Allied Energy, Inc. (AGGI)

[OilStockReport]

Fiscal Year Results

BOWLING GREEN, KY--(Marketwire - 04/20/11) - Allied Energy (Pinksheets:AGGI - News) 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.