WTI and Brent Crude oil prices rose 4.6l% and 4.11%, respectively, in after-hours trading last night, according to oilprice.com. This is in reaction to U.S. oil inventories hitting an 18-month low, according to Bloomberg and MarketTradingEssentials, as oil industry equities advanced. That oil prices became very volatile last night is an advantage to Allied Energy Corp. (OTCMKTS: AGYP). Oil traders had told The Wall Street Journal in real time that they were betting on a decline in oil prices. That didn’t happen — oil prices and futures rose or held last night — contrary to the views of oil experts. AGYP stock closed last night off at $0.5499 in light trading (volume 279,294, only 60+% of average volume of 461,188). A U.S. government Energy Information Administration (EIA) report on last week’s drop in domestic distillate supplies and gasoline stockpiles was reported by Bloomberg.
AGYP’s value rises as WTI and Brent Crude oil prices rise or hold because its assets-under-management (AUM) underlying valuation spikes against the price of global oil. As oil prices rise, so does the value of AGYP as it says it prepares to pump, particularly from its Well M-1 at its Green Lease location. Volatility in stocks of oil reserves and pricing of WTI and Brent Crude futures is due to larger economic issues including how much the Delta Variant strain of COVID-19 will impact global recovery. Demand directly impacts oil pricing. In this fast-changing environment, AGYP stands to gain when it begins pumping oil from its Texas-based wells at its Green Lease and Annie Gilmer Lease sites.
Two issues are in play with AGYP: revenue producing oil production at one or more of its well sites; and the price of WTI and Brent Crude oil prices. If AGYP can begin selling barrels of oil from its MI or K-3 Wells at its Green Lease site, that is significant to Small Cap shareholders — longs and shorts. As domestic and global oil reserves play against a very uncertain worldwide demand, larger oil pricing issues can make AGYP’s assets spike.
Even oil traders quoted on Q3 and Q4 prices of oil expect “wild gyrations” ahead in quotes as the market demand rapidly changes — due to COVID-19 and the Delta Variant. Should consumers mask or not, and even some 25% of medical workers remain un-vaccinated. In this changing economy, AGYP may flourish.
AGYP can only control its own leased well sites at its primary two locations. With one eye on oil pricing and the other on its own efficient use of new technology on very old abandoned wells — its business model — it can deliver profitability as OPEC, UAE and other major producers have to confront COVID-19 Delta Variant economies worldwide. AGYP oil will always be valuable within the U.S., as it is new energy from proven reserves from older wells. Its oil pricing will have to be competitive with WTI and Brent Crude, but it will be a sure and local product.
A PDF presentation prepared for AGYP by an oil & gas expert consulting firm said the Green Lease site said the site had originally been drilled back in the 1940s, but it has changed hands numerous times since and been under-utilized. AGYPs newest effort “will be the first to apply the most current drilling and production practices to the lease in 50 years.”
AGYP calls this site “historically underutilized” while nearby locations have produced production to date greater than six times than current production. Complex limestone reservoirs now are being drilled with extensive development “due to improvements in completion technology,” the company said in the PDF presentation.
With this new drilling technology, AGYP estimates the Green Lease has the potential to generate substantial production. Studies show one section alone has almost $3 million in reserves on a $45/BO flat price deck. Adjacent lime lease sites are seen to have the potential of strong producers. New technology will enable AGYP to access these reserves, AGYP wrote in the presentation, prepared by privately-held Ardent Oil & Gas Consultants, specialists in sub-surface geology and geophysics for ‘conventional’ hydrocarbon exploration.
George Monteith, CEO of AGYP, is bullish on the Company’s new technology pumping the proven and probable reserves of oil on its lease sites. The AGYP-leased Gilmer site has produced in its lifetime more than five hundred thousand barrels of high gravity oil and more than five hundred million cubic feet of natural gas.
For updated details, see AGYP’s company tweets.