Energy Industry Trends
Copyright 2013, Allied Energy, Inc.
Why Allied Energy's Prospects are so Attractive

• The Allied leasehold inventory is infill and shallow so the dry hole risk is very low.
• Allied wells produce a mix of oil and natural gas, thereby generating high average price realizations.
• Allied owns most of the necessary equipment and has committed a drilling rig under long term contract to drill wells at a very attractive daily rate.
• Each well takes seven days to drill and complete then can be in production within the same month.
• The multiple well drilling and recompletion program generates significant cash flow from the third month from each well.

(YEAR ONE) 2013-2020

The drilling program already underway moved forward with the successful recompletions in 2010 of two of our sixteen 5,000' ft. wells, with additional recompletions in 2011 planned at a rate of two wells per month. In addition, we are now planning for the drilling of what we have termed, ”Horizontal Short-Radius Extensions“ as illustrated, devoted to the shallow oil/gas formations down to 5,000' ft. to include the drilldown of existing wells from 1,800' ft. down to 3,000' ft. Production revenues for the next 12 months from all wells will average 200-300 barrels of oil (boe) per day at $90.00 per barrel. Production can be expected to begin 30 -45 days from the completion of each well and completed at a rate of 3 wells per month.

High oil prices and a seeming decline in the number of "major" oil discoveries has created a market for smaller "independents," like Allied Energy Inc., who independently scour the planet for oil, but typically are not involved in refining and distributing the finished product.

Oil exploration represents the very first piece of the long petroleum value chain that ultimately brings gasoline to the gas station. Riskier exploration prospects are offered in off-shore facilities -- exploring off-shore is also more expensive, requiring a larger discovery in order to break-even. The riskiest of all exploration involves "non-conventional" sources of oil, such as oil shale or the oil sands.

Key Reasons for the Demand for New Oil Exploration

Price of oil -
The backdrop to all conversations about oil exploration is both the price, and the current worldwide proven reserves, of oil. Taken together, these determine whether a specific exploration project will be economically attractive. In particular, the higher the price of oil, the more expensive it can be to draw oil out of the ground and still make a profit. This makes smaller fields, more remote fields, and oil that requires more processing all the more viable. Allied's West Virginia Oil fields produce some of the world's highest grade oil, and highest BTU natural gas.

Technology -
The availability of computers and advances in seismic technology have drastically improved the process of oil exploration. Advances have pushed the envelope of what is feasible, both in terms of finding where oil is and figuring out how to extract it once a company has identified where it is. A variety of engineering and seismic services firms offer the latest in technology to find oil (e.g., 3D seismic mapping).

Availability of oil field services -
The availability of equipment and qualified professionals to service it represents a significant challange in oil exploration. The price of oilfield services, which includes all the outside requirements for drilling and operating a well, rose 20% in 2006. Lack of availability of drill rigs, skilled petroleum services professionals, seismic trucks, etc., can be a constraint in oil exploration. Allied Energy Inc. has outsourced certain functions to a highly recognized industry group of professional companies and has thereby significantly reduced overhead costs while critically maintaining quality control over its operations. Allied's crews are some of the industry's best, they are committed to the area, and take pride in their abillities and their care of the local environment.