Despite increasing oil demand, OPEC+ has maintained gradual increases of 400,000 bpd per month since cutting output to 9.7 million barrels per day in 2020. This cutback was equivalent to 10% of daily demand for the year, but as restrictions ease and cold weather sets in, oil demand has begun outpacing supply across the country. OPEC is scheduled to meet on November 4th amidst requests from the US and other major consumers to increase output. However, the cartel is expected to stick with its conservative production strategy for the time being and this uncertainty is a boon for domestic oil producers like Allied Energy Corp. (OTC: AGYP) and AGYP stock.

Catalysts

AGYP has earned a place among the top energy penny stocks having recently achieved oil production at two of its lease sites. An oil and gas exploration and production company, AGYP’s business model consists of acquiring gas and oil reserve sites in regions of the United States that are known for being historically oil rich. This past year, the company has achieved major growth while also setting the groundwork for its long-term growth which is a bullish sign for long-term investors.

The company’s strategy consists of reworking and recompleting ‘existing’ oil and gas wells which are “located in the thousands of mature oil and gas producing fields”. As a result, AGYP has been able to keep costs low while it worked to bring the Green Lease and Gilmer sites up to date on production. This strategy seems to have paid off now that both sites are producing and has allowed the company to acquire a new site – the Prometheus.

The 325 acre Prometheus Lease site located in Garza County, Texas caught AGYP’s interest mainly because of the 28 Unit Well 1H. This well was producing around 200 bpd of oil and 300 thousand cubic feet of natural gas per day during production. But the company’s CEO – George Montieth – has hinted that the combination of technology and skill which AGYP brings to the table could help it not only match but potentially surpass those numbers.

While the Prometheus site is not yet producing, production at the Green Lease site and Annie Gilmer site could prove very profitable for the company. According to a commissioned study executed by the petroleum engineer Mark McBryde, the Green Lease site holds $2,944,900 of proved oil and $18,536,600 of probable and possible oil while the Annie Gilmer site holds $6,704,900 in proved oil and gas reserves with $5,489,900 in probable and possible reserves.

Media Sentiment

It seems that AGYP’s steady progress and commitment to shareholders has inspired loyalty from long-term investors like @jeniferclara102

Technical Analysis

AGYP stock chart

Currently trading at $.30, AGYP stock has hit a new support at .2932 while maintaining its resistance at .311. The MACD had a bearish crossover on the 29th but appears poised for a reversal. Accumulation has been trending upwards which is a bullish sign for AGYP stock while RSI remains at 41.

Should you Buy?

Oil stocks are characteristically volatile and typically long-term holds. With this in mind, investors should be wary of the commitment that may be required before seeing a ROI on AGYP stock. However, shareholders have reason to be bullish as AGYP passes each milestone of production. Given the oil markets recent turn in favor of domestic oil producers, if this trend continues then AGYP could have a very promising future. Its also worth noting that oil producing stocks move on news and as the company updates investors on its progress at the Prometheus, Gilmer, and Green Lease sites, shareholders may see a profitable spike in AGYP stock.

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