AGGI Allied Energy Inc (PK)

Allied Energy Group, Inc. (Pink Sheets:AGGI) provided the following update regarding its oil and gas projects in Oklahoma and Eastern Kentucky. Rogers County, Oklahoma In the second quarter, Allied closed on an acquisition that increased its net revenue interest (NRI) to 63.75% in 1,075 acres where there are 14 producing gas wells and 3 gas wells awaiting reworking services. As part of the acquisition, Allied also secured a 75% net revenue interest in over 1,780 acres in this same field where there are another 10 wells being put into production. In total, Allied has secured approximately 3,100 +/- acres in Rogers County and has planned expenditures for 34 new wells over the next year or so. Assuming Allied enjoys the same success rate to date, this would bring Allied�s total well count in this area to 58 wells. Allied is currently working to secure additional acreage as part of its strategy to drill 150 to 200 wells in this area. �Thus far, we have enjoyed success in this area and anticipate consistent production results from each well drilled,� said Steve Stengell, Allied�s Vice President of Operations. �It is our goal to secure over 5,000 acres of total acreage by year-end so that we have sufficient acreage inventory to be able to drill our next 40 wells. Our current efforts are focused on securing the remaining acreage in an 11 to 15 mile corridor where we would be able to control the well operations, gas gathering infrastructure and selling of gas directly to market without any middlemen involved.� At the June board meeting that was held in Tulsa, OK, it was decided to expand the Company�s operations in this area of Oklahoma. As part of that decision, the company is evaluating several projects that could quickly add close to 4,000 acres of new acreage to develop. �Despite record levels of rainfall for this area of Oklahoma, we are making progress in the execution of our business strategy in this area and are continuing the expansion of our field operations,� said Allied�s President, Cole Halliburton. �In fact, two well programs in this field are nearly ready for drilling and with a break in the weather we should be able to get to work on another 14 wells,� he added. Eastern Kentucky The Don Sullivan #8, Clarence Bright #2, and Dale Greer #1 were successfully drilled and encountered gas in the Big Lime and/or Waverly formations. The Company owns 16.67% working interest in each of these three wells. An acid �frac� stimulation has been successfully performed for both the Don Sullivan #8 and Dale Greer #1 wells located in Knox and Laurel Counties, Kentucky. A sand �frac� stimulation was also performed for the Clarence Bright #2. Although the Don Sullivan #8 initially was placed into production at a reported initial rate of 60,000 cubic feet of gas per day (60 MCFD) and initial production rates for each of the wells were projected at 40 � 100,000 MCFD per well, the wells are now producing at a much lower rate with combined production of 25,000 +/ cubic feet of gas per day from all three wells. Illinois Basin Although the Company has not initiated any drilling operations in the Illinois Basin, the Company continues to review potential future developments in this area. Over the last two months, the Company has been in discussions with one of its industry partners about a 20,000 acre project in the Illinois Basin that would target the New Albany Shale for natural gas. There can be no guarantee that this project will be pursued and that if developed it will be commercially productive. 2006 Audited Financial Statements The Company is pleased to report the completion of its 2006 financial audit. The Company�s financial information can be viewed at www.pinksheets.com. About Allied Energy Group Allied Energy Group, Inc. (Pink Sheets: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 industry partners, well operators, geologists, petroleum engineers, seismic specialists, and financial analysts whose combined industry experience is essential to the success of each project. Allied Energy Group�s strategic focus is the development of oil and natural gas reserves. As the fuel of choice to meet the growing demand for a clean-burning domestically produced fuel, the company firmly believes its natural gas exploration strategy should provide substantial growth to the company for the 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, uncertainties and other factors that may cause the actual results, 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; and (iv) other risk factors.