Allied Preps Drill Site at Giddings Field in East Texas

Allied Energy has built 2.2 miles of road and the drill-site location in preparation of drilling its initial horizontal test location in the historic "Giddings Field Area" of East Texas.

The proposed horizontal location is a direct PUD, Proved Undeveloped, offset location to the Apache Corporation Butaud #1 Well located in Grimes County, Texas that was completed in March 2009 and tested and reported at 4,833 MCFD (thousand cubic feet per day) of gas and 30 BCPD (barrels of condensate per day). As per its production records, the Butaud #1 continues to produce from a single lateral at an estimated and reported daily rate approaching ~ 2,500 MCFD of gas and 30 BC.

The proposed plans for an initial horizontal test well are to drill a long length single lateral and/or two (2) opposing horizontal laterals. Although risks do exist and the Company can make no assurances, this long length single lateral and/or dual-lateral strategy could enhance reserve and production potential for this location.

As reported by the Texas Railroad Commission (TRC), the nearby Chesapeake Upchurch #1 Horizontal Well located in a similar setting was completed for production in 1992 and initially tested at 6,200 +/- MCFDGE (thousand cubic feet of gas per day equivalent) and produced 3.6 billion cubic feet of natural gas and more than 147,000 BC in less than five years from a single (1) lateral.

Per the October production reports as reported by the TRC, the offsetting Apache Producing Wells in the field area have combined produced more than ~ 1.5 billion cubic feet of gas and 18,000 BC over an average period of seven months.

Allied has acquired substantial working interest position in the initial test location and in the project area which potentially consists of thousands of acres located in the prolific Austin Chalk, Buda and Georgetown horizontal trends.

"We are tentatively scheduled to begin drilling operations in the next several weeks," said Steve Stengell, Allied's President.

There exist tremendous risks and uncertainty associated with oil and natural gas development including but not limited to the geological and mechanical risks associated with horizontal drilling. The Company can make no assurances as it relates to estimated reserves, production rates, timelines, etc. for any oil and gas project.