BOWLING GREEN, KY -- (Marketwire) -- 03/01/11 -- Allied Energy, Inc. (PINKSHEETS: AGGI), through its majority owned subsidiary (60% majority ownership), Allied Gas Transmission, provided the following update today for its more recent expansion and pipeline system development in Grimes County, Texas.
Allied Energy, Inc. contracted Allied Gas Transmission (AGT), a majority owned subsidiary of Allied, to trench, lay line and connect the Howard #1H and #2H to the local gas market. In 2010, Allied Energy, Inc. signed and executed a connection agreement with Atmos Energy, Inc. in order to sell gas in Grimes County.
The Allied Howard #1H is presently producing at a rate of ~2.5 million cubic feet of gas per day equivalent and the Allied Howard #2H is currently awaiting turn-on, while a larger J/T unit is being installed on its location. Initially, the #2H would maximize or overload production into the existing production facility causing the J/T unit to shut-in. 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).
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 ~170 - 200 million cubic feet of gas per month equivalent, at least for the short-term. Based on actual production test information, wellhead pressure, etc. and reports from regional experts and engineers, the Company believes the Allied Howard #2H may become the most prolific producer in the regional Georgetown Buda trend.
The Company is tentatively scheduled to begin drilling the Allied Howard #3H as early as 3 - 5 weeks and has plans to drill a fourth horizontal, the Allied Howard #4H, this spring or summer. The Company's plan is to produce and deliver gas from the #1H, #2H and #4H wells directly through the Allied Gas Transmission line to the end purchaser, Atmos Energy main line connection. Allied is targeting gross production volume estimates of up to 7 - 10 million cubic feet of gas equivalent per day combined production (transported through the AGT line) from these three horizontal wells within the next year.
'We are extremely pleased with the results we have seen thus far for the Allied Howard #1H and #2H projects and are excited about the fact that AGT will deliver gas from this area of the field directly to the Atmos Energy connection,' said Steve Stengell, Allied's President and CEO. 'Allied plans to continue to pursue and develop additional horizontal opportunities in Central-East Texas and are now making preliminary plans to drill the Allied Howard #4H in Grimes County as early as this spring or summer,' added Stengell.
Allied Gas Transmission also owns a gas processing facility; other related transmission equipment, exclusive master meter rights, etc. and operates ~6 - 8 miles of gas line in Rogers County, Oklahoma.
No assurances can be made as it relates to present or future production rates or estimated reserves for any given project or the company as a whole. Tremendous risks and uncertainty are associated with oil and gas drilling, completion, development, gas transmission and production operations. It is impossible to estimate future rates and/or declines in production operations for oil, condensate and natural gas. The production rates forecasted herein are estimates only and subject to uncertainty. Gas equivalent amounts represent the liquid NGL and condensate production converted to gas MCFs at today's prices.
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 operating companies and other subsidiaries, strategic industry partners, petroleum geologists, engineers, subcontractors and support personnel whose combined industry experience is essential to the success of each project. Allied Energy's strategic focus is the development of oil and natural gas production and reserves. The Company firmly believes its oil and natural gas exploration strategy will provide substantial growth to the Company for years to come. For more information: www.alliedenergy.com
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 may have varying degrees of working 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 including but not limited to the strength of the overall economy; and (iv) other risk factors inherent to the oil and gas industry.