BOWLING GREEN, KY -- (Marketwired) -- 05/24/13 -- Allied Energy, Inc. ("Company") (OTC Pink: AGGI) today announced updates relating to its operations.
J.T. Fields-Berry Wells, Caldwell County, TX: During March 2013, the Company began the development of five wells in Caldwell County, TX, consisting of four existing wells and one newly-drilled well. Our engineers are targeting both the Buda and Austin Chalk formations in each of the wells; thus far, one well has been completed in both zones, three wells have been completed in the Buda formation only, and one well has been completed in the Austin Chalk formation only.
As of May 2013, the wells have been placed on pump and are now in the "flow-back" stage, during which time remaining treatment fluids are being recovered. We are beginning to see an "oil cut" in the returning fluids, with total average aggregate production for all five wells ranging from 25 to 30 barrels of oil per day ("bopd").
The costs of developing the wells located within the J.T. Fields-Berry lease are being funded by a general partnership sponsored by the Company. The partnership holds an aggregate majority working interest in the J.T. Fields-Berry wells. The Company holds a 0.1% working interest (0.075% net revenue interest), inclusive of its interests in the general partnership.
Clark #1 Test Well, Milam County, TX: During August 2012, the Company participated with an industry partner in the drilling of the Clark #1 test well, with the objective of testing the Pecan Gap formation. The Pecan Gap formation was determined to be non-productive, and Allied has elected to move "up-hole" to test and attempt completion in the Navarro Sands formation, which is known to be productive in the area. Upon that election, the industry partner transferred its interest to Allied, and the Company now owns a 100.0% working interest (77.25% net revenue interest) in the Clark #1 test well.
Pearson C1 Test Well, Milam County, TX: During August 2012, the Company participated with an industry partner in the drilling of the Pearson C1 test well, with the objective of testing the Pecan Gap formation. The Pecan Gap formation was determined to be non-productive, and Allied has elected to move "up-hole" to test and attempt completion in the Navarro Sands formation, which is known to be productive in the area. Upon that election, the industry partner transferred its interest to Allied, and the Company now owns a 100% working interest (77.25% net revenue interest) in the Pearson C1 test well.
Non-Commercial Well Update:
#1 Konvicka Well, Lavaca County, Texas: During December 2011, the Company purchased working interests in the #1 Konvicka well located on the Yoakum East Property lease. In January 2012, in an attempt to increase production, a fracking operation was scheduled and completed. Due to unknown reasons, the procedure failed. The Company's engineer has finalized a report of the failed procedure, and there are no further plans to re-complete the well. The costs of developing the #1 Konvicka well were funded by general partnerships sponsored by the Company.
Ragsdale #2 Well: During March 2013, the Ragsdale #2 well, located in Cherokee County, TX, was completed and placed on pump. The well produced approximately 20 bopd during initial production testing and during April 2013, it produced a total of 159 barrels of oil.
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 well. The Company holds a 0.25% working interest (0.1875% net revenue interest) in the well, inclusive of its interests in the general partnerships.
E. Cantrell #1: The E. Cantrell #1 well, located in Wood County, TX, was placed into production during February 2013. The E. Cantrell #1 well produced 243 barrels of oil during the month March 2013 and 72 barrels of oil during the month of April 2013.
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) in the well, inclusive of its interests in the general partnerships.
Acquisition of Additional Acreage in Milam County, TX: During May 2013, the Company acquired a lease in Milam County, TX, comprising 240 acres.
Additional Working Interest Acquired in the High Island Block 19S Prospect: In May 2013, the Company entered into an agreement to purchase an additional 77% working interest in the High Island 19S Prospect, which brings the Company's total working interest ownership to 80% and a corresponding net revenue interest ranging between 59.2% and 63.2%.
Withdrawal from Participation:
North Constitution "Hooks" Prospect: In October 2012, the Company entered into an agreement to participate with industry partners in the drilling of a well in Jefferson County, TX. During March 2013, the Company executed an "exit agreement" which formally withdrew the Company from any participation or involvement in the North Constitution "Hooks" Prospect.
Disposition of Certain General Partnerships:
Rogers County, Oklahoma: The Company continues to evaluate all 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 have begun 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.
It is anticipated that some of the general partnerships sponsored by the Company holding interests in wells in Rogers County, Oklahoma may be terminated due to non-profitable operations.
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 undertake, either directly or through third-party contracting entities, 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, and 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, and 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.
Allied Energy, Inc.
2427 Russellville Road
Bowling Green, KY 42101
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