimated aggregate daily gas production rate of 1 - 2 million cubic feet of gas and 75 - 200 barrels of crude oil per day from its two southern fields. This projection includes all wells drilled, reworked and/or completed for production this year and next. Although the Company is very confident in the development of its properties, no assurances can be made as it relates to the future production rates of oil and/or natural gas. There are tremendous risks associated with the drilling, completion and production operations for oil and natural gas projects.

"Despite the fact that we have had endured continued delays in specific areas of Rogers County, we continue to make significant progress for all of our projects in this area," said Steve Stengell, Allied's President. "Allied Operating, LLC, a wholly owned subsidiary of Allied Energy, Inc., is the primary entity responsible for this progress and continues to finalize completion and make gas line connections for each well on the Hickory 4, Hickory Hollow, SR6 and Cherokee programs in this area," added Mr. Stengell.

The remote well locations of the SR6, Hickory Hollow and Hickory 4 programs have made building infrastructure in the immediate area of these projects challenging and has provided quite learning curve for Company. However, Allied is confident that it will have each of the programs producing at full capacity in a reasonable period of time.

The Company has rescheduled all drilling operations to begin in January so that the Company can refocus its attention toward the more challenging areas including the Hickory Hollow, SR6, Hickory 4 and Cherokee leases.

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. The company relies upon its industry partners, well operators, third party geologists, industry consultants, petroleum engineers, and financial analysts whose combined industry experience is essential to the success of each project. Understanding the inherent risks of oil and gas development, Allied Energy'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 and net revenue 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 such as the reliance upon the recommendations of industry experts.

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