Allied Energy Corp. (OTCMKTS:AGYP) may see higher stock prices this week as Reuters reports a larger number of oil and gas independents and even majors are cranking up the wells again. The reason: sharply higher oil prices that remain high despite some swings. They’re up 67% YTD.
WTI Crude this week end settled at $81.27 up 3.12% and Brent Crude rose to $82.74, 2.73% higher, according to oil.com. Both closed green and remained high. Bank of America sees oil skyrocketing by 43% to $220 per barrel by next summer. Oil is already at seven-year highs.
As a result, Reuters reports this weekend that U.S. energy independent oil drillers are bringing out the rigs again. Their number rose for the second week in a row. Six more were added last week to raise the new total number to 550. That’s the highest number since April 2020.
All of this is an early indicator of future energy output. AGYP is well positioned. Early on, it was exploring for new energy and gas. As an independent operating in Texas, it hit oil in five wells and now is looking for more. Documentation of AGYP’s findings were reported to the Texas RR Commission.
Total rig count was up 250 rigs — or 83% more than this time last year. Baker Hughes Co. says in its report that that U.S. oil rigs rose to 450 last week, while gas rigs remained unchanged at 100. Most are located in the Permian Basin in Texas and New Mexico.
Not only are independents starting up again, majors are too. Firms such as BP, Chevron, Exxon Mobil Corp. and Occidental Petroleum are planning to increase spending and planning to pump additional fossil fuels. They are starting to increase shale spending.
Cowen & Co. reports that independents — like AGYP — are tracking to increase spending on oil exploration by 4% this year vs. last. But for 2022, they are budgeting to spend 22% more. This is after reductions in oil and gas energy spending of 48% in 2020 and 12% in 2019.
To AGYP, oil pricing directly impacts its assets-under-management valuation. After weeks of red-hot rising price increases, the major oil indices remain high. All of this bodes well for future oil and overall energy production.
Oil market prices remain high and shortages persist. AGYP Tweets on its progress at Prometheus as global prices swing wildly. As late as 2016, this Prometheus well produced 200 barrels of oil daily. It also generated 300,000 cubic feet of natural gas.
AGYP’s catalyst is that it is pumping oil within the U.S. AGYP is making older or abandoned commercial wells new again. It uses 2021 technology to revive these wells. The newest techniques include fracking, down hole drilling and horizontal ‘legs’.
An oil and gas engineer early last summer determined that AGYP had some $32 million in oil and gas reserves at current prices. He used now out-dated $46 per barrel market pricing at the time. He also has not analyzed potential oil and gas reserves at Prometheus.
AGYP is a small independent, but it plays an important role. It has already hit five oil and gas wells combined on the Texas Green Lease Sites and Annie Gilmer Sites. Ahead is the Company’s exploration of the promising Prometheus site. AGYP is focusing on the 28 Unit Well 1-H at the Prometheus well site.
Meanwhile, as the oil and gas industry moves to increase energy exploration as prices rise and supplies are short, the Biden Administration is seeking other strategies. As OPEC continues to deny its requests to pump more oil, now the U.S. government is closer to tapping US strategic oil reserves.
Biden is seeking to use some of the 600 million barrels of oil in the reserves to fill in the energy shortfall.
AGYP stock remained flat Friday evening, closing at $0.3046, off 0.44%. Trading was extremely light at 184,626. That’s less than half of its daily average.
Keep AGYP on your Watch List as energy stocks are jumping in value as more rigs make exploring and producing energy fashionable again.
This article is sponsored coverage.