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Allied Energy Group Expands Drilling Operations in Schleicher County

Posted on: Friday, 19 May 2006, 09:06 CDT

Allied Energy Group, participating with Halliburton Operating Company, has announced tentative plans to drill two 6,000' +/- vertical wells to test the Strawn Limestone in Schleicher County, Texas.

The prospect is confirmed by excellent well control and positioned as a direct off-set to the Tucker-Milligan #1 completed for production in December, 1965.

The Tucker-Milligan #1 originally tested at the reported rate of 6.2 million cubic feet of gas and 87.9 barrels of condensate per day. It was completed for production in the Strawn Limestone at approximately 5,800 feet in vertical depth.

In 1965, when the Tucker-Milligan #1 was completed, natural gas was valued at approximately eight cents ($.08) per 1,000 cubic feet (MCF). Also, when placed in production, the Tucker-Milligan #1 had too little of line pressure (to sell into the main high pressure line), necessitating a compressor station in order to produce at full capacity. This severely restricted the well's production. These factors led to the Tucker-Milligan #1 being abandoned after producing only 118.85 million cubic feet of natural gas.

A lot has changed in 40 years.

1.) An extensive gas line infrastructure (providing the appropriate line pressure) now exists, alleviating the need for a compressor station. 2.) Natural gas prices today are nearly 100 times what they were in 1965.

"This is a prime example of how today's demand for natural gas can provide us with a rare, yet tremendous, opportunity in our industry," explained Mr. Steve Stengell, Sr. Vice President of Operations for the Allied Energy Group.

Drilling operations for the project are tentatively scheduled to begin in the third quarter of this year. "We are extremely confident regarding the company's future development in this area of Schleicher County," said Stengell.

Allied Energy Group is an independent energy company engaged in the domestic exploration and production of oil and natural gas, with drilling operations in Shelby, Leon, Kent, Dickens, Taylor, Schleicher, and Live Oak Counties, Texas.

Source: Business Wire

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