Allied Energy, Inc. Announces Operations
Updates
BOWLING GREEN,
KY--(Marketwire – January 28, 2013) - Allied Energy, Inc.
(“Company”)(OTCMarkets:
AGGI) today announced updates relating to its
operations.
Drilling Update:
Yakesh 2-H Prospect: During
December 2012, Allied Operating Texas, LLC, (“AOT”) a wholly-owned
subsidiary
of Allied Energy, Inc., executed a drilling contract with
Independent Drilling,
LLC, Kilgore, TX and commenced spudding of the Yakesh 2-H
horizontal well,
located in Milam County, TX.
As
of
January 16, 2013, total vertical depth had been reached at 6,300
feet, and
after consultation and review of drilling logs, a decision was made
to drill
the lateral (horizontal) section through the upper Buda
formation. It is anticipated that the drilling
phase of the lateral section will be completed by early February
2013.
The costs of developing the Yakesh 2-H prospect are funded by
two
general partnerships sponsored by the Company. The
partnerships hold a majority working interest in the
Yakesh 2-H prospect. The Company
holds a 0.1% working interest (0.075% net revenue interest),
inclusive of its
interests in the general partnerships.
Non-Commercial Well Update:
B. Bryant #1 Prospect:
In early December 2012, the B.
Bryant #1 well, located in Wood County, TX, was drilled to the
Rodessa and
Pettit formations at a total depth of approximately 10,100
feet.
After
reaching total depth, the well was logged and Company engineers met
with log
analysts from Schlumberger to review the open-hole
logs and make recommendations for the completion of the
well.
After
extensive evaluation by Schlumberger Open Hole Logging experts,
Company
geologists, and Allied Energy Inc.’s VP of Operations, the
operational decision
was made to Plug and Abandon (P&A) the well. It was
determined that while the well was capable of
producing on a very limited basis, it was not capable of producing
in
quantities necessary to cover the costs of completing the
well.
The
drilling of the B. Bryant #1 well was funded by two general
partnerships
sponsored by the Company. The
partnerships hold a majority working interest in the B. Bryant
#1
prospect. The Company holds a
0.05037% working interest (0.03777% net revenue interest),
inclusive of its
interests in the general partnerships.
Completion Update:
Ragsdale #2 Well:
In November 2012, the Ragsdale #2 well, located in
Cherokee County, TX, was drilled to the Pettit formation at a total
depth of
approximately 10,500’.
Based
on
well logs run by Schlumberger, the Company believes that there are
hydrocarbons
present and approximately 70’ of pay.
A decision was made to complete the well, the operations of which
are
currently ongoing.
The
drilling and completion of the Ragsdale #2 well was funded by two
general
partnerships sponsored by the Company.
The partnerships hold a majority working interest in the Ragsdale
#2
prospect. The Company holds a
0.25% working interest (0.1875% net revenue interest), inclusive of
its
interests in the general partnerships.
Production Update:
E. Cantrell #1: During
August 2012, the E. Cantrell #1 well, located in Wood County, TX,
was drilled
to the Travis Peak formation at a total depth of approximately
10,709 ft.
After
reaching total depth, the well was logged and Company engineers met
with log
analysts from Schlumberger and consulting geologists to review the
open-hole
logs and make recommendations for the completion of the
well.
After
evaluation by Schlumberger and Company personnel, the operational
decision was
made to complete the well in the Rodessa formation.
The
well
is presently in initial stages of production testing.
The
drilling and completion of the E. Cantrell #1 well was funded by
two general
partnerships sponsored by the Company.
The partnerships hold a majority working interest in the E.
Cantrell #1
prospect. The Company holds a
0.05037% working interest (0.03777% net revenue interest),
inclusive of its
interests in the general partnerships.
Acquisition Update:
Yakesch Unit: In
August
2012, the Company acquired a 100% working interest (78-80% net
revenue
interest) in the 130.49-acre Yakesch Unit in Milam County,
TX. The lease includes one vertical well,
which is in the process of being re-completed and is not producing
hydrocarbons. The lease is being further developed
with the drilling of the Yakesh 2-H horizontal well primarily by
two
partnerships sponsored by the Company.
Operations management believes that there is the potential for
the
drilling of one additional vertical well on the Unit.
WT Pearson Lease:
In October 2012, the Company acquired the WT
Pearson Lease in Milam County, TX.
The lease is comprised of approximately 200 net acres, and includes
36
existing wellbores that were drilled to the Navarro sands. A
few of these wells are producing very
small amounts of oil. The Company
is in the process of checking each of these wellbores to attempt to
determine
their capabilities, if any.
The
wells
had combined total production for the fourth quarter of 2012 of
approximately
160 barrels of oil. To date, work
performed on the lease by the Company has been limited to deferred
maintenance
and basic remedial operations.
The
Company owns an 87.5% working interest (65.625% net revenue
interest) in the
lease. The development plan for
the lease includes the strategic deepening of certain of the wells
along with
the initiation of a “pressure maintenance” program. It is
estimated that there may be up to 12 additional
prospective well locations on the lease.
Clark Lease, Milam County, TX: In
October 2012, the Company acquired a 45% working interest, (33.75%
net revenue
interest) in the Clark Lease, and, in order to test the Pecan Gap
formation,
participated with an industry partner in the drilling of the Clark
#1 well to a
depth of 2,000’. The well is
currently being tested for completion.
The lease is comprised of approximately 198 net acres, and is
contiguous
with the Company’s 200-acre WT Pearson lease. It is estimated
that up to 20 additional drilling locations
may be available on the lease.
Pearson River Bottom Ranch Lease – Milam
County, TX:
In October 2012, the Company acquired a 45% working
interest, (33.75% net revenue interest), in the Pearson River
Bottom Ranch
Lease, which consists of approximately 5 net acres. In order
to test the Pecan Gap formation, the Company has
participated with an industry partner in the drilling of the
Pearson C1 well to
a depth of 1,800’. The well is
currently being tested for completion.
The lease is contiguous with the Company’s 200-acre WT Pearson
lease.
High Island Block 19S Prospect: In
October 2012, the Company entered into an agreement to participate
with
industry partners in the re-entry and reclamation of an orphan well
in
Jefferson County, TX. Allied's
share of the first well is a 3.0% working interest (2.25% net
revenue
interest). The work on the first
well is planned for the first quarter of 2013. The Company's
participation also includes the first right to
participate in any future wells on the entire 320-acre lease at up
to a 10%
working interest (7.5% net revenue interest).
North Constitution “Hooks” Prospect: In
October 2012, the Company entered into an agreement to participate
with
industry partners in the drilling of a 14,500’ well in Jefferson
County,
TX. The Company is participating
with a 3.25% working interest, (2.4375% net revenue
interest). Plans are to spud the well during the
first quarter of 2013.
J.T. Fields-Berry Lease: In
November 2012, the Company acquired an 87.5% working interest
(65.625% net
revenue interest) in the J.T. Fields-Berry Lease in Caldwell
County, TX. The lease is comprised of approximately
36 net acres and includes 5 existing wellbores that were drilled,
(during the
1980’s), to a depth of approximately 2,100’, to the Austin
Chalk/Buda
formations. One of the wellbores
was completed and is currently a marginal oil producer at less than
½ BOD. The remaining four wellbores were cased
by the previous operator, but have never been completed for
production.
The
plan
for the development of the lease is to drill a new well, obtain
fresh logs to
determine the precise depth of any oil bearing formation(s), and
then to treat
and complete the new well plus the four existing (drilled but not
completed)
wells. In addition to the existing
wells, there is an active saltwater disposal well located on the
lease. It is calculated that there could be up
to 7 additional prospective well locations on the
lease.
Opal Gas Unit: In
December 2012, the Company acquired a 100% working interest
(74%-80% net revenue
interest) in the Opal Gas Unit.
The leases that comprise the Unit have one vertical well that
produced 1
barrel of oil and 1703 MCF of natural gas in December 2012.
The Unit is comprised of approximately
703.6 net acres, and is contiguous to the Company’s 186-acre
“Ragsdale”
lease. It is estimated that the
lease could accommodate up to 6 additional vertical wells, or 2
horizontal
wells.
Rogers County, Oklahoma:
The Company continues to evaluate all
of the interests of the general partnerships for which the Company
acts as
managing general partner in Rogers County, OK. The Company is
conducting a review of production and expense
records to determine the financial condition of the partnerships
and the status
of each of the partnerships’ wells, (a large majority of which may
be
non-commercial). Based upon the
findings of the review, we expect to make specific recommendations
either to 1)
“shut-in” wells that might benefit by a future rebound in the
market prices of
gas, 2) plug and abandon wells deemed to be non-commercial, or 3)
continue to
operate wells that are profitable or may be candidates for
enhancement
procedures or re-engineering to improve production.
About Allied Energy:
Allied
Energy, Inc. is engaged in the oil and gas exploration and
development
business, with operations located primarily in Texas, Oklahoma and
Ohio. The Company sponsors oil & gas
partnerships through which it raises funds for the drilling and
development of
oil & gas wells. The Company
serves as managing general partner of the partnerships and often
owns differing
partnership interests in the partnerships and/or differing direct
interests in
the properties in which the partnerships
participate.
The Company’s
subsidiaries include Allied Operating, LLC and Allied Operating,
Texas, LLC,
two operating companies that are used to manage the drilling,
development and
operations of the oil & gas drilling partnerships sponsored by
the Company,
as well as for other non-affiliated oil and gas companies that are
joint
interest owners in drilling activities owned primarily by
partnerships
sponsored by the Company. The
Company is also majority owner of Allied Gas Transmission, Inc.,
which owns the
pipeline system used to transmit production from gas wells located
in Rogers
County, Oklahoma to gas purchasers.
The
Company’s ultimate strategic focus is on the development of oil and
natural gas
production and reserves. The
Company believes that its oil and natural gas development strategy
will provide
growth to the Company in the future.
For more information:
www.alliedenergy.com
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's
future operating results are dependent upon
many factors, including but not limited to: (I) the Company’s
ability to obtain
sufficient capital or strategic business arrangements to fund its
drilling
plans; (ii) the Company’s ability to 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:
Heather Age
Allied Energy, Inc.
2427 Russellville Road
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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