Allied Energy Corporation (OTC: AGYP) focuses on energy development and production by acquiring oil and gas reserves in regions of the United States. It specializes in the business of re-completing those already existing reserves that can be found in the mature oil and gas producing fields by applying its experience, knowledge, and effectual technologies in order to yield higher volumes of production and a more efficient recovery of those reserves. Some investors have noticed that AGYP stock is notably undervalued given its production capacity, giving investment in the stock a potential upside.

Catalysts

AGYP announced it has acquired the 325 acre Prometheus Lease in Garza County, Texas. The reason behind the acquisition was the company’s interest in the 28 Unit Well 1H, which was producing around 200 oil bpd and 300 thousand cubic feet of natural gas per day. This shows that the acquisition was very purposeful and well-planned, as AGYP strategizes each acquisition based on its probability to produce oil. On this note, CEO George Montieth promised that the company will utilize its resources, experience, and technologies in order to not only match but potentially surpass those numbers raising everyone’s expectations for the AGYP stock. 

On October 28, the company shared that it has ordered an Electrical Submersible high capacity pump specifically for the Prometheus’ well. While delivery is expected in approximately 10 days, this is a sign that the company will begin work at the lease site very soon. AGYP has had recent success with its oil production at other sites as well, announcing that it has been pumping oil and natural gas at the Gilmer Lease site since mid-October.  

Throughout this process, AGYP’s CEO George Monteith has led the company using his over 30 years of experience in resource based companies. For the past 37 years he has provided geological services, working on mining and oil and gas projects around the globe. He also attended the Haileybury School of Mines where he gained the expertise to work in this industry. Monteith has accepted convertible notes as settlement of his accrued salaries. He appears to have over $746 thousand in convertible notes currently outstanding which gives the CEO an incentive to strategize and work effectively for the company’s growth with the intention of raising AGYP’s stock price for his benefit and the company’s shareholders. 

Summary of Estimated Reserves

With AGYP now producing, it’s important to look back at its commissioned study of the Green Lease property in Baylor County, Texas which gave estimates of the site’s probable and possible reserves. The study was completed based on conservative calculations and parameters abiding by the U.S. SEC requirements. 

Another study of the natural oil and gas reserves of Annie Gilmer Lease was also released with the following findings: 

According to the SEC’s definitions, the proved oil and gas reserves are quantities of oil and natural gas reserves that can be estimated with reasonable certainty to be economically producible. The probable reserves are additional reserves that are less likely to be recovered than proved reserves. The possible reserves are additional reserves that are less likely to be recovered than probable reserves.

These studies were conducted in July when the 12 month trailing average price for oil was $46.26. Currently, the WTI price for crude oil is $82.17, which is almost double the estimate. This shows that crude oil is in demand with U.S crude prices already increasing 25% in the last two months alone. As AGYP continues production amidst the rise in demand, it’s potential reserves for the stock are clearly worth more than the estimate initially given.  

Media Sentiment

@DJPennyTrader and other investors are feeling confident thanks to AGYP’s promise to not dilute its shares.

Technical Analysis

AGYP stock chart

AGYP is currently trading at $.314 with an immediate support at .305 and a secondary support at .311. Its primary resistance lies at at .34, and it has a stronger support at 0.369. In October, the stock surpassed its resistance three times, peaking at .39. The MACD recently had a bullish crossover to the upside and accumulation has been generally increasing throughout the month. However, RSI is currently resting at 48.37

Its AS is 300 million and its total OS is 61.7 million leaving a float of roughly 47.8 million. 

Should you Buy?

Since October 1st, AGYP’s stock’s price has fluctuated between .3 and .39 hitting its resistance at .39 three times but struggling to break past it. This means that AGYP is seeing increased volume as its catalysts push the stock to test its hard resistance level. As the stock continues to fluctuate between these two price points, investors could make short term profits by finding optimal entry and exit points due to the stock’s volatility. 

However, long-term investment in AGYP could also be very beneficial as the company continues to produce at its newly acquired sites. With an experienced CEO strategizing to maximize the company’s ROI for shareholders and the increasing demand for crude oil, there are many reasons for long-term investment as well. Depending on demand for oil, AGYP’s PPS may fluctuate but overall the company has made significant and promising progress signaling a great opportunity for those investing in AGYP’s stocks.

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