Allied Energy Provides a Production Operations Update for Grimes County, Texas
January 19 2011 - 10:10AM
Marketwired
(PINKSHEETS: AGGI) Allied Energy provided the following report for
its Allied Howard #1H & #2H horizontal Georgetown Buda wells in
Grimes County, Texas.
The Allied Howard #2H was recently turned into production at an
initial rate approximating ~ 4 million cubic feet of gas per day
(including natural gas liquids) and associated condensate, and the
Allied Howard #1H continues to produce in the range of 1.8 - 2
million cubic feet of gas per day (including natural liquids) along
with associated condensate. Although no assurance can be made and
risks do exist, the Company anticipates that combined production
from both wells of methane gas, natural gas liquids and condensate
should potentially stabilize in the range of ~170 million cubic
feet of gas per month equivalent, at least for the short-term.
Although production may increase or decline for the short-term,
production rates typically experience an annual decline over the
productive life of the well(s).
It generally takes 4-6 months to better manage downtime and
lease operating expenses (LOE) for horizontal wells of this size
and depth. Typically, LOEs decline as a percentage of gross revenue
for a significant portion of the life of the well. The Company is
projecting LOEs equal to 10% of gross revenues for the long-term
although they may be higher for the short-term. These LOEs include
but are not limited to water disposal/hauling, electricity,
pumping/administration, gas transmission, severance taxes,
compression and general maintenance.
The Company has selected its third horizontal Georgetown Buda
location, the Allied Howard #3H, as a direct offset to the Apache
Wells E #1H location and is currently making preparations to drill
in the near future. The Apache Wells E #1H well, to date, has been
what appears to be the best producer in this area, as per reported
by the Texas Railroad Commission and DrillingInfo.com. It is
anticipated that the Company will have an approximate 13% of
working interest and a 9.75% net revenue interest in this well. The
actual amounts are yet to be determined based on a number of
currently unknown factors.
"We are very pleased with the early production volumes in Grimes
County and plan to continue to utilize many of the latest
technological advancements in horizontal drilling in Grimes County
and other areas of Central-East Texas," said Steve Stengell,
Allied's President and CEO.
No assurances can 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. Oil and
natural gas volumes are often reported in an equivalent amount of
one or another petroleum product as determined by prices and
volumes of the petroleum produced. Production volumes herein were
reported from the wellhead via electric flow meters.
About Allied Energy
Allied Energy, Inc. (PINKSHEETS: AGGI) is an independent oil and
natural gas operator and developer primarily engaged in the
exploration, development, and production of oil and natural gas in
the continental United States. The Company relies upon its
confidential industry partners, well operators, geologists,
petroleum engineers, and other operational personnel whose combined
industry experience is essential to each project. Allied Energy's
strategic focus is the development of oil and natural gas
reserves.
Allied Energy has achieved the "Best of Bowling Green" award for
the category of crude oil and natural gas production for the last
two years and was recently chosen by an independent selection
committee as the recipient for the Bowling Green "Outstanding
Business of the Year" community impact award for 2010.
Allied Operating Texas, LLC, a wholly-owned subsidiary, operates
and develops certain of Allied Energy's vertical and horizontal
drilling programs. Allied Gas Transmission, Inc., a majority-owned
subsidiary of Allied Energy, was formed to construct, operate and
own gathering systems and/or pipelines to connect production
controlled by Allied Energy to larger pipelines.
For more information: www.alliedenergy.com
CAUTIONARY STATEMENTS
Certain statements in this release that are not historical facts
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Those 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,
risks of blow-outs and other potential damaging occurrences
inherent to the oil and gas industry, and uncertainties and other
factors that may cause the actual results, 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.
For these and other reasons, 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 following: (i) the Company's ability to
obtain sufficient capital or a strategic business arrangement,
including the sponsoring of general or limited partnerships, to
fund its expansion plans; (ii) the Company's ability to acquire
interests in commercially attractive properties to develop and/or
operate; (iii) the Company's ability to build the management and
human resources and infrastructure necessary to support the growth
of its business; (iv) competitive factors and developments beyond
the Company's control, including but not limited to the strength of
the overall economy; and (v) other risk factors inherent to the oil
and gas industry.
Contact: Company Contact: Heather Age Allied Energy, Inc. 2800
Griffin Dr. Bowling Green, KY 42101 Phone: 866-256-5836 Fax:
800-251-9322 Website: http://www.alliedenergy.com Email:
info@alliedenergy.com
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