Allied Energy Corp.’s (OTCMKTS: AGYP) business model of reworking proven, recoverable reserves have enabled it to cut cost and time, allowing it to focus on rapid expansion by acquiring interests in various projects. That minimizes its risk while pursuing revenue growth.
Allied’s initial projects included Byers Heirs #2, Byers Heirs #1 and Cameron #1; then, the company expediently announced an 80% stake acquisition in two northern Texas oil wells. The surrounding Baylor County area, known as Green Lease, enables Allied to develop up to ten additional wells.
After reworking Well M-1 and Well X-3, Allied achieved ongoing oil production at Green Lease. The estimated recovery of the two wells is approximately 113,000 oil barrels. At the current $80 per barrel of crude oil, the revenue would amount to $9,040,000. The company acquired this new asset through a non-dilutive, cash purchase.
Further portfolio expansion resulted in the lease of 300 acres containing additional five wells as part of the Annie Gilmer Lease. The lease contains oil and gas reserves at an approximate depth of 3250’ below Earth’s surface. When the company announced that Wells 1 and 5 produced and pumped oil, its stock rose by 5.77% overnight and closed at $0.3390 at the time. Later, Allied announced that Well 2 also pumped and produced oil and natural gas.
From the two sites, Allied had produced oil at five wells and looked to explore more oil and gas.
Allied further expanded by securing the 325 acre Prometheus Lease. The lease consists of multiple wells, one that produces 60 barrels per day. But Allied’s focus was on the 28 Unit Well 1H, previously producing 200 oil barrels per day and 300,000 cubic feet of natural gas per day. The company stated that the well also produced 2557 barrels of flow back and formation water.
Not one to waste time, Allied announced a plan to get the Well 1H back online. The oil operations manager structured a three-phase strategy, consisting of rigging up and setting a blow-up preventer on the wellhead. Phase two consisted of running the pump into Well 1H, and phase three was upgrading the electrical services to achieve full production settings.
Allied’s commitment to transparency led the company to hire a petroleum engineer to evaluate its leases. After careful evaluation, Mark McBryde estimated that the Green Lease reserves were worth $20,563.100. McBryde estimated the Annie Gilmer site reserves at $12,194,800.
The company has significant growth potential as its currently working on restoring wells that have proven to be lucrative, and it has several untapped wells as part of its leases.
Apart from its own assets, Allied Energy Corp.’s growth potential also lies in increasing oil prices and increased spending from corporations such as Occidental Petroleum, BP, Chevron and Exxon Mobile Corp. Although Allied’s current main projects are located in South and East Texas, the company has plans to expand beyond these areas to revive sources by using the latest technology and keeping costs minimal.