UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2013~~2014.

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

___ to

Commission file number: 000-31390

ALLIED RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada

98-0187744

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

1403 East 900 South, Salt Lake City, Utah 84105

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (801) 582-9609

Securities registered under Section 12(b) of the Act: none.

Securities registered under Section 12(g) of the Act: common stock (title of class), $0.001 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such

reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during

the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not

contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements

incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller

reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule

12b-2 of the Exchange Act. Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

The aggregate market value of the registrant's common stock, $0.001 par value (the only class of voting stock), held by

non-affiliates (3,573,011 shares) was approximately $1464,~~071,903~~491 based on the average closing bid and ask prices ($0.3013) for the

common stock on ~~March~~April 3114, ~~2014~~2015.

At ~~March 31~~ April 15, ~~2014~~ 2015, the number of shares outstanding of the registrant's common stock, $0.001 par value (the only class of voting

stock), was 5,653,011.

TABLE OF CONTENTS

PART I

Item1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

1716

Item 2.

Properties

1716

Item 3.

Legal Proceedings

2019

Item 4.

Mine Safety Disclosures

2019

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of

2120

Equity Securities

Item 6.

Selected Financial Data

2221

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2221

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

2827

Item 8.

Financial Statements and Supplementary Data

2827

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

2928

Item 9A.

Controls and Procedures

2928

Item 9B.

Other Information

3029

PART III

Item 10.

Directors, Executive Officers, and Corporate Governance

3130

Item 11.

Executive Compensation

3534

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

3736

Matters

Item 13.

Certain Relationships and Related Transactions, and Director Independence

3736

Item 14.

Principal Accountant Fees and Services

3837

PART IV

Item 15.

Exhibits, Financial Statement Schedules

3938

Signatures

4039

PART I

ITEM 1.

BUSINESS

As used herein the terms “Allied,” “we,” “our,” “us,” refer to Allied Resources, Inc., and our

predecessors, unless the context indicates otherwise.

Corporate History

Allied was incorporated as “General Allied Oil and Gas Co” on April 15, 1979 in West Virginia., ~~The~~which

~~company’s~~ name was changed to “Allied Resources, Inc.” on August 12, 1998. On February 26, 2002, we incorporated

~~incorporated a new company by the name of~~ “Allied Resources, Inc.” in Nevada ~~for~~to merge the ~~purpose~~West ofVirginia ~~merging~~entity with the Nevada entity. The merger

~~the~~was ~~West~~completed ~~Virginia~~on ~~company~~April ~~with~~5, ~~the Nevada company~~2002. ~~The transaction resulted in the Nevada company~~

surviving the merger as the sole remaining entity. The purpose of the transaction was to remove Allied’s

domicile to a jurisdiction with tested corporate legislation and to reduce corporate maintenance costs. The

merger was completed on April 5, 2002. Pursuant to the merger, shareholders of the West Virginia

corporation received one share of the Nevada corporation for each share held in the West Virginia

corporation.

Allied’s principal place of business is located at 1403 East 900 South, Salt Lake City, Utah, 84105. Our

telephone number is (801) 582-9609. Our registered statutory office is located at JAD Communications,

LLC., 5209 West Gowan Road, Las Vegas, Nevada 89130.

Allied trades on the Over the Counter Bulletin Board under the symbol “ALOD”.

Allied

Allied is an independent oil and natural gas producer involved in the exploration, development, production

and sale of oil and gas derived from properties located in Calhoun and Ritchie Counties, West Virginia, and

Goliad, Edwards and Jackson Counties, Texas.

West Virginia Well Information

Allied owns varying interests in a total of 145 wells in West Virginia on several leases held by an

independent operator. Some leases contain multiple wells. All the wells in which we have an interest are

situated on developed acreage spread over 3,400 acres in Ritchie and Calhoun Counties. Depth of the

producing intervals varies from 1,730 ft to 5,472 ft. Allied believes that operating in West Virginia has

certain advantages over other locations, including:

§ relatively inexpensive drilling and completion operations, and

§ the absence of poisonous gas often associated with oil and gas production.

Many of our wells are situated on the same leases and as such share production equipment in order to

minimize lease operating costs.

Our working interest is defined as interest in oil and gas that includes responsibility for all drilling,

developing, and operating costs varying from 18.75% to 75%. Our net revenue interest is defined as that

portion of oil and gas production revenue after deduction of royalties, varying from 15.00% to 65.625%.

The distribution of our interests in West Virginia oil and gas leases is detailed below:

West Virginia Oil and Gas Leases

Well Name(s)

% Working Interest

% Net Revenue Interest

Anderson

63.5742

Batson

51.5625

45.1172

Britton

63.28125

B. Rutherford

65.625

Cokely 582

63.5742

Cokely 633-654

60.9375

Conrad

61.5234

Deem

63.5742

E. Goff

58.8867

Jay Goff

65.625

55.3709

John Goff

60.9375

51.416

Fire Snyder

61.5732

GT Sommerville

65.625

Gus Bee

63.5742

Foster

70.3125

52.7344

Kennedy

63.5742

Law

63.5742

Leeson

65.625

Mullenix

33.984

27.12

Wellings

61.5234

Wellings 1A

63.9637

55.9682

Patton

63.5942

Riddle

65.625

Richards

63.5742

A. J. Scott

37.5

32.8125

Spurgeon

63.5742

Stanley 2 & 3

18.75

15.00

Stanley 583

63.5742

Summers 2

63.28125

Sutton

72.6562

55.0593

Taylor Carr

70.3125

54.9316

Toothman

65.625

Vincent 20 C

65.625

Vincent 25 C

65.625

Vincent 35 C

65.625

Vincent 41 C

65.625

V. Zinn

65.625

Baker Baughman

65.625

Baker Baughman 81

65.625

Bollinger

60.9375

Gill

65.625

Gill 3

43.75

Haddox

65.625

Mills

65.625

Sweet 1 & 2

65.625

Sweet 3

43.75

Watson

65.625

Watson 85

65.625

Watson 86

65.625

Watson 6-87

65.625

Wolfe

56.25

Browne 1

65.625

West Virginia Operator

Our West Virginia wells are maintained and operated by Allstate Energy Corporation (“Allstate”), a local

operator, under the terms of an operating agreement. Allstate maintains an interest in each of our wells.

The terms of the operating agreement, as amended, grant Allstate the exclusive right to conduct operations

in respect to our interests in our wells in exchange for a monthly operating fee for each well and any other

costs incurred in normal operation of the wells. Title to all machinery, equipment, or other property

attached to the wells under the operating agreement, as amended, belongs to each party in proportion to its

interest in each well, as does any amount recovered as the result of salvaging machinery or equipment from

the wells. Under the operating agreement, as amended, Allstate is permitted to make capital expenditures on

the wells up to $5,000 without notifying Allied in advance of the expense. However, notice of amounts to

be spent over $5,000 must be provided to us prior to expenditure for our approval if we own a majority

interest in the specific well. Likewise, the abandonment of wells must be approved by the party holding a

majority interest in the specific well to be abandoned. The operating agreement, as amended, further

prohibits us from selecting an alternative operator of the wells unless we are prepared to purchase Allstate’s

interest in each specific well at fair market value. ~~The~~Likewise, ~~surrender~~we ofcannot ~~leases~~sell ~~under~~our ~~the~~interest ~~operating~~in ~~agreement,~~any asof the wells

~~amended,~~unless ~~can~~we ~~only~~first beoffer ~~accomplished~~to insell ~~the~~such ~~event~~interests ~~that~~to ~~both~~Allstate ~~Allied~~on ~~and~~the ~~Allstate~~same ~~consent~~terms toas ~~such~~are ~~surrender.~~proposed for a third party

~~Finally,~~purchaser. weThe ~~cannot~~surrender ~~sell~~of ~~our~~leases ~~interest~~under ~~in any of~~ the ~~wells~~operating ~~unless~~agreement, weas ~~first~~amended, ~~offer~~can toonly ~~sell~~be ~~such~~accomplished ~~interests to Allstate~~in

on the ~~same~~event ~~terms~~that asboth ~~are~~Allied ~~proposed~~and ~~for~~Allstate aconsent ~~third~~to ~~party~~such ~~purchaser~~surrender.

Allstate ~~has~~ established, pursuant to the operating agreement, as amended, an interest bearing escrow account,

~~account,~~ whereby it has withheld up to 25% of the net income on each of our wells up to $5,000, to be used for

~~for~~ capital improvement of the wells or if necessary plugging. The escrow account is currently fully funded to

to the extent provided by the operating agreement.

West Virginia Acquisitions

Allied’s interests in our West Virginia oil and gas properties are the direct result of our relationship with

Allstate. The majority of our West Virginia oil and gas interests, approximately 90 wells, were acquired as

part of the Ashland Properties acquisition. Allstate prepared a bid package that was presented to Ashland

Exploration, Inc., the seller of the wells, for consideration in competition with several other bidders for the

properties. Allstate submitted the bid under the pretext that, should it be successful in its bid, Allied would

participate in a shared interest in the acquisition. Allied’s other interests in wells outside of the Ashland

Properties were the result of agreeing to a percentage interest through Allstate farm out arrangements,

individual well/lease assignments, and drilling agreements spanning the time period from 1981 to 2002. We

were not furnished with any engineering reports prior to purchasing interests in our oil and gas properties.

Texas Well Information

Allied owns varying interests in a total of 10 wells in Texas on four leases held by independent operators.

All the wells in which we have an interest are situated on developed acreage spread over 2,510 acres in

Goliad, Edwards and Jackson Counties. Depth of the producing intervals varies from 7,600 ft to 9,600 ft.

Our working interest is defined as interest in oil and gas that includes responsibility for all drilling,

developing, and operating costs varying from 3.73% to 21%. Our net revenue interest is defined as that

portion of oil and gas production revenue after deduction of royalties, varying from 3.9388% to 12.75%.

The distribution of our interests in Texas oil and gas leases is detailed below:

Texas Oil and Gas Leases

Well Name

% Working

% Net Revenue

Operator

Interest

Harper #2

5.4221

3.9388

Hankey Oil Company

Holman-Fagan 24-1

5.4375

4.2323

Marshall & Winston

Holman-Fagan 24-2

5.4375

4.2323

Marshall & Winston

Holman-Fagan 41-2

5.4375

4.2323

Marshall & Winston

Holman-Fagan 42-1

5.4375

4.2323

Marshall & Winston

Holman-Fagan 42-2

5.4375

4.2323

Marshall & Winston

Holman-Fagan 43-1

5.4375

4.2323

Marshall & Winston

Holman-Fagan 46-1

5.4375

4.2323

Marshall & Winston

Holman-Fagan 46-2

5.4375

4.2323

Marshall & Winston

Williams #1

3.73

2.68

Magnum Producing, LP

Brinkoeter #4

21.00

12.75

Marquee Corporation

Texas Operators

Each of our Texas acquisitions has a different operator. A brief description of the operators is as follows:

§ Hankey Oil Company of Houston, Texas, was founded in 1981. Since inception they focused their

efforts on the Texas Gulf Coast. Hankey utilizes a 3D geophysical workstation technology to develop

their drilling prospects.

§ Magnum Producing, LP of Corpus Christi, Texas, has been operating along South Texas and the Gulf

Coast since the mid-1980s. Magnum has 15 employees and operates approximately 150 wells.

§ Marquee Corporation of Houston, Texas, became involved in the oil and gas business in 1981.

Marquee has 4 full-time employees operating approximately 100 wells. Zinn Petroleum Co. is the

operating arm of the company.

§ Marshall & Winston, Inc. of Midland, Texas, began as a royalty company in 1928. Marshall currently

operates approximately 100 wells in and around the Midland area, and has 14 employees.

Texas Wells

On May 1, 2007, Allied acquired an interest in the Harper #2 well located within the Ramon Musquiz

Survey, A-29, Goliad, Texas from Spanish Moss Energy Company, LLC. The Harper #2 well is operated

by Hankey Oil Company and produces oil and gas from the Wilcox formation.

On August 1, 2007, Allied acquired interests in the ten properties located in Sections 24, 41, 42 and 46 of

the CCSD & RGNG RR Co. Survey, Edwards County, Texas from Rischco Energy, Inc. The acquisition

included an interest in the pipeline gathering system connected to five of the wells. The properties are

operated by Marshall & Winston, Inc. and produces oil and gas from the Frances Hill (Penn Lower) field in

the Canyon Sands formation. The Holman-Fagan 42-1 well was plugged and abandoned in 2012 due to

depletion and production of non-commercial quantities of natural gas.

On October 1, 2007, Allied acquired an interest in the Williams #1 well located within the John Alley

Survey, A-3, Jackson County, Texas from Benchmark Oil and Gas Company. The Williams #1 well is

operated by Magnum Producing, LP and produces oil and gas from the Wilcox formation.

On October 1, 2007, Allied acquired an interest in the Brinkoeter #4 well located within the V. Ramos

Survey, A-241, Goliad County, Texas from Tyner Exploration, Inc. and Clendon B. Caire. The Brinkoeter

#4 well is operated by Marquee Corporation and produces oil and gas from the Massive formation.

Allied’s oil and gas interests combined in West Virginia and in Texas in the aggregate produced on average

~~237~~245 STBO and 87,~~320~~983 MCFG per month in ~~2013~~2014.

Exploration, Development and Operations

~~Allied~~The ~~intends~~recent todramatic ~~continue~~decline toin ~~purchase~~oil ~~non-operated~~prices ~~oil~~has ~~and~~affected ~~gas~~Allied’s ~~producing~~business ~~properties,~~and ~~acquire~~will ~~oil~~continue ~~and~~to ~~gas~~do so should

~~leases~~current ~~that~~prices itremain ~~will~~consistent ~~operate~~or ~~and~~continue ~~implement~~to ~~improved~~decline. ~~production~~Nevertheless, ~~efficiencies~~Allied onintends ~~existing~~to ~~wells.~~continue ~~Our~~to ~~criteria for~~identify

~~purchasing~~non-operated oil and gas producing properties isfor ~~defined~~purchase, byacquire ~~short~~oil ~~term~~and ~~returns~~gas onleases ~~investment,~~that ~~long~~it ~~term~~will operate

~~growth~~and inimplement ~~revenue,~~improved ~~and~~production ~~development~~efficiencies ~~potential,~~on ~~while~~existing ~~our~~wells. Our criteria for ~~acquiring~~purchasing oil and gas ~~leases is~~

~~predicated~~producing onproperties ais ~~proven~~defined ~~record~~by ofshort ~~historical~~term ~~production~~returns ~~and~~on ~~our~~investment, ~~own~~long ~~capacity~~term togrowth ~~operate~~in ~~any~~revenue, ~~given field. The~~and

~~recent~~development ~~increase~~potential, inwhile ~~prices~~our criteria for acquiring oil ~~has~~and ~~decreased~~gas ~~the~~leases ~~number~~is ofpredicated ~~opportunities~~on ~~available~~a toproven usrecord ~~due to our~~of

~~relatively~~historical ~~limited~~production ~~cash~~and ~~position~~our ~~and~~own ~~the~~capacity ~~relatively~~to ~~low~~operate ~~price~~any ~~paid~~given ~~for~~field. ~~natural~~The ~~gas~~decrease ~~continues~~in toprices ~~sway~~for usoil ~~away~~and the

~~from~~continuation ~~prospective~~of low natural gas ~~activity.~~prices Weis doyet ~~however~~to ~~continue~~increase tothe ~~seek~~number ~~out~~of ~~prospective~~opportunities ~~oil~~available ~~producing~~to us due to

~~properties~~our ~~that~~relatively ~~meet~~limited ~~our~~cash ~~acquisition~~position ~~criteria~~and ~~for~~the ageneral ~~price~~belief ~~that~~among isthose ~~consistent~~in ~~with~~the ~~competing~~energy ~~forecasts~~business ~~for~~that ~~energy~~prices

~~prices~~will ~~going~~rebound ~~forward~~in ~~into~~the anear ~~volatile~~term ~~market~~stabilizing at $60-70 per barrel within the next 12 months.

We are further considering future prospects for ~~exploration~~the development of the virtually untapped Marcellus and ~~Utica~~

Utica shale formations that appear to underlie Allied’s oil and gas interests in West Virginia, particularly in ~~Ritchie County.~~

Ritchie County. The Marcellus and Utica shale structures that have formed under much of Pennsylvania, ~~Ohio, New York, West~~

Ohio, New York, West Virginia and adjacent states tohave become a ~~prospectively~~ major reservoir for ~~natural gas recovery. Drilling by~~hydrocarbon

recovery. Drilling by other operators in Ritchie County has indicated successful rates of recovery and our ~~own open hole well~~

own open hole well logs indicate the presence of potentially productive Marcellus shale at a depth of 6,000 ~~feet. However, since~~

~~exploration~~feet ofvarying ~~the~~in ~~Marcellus~~thickness ~~and~~from ~~Utica~~50 ~~shale~~– in60 ~~our~~feet. ~~area~~We ishave ~~relatively~~been ~~recent~~approached noby ~~natural~~active ~~gas~~operators ~~reserves~~in the area to

~~underlying~~conduct ~~our~~potential ~~interests~~joint ~~have~~development ~~been~~of ~~determined.~~this ~~Our~~potential ~~future~~resource ~~plans~~with ~~for~~the ~~exploring~~expectation ~~these~~that ~~shale formations are~~hydrocarbon

~~further~~reserves ~~tempered~~meet by the ~~high~~probable ~~risk/reward~~reserves ~~ratio~~criteria. ofHowever, ~~exploratory~~since ~~drilling~~exploration inof the ~~near~~Marcellus ~~term~~and ~~based~~Utica onshale ~~anticipated~~in

~~pricing~~Ritchie ~~for~~County is relatively recent no oil or natural gas ~~over~~reserves ~~the~~underlying ~~next~~our ~~five~~interests ~~years.~~have yet been

determined. We intend to conduct a probable reserve evaluation this year to value probable reserves.

Nevertheless, our future plans to develop these shale formations continue to be tempered by the high

risk/reward ratio of exploratory drilling in the near term based on anticipated pricing for oil and natural gas

over the next five years.

Competition

The exploration for and development and production of oil and gas is subject to intense competition. The

principal methods of competition in the industry for the acquisition of oil and gas leases are:

§ the payment of cash bonuses at the time of acquisition of leases,

§ delay rentals,

§ location damage supplement payments, and

§ stipulations requiring exploration and production commitments by the lessee.

Companies with greater financial resources, existing staff and labor forces, equipment for exploration, and

experience are in a better position than us to compete for such leases. In addition, our ability to market any

oil and gas which we might produce could be severely limited by our inability to compete with larger

companies operating in the same area, which may be willing or able to offer oil and gas at a lower price.

In addition, the availability of a ready market for oil and gas will depend upon numerous factors beyond our

control, including:

§ the extent of domestic production and imports of oil and gas,

§ proximity and capacity of pipelines,

§ the effect of federal and state regulation of oil and gas sales, and

§ environmental restrictions on exploration and usage of oil and gas prospects that will become even

more intense in the future.

Competition in West Virginia

Allied competes ~~against~~as ~~over~~a ~~500~~small independent ~~companies~~against inover ~~West~~five ~~Virginia,~~hundred ~~many~~other ~~with~~independent ~~greater~~companies ~~financial~~in West

Virginia, many with greater financial resources than those available to us. Operators such as Exxon, Shell ~~Oil, Conoco-Phillips and others~~

Oil, Conoco-Phillips and others considered major players in the oil and gas industry no longer operate any ~~significant interests in West~~

significant interests in West Virginia. However, West Virginia hosts approximately 40 significant ~~independent operators including~~

independent operators including NiSource, Equitable, Energy Corporation of America, Cabot Oil and Gas, ~~and Dominion Appalachian with~~

and Dominion Appalachian with over 450 smaller operations with no single producer dominating the area.

Competition in Texas

Allied competes against thousands of other independent companies and several majors in Texas, many with

greater financial resources than those available to us. Major companies include Occidental Permian, Kinder

Morgan, Apache, Chevron, Conoco-Phillips, and BP America who operate across Texas. While major

companies do not dominate the areas in which we have interests, several of the counties do have significant

producers.

Several significant independent gas producers operate in Edwards County, including Newfield Exploration,

Dominion Oklahoma, and Range Production. Only a few oil producers operate in Edwards County. Our

Edwards County operator, Marshall & Winston, Inc., is one of the largest gas and oil producers in the

county.

Numerous significant independent oil and gas producers operate in Goliad County, including Petrohawk

Operating, Chesapeake Operating, T-C Oil, Ventex Operating, Charro Operating, and KCS Resources.

Several significant gas producers operate in Jackson County, including Tri-C Resources, Cypress E & P,

Jamex, Vintage Petroleum, and Cox & Perkins Exploration. There are several significant oil producers in

Jackson County, including Vintage Petroleum, Hilcorp Energy, Sue-Ann Operating, Premier Natural

Resources, and SE USA Operating.

We believe that our operations can successfully compete with those of independent companies in the near

term by focusing our efforts on minimizing corporate expenses, efficiently developing current lease

interests, acquiring producing oil and gas leases with an upside for future development, cautious

exploration activities based on current interests and a transition to operations for prospective acquisitions.

Otherwise, Allied is a minor actor in the oil and gas industry.

Marketability

The products sold by Allied, natural gas and crude oil, are commodities purchased by many distribution and

retail companies. Crude oil can be easily sold whenever it is produced subject to transportation cost. The

crude oil produced on our behalf is transported by truck from the collection points to the purchaser. Natural

gas on the other hand can be more difficult to sell since transportation from point of production to the

purchaser requires a pipeline. Most of our current gas production interests are transported by pipelines

owned by the purchasers. We own an interest in the pipeline gathering system connected to five of our wells

in Edwards County, Texas.

~~Allstate sells our gas production interest in West Virginia to three main purchasers, Dominion Field~~8

Allstate sells our natural gas production interest in West Virginia to three main purchasers, Dominion Field

Services, and Equitable Resources, and Mountaineer Gas Co. The gas is sold utilizing two different forms

of contracts. One, characterized as a fixed contract that determines a certain price for gas over a fixed period

of time, usually 90 days and a spot price contract, which markets the production to the purchaser willing to

pay the highest price for the production on a month to month basis at prices ranging from $1.00 per MCF

(fixed contract price) to $57.0051 per MCF during the year ended ~~2013~~December 31, 2014. Any gas production not ~~sold according~~

sold according to fixed gas purchase agreements is sold on the spot price market. Allstate has fixed ~~contracts with~~

contracts with Dominion Field Services.

Allstate sells our oil production interest to West Virginia Oil Gathering at the market price on the day of

pick up. Prices for oil production ranged from $~~80.97~~52 per bbl to $~~104~~98.7232 per bbl during the year ended

December 31, ~~2013~~2014.

Our independent Texas operators (Hankey, Marquee, and Magnum) sell our oil production to certain

purchasers including Gulfmark Energy (Hankey), Shell Trading Company (Magnum) and TEPCCO Crude

Oil LP (Marquee) at prices determined by base or spot pricing as a percentage of the oil index price. The

sale prices for Allied’s oil production interests in Texas during ~~2013~~2014 ranged from $91101.6617 per bbl to $~~107~~54.1123

per bbl over the period.

~~Gas~~Natural gas and gas condensate is sold to Houston Energy Services Company LLC (Hankey), BML, Inc., ~~and~~

and Enterprise Products Partners LP (Winston), Acock Operating Limited (Magnum) and dcpMidstream ~~LP at~~

LP at prices determined by the Houston Ship Channel price or spot pricing less pipeline carrying costs and

dehydration fees as applicable. The sale prices for Allied’s gas production in Texas fluctuated between

$23.6408 per MCF and $56.0618 per MCF in ~~2013~~2014.

Governmental Regulation of Exploration and Production

~~Allied’s~~Oil ~~oil~~ and natural gas exploration, production and related operations are subject to extensive rules and

regulations promulgated by federal and state agencies. Operations, which sometimes occur on public lands,

may be subject to regulation by, among other state and federal agencies, the Bureau of Land Management,

the U.S. Army Corps of Engineers or the U.S. Forest Service. Failure to comply with such rules and

regulations can result in substantial penalties. The regulatory burden on the oil and gas industry increases

our cost of doing business and affects our profitability. ~~Because~~Since such rules and regulations are frequently

amended or interpreted differently by regulatory agencies, we are unable to accurately predict the future

cost or impact on the operators of our oil and gas wells in complying with such laws. or ultimately what cost

~~Allied’s~~or ~~oil~~impact ~~and~~compliance ~~gas~~or ~~exploration~~otherwise ~~and~~will ~~production~~have ~~operations~~on ~~are affected by state and federal regulation of oil~~Allied.

Oil and natural gas exploration and production operations are affected by state and federal regulation of oil

and gas production, federal regulation of gas sold in interstate and intrastate commerce, state and federal

regulations governing environmental quality and pollution control, state limits on allowable rates of

production by a well or pro-ration unit and the amount of oil and gas available for sale, state and federal

regulations governing the availability of adequate pipeline and other transportation and processing

facilities, and state and federal regulation governing the marketing of competitive fuels. For example, a

productive gas well may be “shut-in” because of an over-supply of gas or lack of an available gas pipeline

in the areas in which we may conduct operations. State and federal regulations generally are intended to

prevent waste of oil and gas, protect rights to produce oil and gas between owners in a common reservoir,

control the amount of oil and gas produced by assigning allowable rates of production and control

contamination of the environment. Pipelines are subject to the jurisdiction of various federal, state and local

agencies.

Many state authorities require permits for drilling operations, drilling bonds and reports concerning

operations, and impose other requirements relating to the exploration and production of oil and gas. Such

states also have ordinances, statutes, or regulations addressing conservation matters, including provisions

for the unitization or pooling of oil and gas properties, the regulation of spacing, plugging and abandonment

of such wells, and limitations establishing maximum rates of production from oil and gas wells. ~~Although~~We are

noaware ~~West~~that ~~Virginia~~certain regulations ~~provide~~in ~~such~~West ~~limitations~~Virginia ~~with~~and ~~respect~~Texas todo ~~our~~limit ~~operations~~the ~~certain~~activities ~~limitations~~of ~~are~~those operators

inresponsible ~~place~~for inoperating ~~Texas~~Allied’s oil and gas wells.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements and Labor Contracts

Allied currently operates under and holds no patents, trademarks, licenses, franchises, or concessions.

Allied is not subject to any labor contracts. Each of Allied’s interests are subject to royalty payments.

Environmental Regulation

The recent trend in environmental legislation and regulation has been generally toward stricter standards,

and this trend will likely continue. Allied does not presently anticipate that we will be required to expend

amounts relating to our oil and gas production operations that are material in relation to our total capital

expenditure program by reason of environmental laws and regulations. However, because such laws and

regulations are subject to interpretation by enforcement agencies and are frequently changed by legislative

bodies, Allied is unable to accurately predict the ultimate cost of such compliance for ~~2014~~2015.

~~Allied~~Oil and gas production is subject to numerous laws and regulations governing the discharge of materials ~~into the~~

into the environment or otherwise relating to environmental protection. These laws and regulations may ~~require the~~

require the acquisition of a permit before drilling commences, restrict the types, quantities and ~~concentration of various~~

concentration of various substances that can be released into the environment in connection with drilling ~~and production activities,~~

and production activities, limit or prohibit drilling activities on certain lands lying within wilderness, ~~wetlands, and areas containing~~

wetlands, and areas containing threatened and endangered plant and wildlife species, and impose ~~substantial liabilities for unauthorized~~

substantial liabilities for unauthorized pollution resulting from our operations.

The following environmental laws and regulatory programs appeared to be the most significant to Allied’s

operations in ~~2013~~2014, and are expected to continue to be significant in ~~2014~~2015:

Clean Water and Oil Pollution Regulatory Programs

The Federal Clean Water Act (“CWA”) regulates discharges of pollutants to surface waters. The discharge

of crude oil and petroleum products to surface waters also is precluded by the Oil Pollution Act (“OPA”).

Our operations are inherently subject to accidental spills and releases of crude oil and drilling fluids that

may give rise to liability to governmental entities or private parties under federal, state or local

environmental laws, as well as under common law. Minor spills occur from time to time during the normal

course of Allied’s production operations. Our independent operators maintain spill prevention control and

countermeasure plans (“SPCC plans”) for facilities that store large quantities of crude oil or petroleum

products to prevent the accidental discharge of these potential pollutants to surface waters where

applicable. As of December 31, ~~2013~~2014, we know of no investigative or remedial work required of our

independent operators by governmental agencies to address potential contamination by accidental spills or

discharges of crude oil or drilling fluids.

Clean Air Regulatory Programs

The operations of Allied’s independent operators are subject to the federal Clean Air Act (“CAA”), and

state implementing regulations. Among other things, the CAA requires all major sources of hazardous air

pollutants, as well as major sources of certain other criteria pollutants, to obtain operating permits, and in

some cases, construction permits. The permits must contain applicable Federal and state emission

limitations and standards as well as satisfy other statutory and regulatory requirements. The 1990

Amendments to the CAA also established new monitoring, reporting, and recordkeeping requirements to

provide a reasonable assurance of compliance with emission limitations and standards. Allied’s

independent operators obtain construction and operating permits for their compressor engines, and we are

not presently aware of any potential adverse claims in this regard.

Waste Disposal Regulatory Programs

The operations of Allied’s independent operators generate and result in the transportation and disposal of

large quantities of produced water and other wastes classified by EPA as “non-hazardous solid wastes”. The

EPA is currently considering the adoption of stricter disposal and clean-up standards for non-hazardous

solid wastes under the Resource Conservation and Recovery Act (“RCRA”). In some instances, EPA has

already required the cleanup of certain non-hazardous solid waste reclamation and disposal sites under

standards similar to those typically found only for hazardous waste disposal sites. It also is possible that

wastes that are currently classified as “non-hazardous” by EPA, including some wastes generated during

our drilling and production operations, may in the future be reclassified as “hazardous wastes”. Since

hazardous wastes require much more rigorous and costly treatment, storage, transportation and disposal

requirements, such changes in the interpretation and enforcement of the current waste disposal regulations

would result in significant increases in waste disposal expenditures incurred by Allied.

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”)

CERCLA, also known as the “Superfund” law, imposes liability, without regard to fault or the legality of

the original conduct, on certain classes of persons who are considered to have caused or contributed to the

release or threatened release of a “hazardous substance” into the environment. Persons include the current

or past owner or operator of the disposal site or sites where the release occurred and companies that

transported disposed or arranged for the disposal of the hazardous substances under CERCLA. Persons so

defined may be subject to joint and several liability for the costs of cleaning up the hazardous substances

that have been released into the environment and for damages to natural resources. Allied is not presently

aware of any potential adverse claims in this regard.

West Virginia Division of Environmental Protection Office of Oil and Gas

The State of West Virginia has promulgated certain legislative rules pertaining to exploration, development

and production of oil and gas that are administered by the West Virginia Division of Environmental

Protection Office of Oil and Gas. The rules govern permitting for new drilling, inspection of wells, fiscal

responsibility of operators, bonding wells, the disposal of solid waste, water discharge, spill prevention,

liquid injection, waste disposal wells, schedules that determine the procedures for plugging and

abandonment of wells, reclamation, annual reports and compliance with state and federal environmental

protection laws. Allied believes that all wells in which we have an interest are operated by Allstate in a

manner that is in compliance with these rules.

The Railroad Commission of Texas, Oil and Gas Division

The Railroad Commission of Texas, through its Oil and Gas Division, works to prevent the waste of oil,

gas, and geothermal resources and to prevent the pollution of fresh water from oil and gas operations. The

division issues drilling permits and reviews and approves oil and gas well completions. It also regulates

underground injection of fluids in oil field operations, a program approved by the U.S. Environmental

Protection Agency under the Federal Safe Drinking Water Act. The division further oversees well plugging

operations, site remediation, underground hydrocarbon storage, and hazardous waste management. Allied

believes that all wells in which we have an interest are operated in a manner that is in compliance the

division.

Health and Safety Regulatory Programs

The operations of Allied’s independent operators are subject to regulations promulgated by the

Occupational Safety and Health Administration (“OSHA”) regarding worker and work place safety. We

have been assured that our independent operators currently provide health and safety training and

equipment to their employees and have adopted corporate policies and procedures to comply with OSHA’s

workplace safety standards.

Climate Change Legislation and Greenhouse Gas Regulation

Many studies over the past couple decades have indicated that emissions of certain gases contribute to

warming of the Earth’s atmosphere. In response to these studies, many nations have agreed to limit

emissions of “greenhouse gases” or “GHGs” pursuant to the United Nations Framework Convention on

Climate Change, and the “Kyoto Protocol.” Although the United States elected not to participate in the

Kyoto Protocol, several states have adopted legislation and regulations to reduce emissions of greenhouse

gases. Restrictions on emissions of methane or carbon dioxide that may be imposed in various nations and

states could adversely affect our operations and demand for our products.

The United States Supreme Court has ruled, in Massachusetts, et al. v. EPA, that the EPA abused its

discretion under the Clean Air Act by refusing to regulate carbon dioxide emissions from mobile sources.

As a result of the Supreme Court decision the EPA issued a finding that serves as the foundation under the

Clean Air Act to issue other rules that would result in federal greenhouse gas regulations and emissions

limits under the Clean Air Act, even without Congressional action. As part of this array of new regulations

the EPA also issued a GHG monitoring and reporting rule that requires certain parties, including

participants in the oil and natural gas industry, to monitor and report their GHG emissions, including

methane and carbon dioxide, to the EPA. These regulations may apply to our operations. The EPA has

proposed two other rules that would regulate GHGs, one of which would regulate GHGs from stationary

sources, and may affect sources in the oil and natural gas exploration and production industry and the

pipeline industry. The EPA’s finding, the greenhouse gas reporting rule, and the proposed rules to regulate

the emissions of greenhouse gases would result in federal regulation of carbon dioxide emissions and other

greenhouse gases, and may affect the outcome of other climate change lawsuits pending in United States

federal courts in a manner unfavorable to our industry.

Acts of Congress, particularly such as the “American Clean Energy and Security Act of 2009,” also known

as the “Waxman-Markey cap-and-trade legislation,” approved by the United States House of

Representatives on June 26, 2009, as well as the decisions of lower courts, large numbers of states, and

foreign governments which affect climate change regulation could have a material adverse effect on our

business, financial condition, and results of operations.

Exploration Activities

Allied spent no amounts on exploration activities during either of the last two fiscal years.

Employees

Allied has engaged its chief executive officer, Ruairidh Campbell, and one other support person, on a part

time basis. Mr. Campbell spends approximately 20 hours a week providing services to Allied. Our

independent operators are responsible for conducting oil and gas operations tied to our interests.

Management uses oil and gas consultants, attorneys, and accountants as necessary and does not plan to

engage any full-time employees in the near future.

Reports to Security Holders

Allied’s annual report contains audited financial statements. We are not required to deliver an annual report

to security holders and will not automatically deliver a copy of the annual report to our security holders

unless a request is made for such delivery. We file all of our required reports and other information with the

Securities and Exchange Commission (the “Commission”). The public may read and copy any materials

that are filed by Allied with the Commission at the Commission’s Public Reference Room at 100 F Street,

N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference

Room by calling the Commission at 1-800-SEC-0330. The statements and forms filed by us with the

Commission have also been filed electronically and are available for viewing or copy on the Commission

maintained Internet site that contains reports, proxy and information statements, and other information

regarding issuers that file electronically with the Commission. The Internet address for this site can be

found at http://www.sec.gov.

ITEM 1A.

RISK FACTORS

Allied’s operations and securities are subject to a number of risks. Below we have identified and discussed

the material risks that we are likely to face. Should any of the following risks occur, they will adversely

affect our operations, business, financial condition and/or operating results as well as the future trading

price and/or the value of our securities.

Risks Related to Allied’s Business

We have a history of significant operating losses and realized a loss in the current period.

Since our inception in 1979, our expenses have often exceeded our income, resulting in losses and an

accumulated deficit of $7,~~345~~367,~~867~~366 at December 31, ~~2013~~2014. Over the twelve month period ended December

31, ~~2013~~2014, we recorded a net loss of $1321,~~422~~499 from operations and could continue to realize net losses due to

~~lower~~the ~~natural~~dramatic ~~gas~~decline in oil prices, over the ~~constant~~last ~~depletion~~half of ~~oil~~2014 and ~~gas~~the ~~resources,~~continuation ~~extraordinary~~of ~~production~~weakness ~~expenses~~in natural gas

~~and~~prices, the ~~vagaries~~depletion of ~~price~~oil ~~volatility~~and gas resources, and production expenses. Future profitability will depend on ~~our ability to increase production~~

~~through~~a ~~exploration,~~rise ~~development~~in orenergy ~~acquisition.~~prices ~~Allied’s~~combined ~~success~~with inour ~~returning~~ability to ~~profitability~~increase ~~can~~production inthrough noexploration, ~~way~~development

or acquisition. Allied’s success in returning to profitability can in no way be assured.

Oil and natural gas prices are volatile. Any substantial decrease in prices would adversely affect our

financial results.

Allied’s future financial condition, results of operations and the carrying value of our oil and natural gas

properties depend primarily upon the prices we receive for oil and natural gas production. Oil and natural

gas prices historically have been volatile and are likely to continue to be volatile in the future. Allied’s cash

flow from operations is highly dependent on the prices we receive for oil and natural gas. This price

volatility also affects the amount of Allied’s cash flow available for capital expenditures and our ability to

borrow money or raise additional capital. The prices for oil and natural gas are subject to a variety of

additional factors that are beyond our control. These factors include:

§ the level of consumer demand for oil and natural gas;

§ the domestic and foreign supply of oil and natural gas;

§ the ~~ability~~price of ~~the~~oil ~~members~~and ofnatural ~~the Organization of Petroleum Exporting Countries to agree to and~~gas;

maintain oil price and production controls;

§ the price of foreign oil and natural gas;

§ domestic governmental regulations and taxes;

§ the price and availability of alternative fuel sources;

§ weather conditions;

§ market uncertainty; and

§ political conditions or hostilities in energy producing regions; and

§ worldwide economic conditions.

These factors and the volatility of the energy markets generally make it extremely difficult to predict future

oil and natural gas price movements with any certainty. Declines in oil and natural gas prices ~~would~~will not only

~~only~~ reduce revenue, ~~but~~and could ~~reduce~~affect the amount of oil and natural gas that Allied can produce economically.

economically and, as a result, could have a material adverse effect on our financial condition, results of

operations and reserves. Should the oil and natural gas industry experience significant price declines, Allied

may, among other things, be unable to meet our financial obligations or make planned expenditures.

Allied’s future performance depends on its ability to find or acquire additional oil or natural gas

reserves.

Unless Allied successfully replaces the reserves that it produces, defined reserves will decline, resulting in

a decrease in oil and natural gas production, that will produce lower revenues, in turn decreasing cash flows

from operations. Allied has historically obtained the majority of its reserves through acquisition. The

business of exploring for, developing or acquiring reserves is capital intensive. Allied may not be able to

obtain the necessary capital to acquire additional oil or natural gas reserves if cash flows from operations

are reduced, and access to external sources of capital is unavailable. Should Allied not make significant

capital expenditures to increase reserves it will not be able to maintain current production rates and

expenses will overtake revenue.

Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in

increased operating costs and reduced demand for the oil and natural gas that we produce.

On December 15, 2009, the U.S. Environmental Protection Agency (“EPA”) officially published its

findings that emissions of carbon dioxide, methane and other “greenhouse gases” present an endangerment

to human health and the environment because emissions of such gases are contributing to warming of the

Earth’s atmosphere and other climatic changes. These findings by the EPA allow the agency to proceed

with the adoption and implementation of regulations that would restrict emissions of greenhouse gases

under existing provisions of the federal Clean Air Act. In late September 2009, the EPA had proposed two

sets of regulations in anticipation of finalizing its findings that would require a reduction in emissions of

greenhouse gases from motor vehicles and that could also lead to the imposition of greenhouse gas emission

limitations in Clean Air Act permits for certain stationary sources. In addition, on September 22, 2009, the

EPA issued a final rule requiring the reporting of greenhouse gas emissions from specified large

greenhouse gas emission sources in the United States beginning in 2011 for emissions occurring in 2010.

The adoption and implementation of any regulations over greenhouse gases could require us to incur costs

to reduce emissions of greenhouse gases associated with our operations or could adversely affect demand

for the oil and natural gas that we produce.

On June 26, 2009, the U.S. House of Representatives passed the “American Clean Energy and Security Act

of 2009,” or “ACESA,” which would establish an economy-wide cap-and-trade program to reduce U.S.

emissions of greenhouse gases including carbon dioxide and methane. ACESA would require a 17%

reduction in greenhouse gas emissions from 2005 levels by 2020 and just over an 80% reduction of such

emissions by 2050. Under this legislation, the EPA would issue a capped and steadily declining number of

tradable emissions allowances to certain major sources of greenhouse gas emissions so that such sources

could continue to emit greenhouse gases into the atmosphere. These allowances would be expected to

escalate significantly in cost over time. The net effect of ACESA will be to impose increasing costs on the

combustion of carbon-based fuels such as oil, refined petroleum products, and natural gas. The U.S. Senate

has begun work on its own legislation for restricting domestic greenhouse gas emissions and the President

Obama Administration has indicated its support of legislation to reduce greenhouse gas emissions through

an emission allowance system. Although it is not possible at this time to predict when the Senate may act on

climate change legislation or how any bill passed by the Senate would be reconciled with ACESA, any

future federal laws or implementing regulations that may be adopted to address greenhouse gas emissions

could adversely affect demand for the oil and natural gas that we produce.

The results of our operations are wholly dependent on the production and maintenance efforts of

independent operators.

The operation and maintenance of our oil and natural gas operations is wholly dependent on independent

local operators. While the services provided by operators of our properties in the past have proven adequate

for the successful operation of our oil and natural gas wells, the fact that we are dependent on operations of

third parties to produce revenue from our assets could restrict our ability to continue generating a net profit

on operations.

Risks Related to Allied’s Stock

The market for our stock is limited and our stock price may be volatile.

The market for our common stock is limited due to low trading volumes and the small number of brokerage

firms acting as market makers. The average daily trading volume for our stock has varied significantly from

week to week and from month to month, and the trading volume often varies widely from day to day. Due to

these limitations there is volatility in the market price and tradability of our stock, which may cause our

shareholders difficulty in selling their shares in the market place.

Our internal controls over financial reporting may not be considered effective in the future, which could

result in a loss of investor confidence in our financial reports and in turn have an adverse effect on our

stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our

management on our internal controls over financial reporting. Such report must contain, among other

matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of

the year, including a statement as to whether or not our internal controls over financial reporting are

effective. This assessment must include disclosure of any material weaknesses in our internal controls over

financial reporting identified by management. If we are unable to continue to assert that our internal

controls are effective, our shareholders could lose confidence in the accuracy and completeness of our

financial reports, which in turn could cause our stock price to decline.

Allied has not paid dividends to the shareholders of its common stock.

Allied has not paid any dividends to the shareholders of its common stock and has no intention of paying

dividends in the foreseeable future. Any future dividends would be at the discretion of our board of

directors and would depend on, among other things, future earnings, our operating and financial condition,

our capital requirements, and general business conditions.

Allied may require additional capital funding.

Allied may require additional funds, either through additional equity offerings or debt placements, in order

to expand our operations. Such additional capital may result in dilution to our current shareholders.

Further, our ability to meet short-term and long-term financial commitments will depend on future cash.

There can be no assurance that future income will generate sufficient funds to enable us to meet our

financial commitments.

If the market price of our common stock declines as the selling security holders sell their stock, selling

security holders or others may be encouraged to engage in short selling, depressing the market price.

The significant downward pressure on the price of the common stock as the selling security holders sell

material amounts of common stock could encourage short sales by the selling security holders or others.

Short selling is the selling of a security that the seller does not own, or any sale that is completed by the

delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at

a lower amount than the price at which they sold it short. Significant short selling of a company’s stock

creates an incentive for market participants to reduce the value of that company’s common stock. If a

significant market for short selling our common stock develops, the market price of our common stock

could be significantly depressed.

Allied’s shareholders may face significant restrictions on their stock.

Our common stock is subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act.

The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock

Market or other national securities exchange and trades at less than $5.00 per share or that have tangible net

worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years).

These rules require, among other things, that brokers who trade penny stock to persons other than

“established customers” complete certain documentation, make suitability inquiries of investors and

provide investors with certain information concerning trading in the security, including a risk disclosure

document and quote information under certain circumstances. Many brokers have decided not to trade

penny stocks because of the requirements of the penny stock rules and, as a result, the number of

broker-dealers willing to act as market makers in such securities is limited. IfSince ~~Allied~~our ~~remains~~securities ~~subject~~are ~~to the~~subject

to the penny stock rules, ~~for~~Allied’s ~~any~~shareholders ~~significant~~will ~~period,~~find it ~~could~~more ~~have~~difficult anto ~~adverse~~dispose ~~effect~~of onits ~~the market, if any, for our~~securities.

securities. If our securities are subject to the penny stock rules, investors will find it more difficult to

dispose of Allied’s securities.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Ritchie and Calhoun Counties, West Virginia

Allied currently realizes production in West Virginia from a total of 145 oil and gas wells with working

interests ranging from 18.75% to 75%, producing a combination of varying amounts of oil and gas.

Goliad, Edwards and Jackson Counties, Texas

Allied currently realizes production in Texas from a total of 10 oil and gas wells with working interests

ranging from 3.73% to 21% and net revenue interests varying from 2.68% to 12.75%, after deduction of

royalties, on four leases.

Annual Oil and Gas Production – West Virginia &Texas

2014

2013

2012

2011

Natural Gas

95,799MCF

99,844 MCF

105,923 MCF

101,147 MCF

Oil

2,945 STB

2,839 STB

3,061 STB

2,229 STB

Average production costs (VW)*

$2.5526/MCFE

$2.2255 /MCFE

$2.4622 / MCFE

Average production costs (TX)*

$12.8103/MCFE

$21.7881 /MCFE

$2.5578 / MCFE

* includes lifting costs, maintenance costs, and severance taxes

Productive Wells and Acreage

Ritchie and Calhoun Counties, West Virginia

Allied owns 145 gross wells and 101 net wells in West Virginia as of December 31, ~~2013~~2014. The wells are

located on 3,400 gross acres and approximately 2,377 net acres. Allied has no plans at this time to purchase

or drill additional wells in West Virginia.

Goliad, Edwards and Jackson Counties, Texas

Allied owns 10 gross wells and 0.83 net wells in Texas as of December 31, ~~2013~~2014. The wells are located on

2,510 gross acres and approximately 206.45 net acres. Allied has no plans at this time to purchase or drill

additional wells in Texas.

Drilling Activity

Allied has drilled no productive or dry exploratory or developmental wells in the last three fiscal years.

Present Activities

Allied is not in the process of drilling wells, installing waterfloods, performing pressure maintenance

operations, or performing any other related operations of material importance as of the date of this current

report on 10-K.

Delivery Commitments

Allied is not obligated to provide a fixed and determinable quantity of oil or gas in the near future under

existing contracts or agreements though its independent operators do have agreements for the delivery of

fixed and determinable quantities of natural gas products.

Undeveloped Acreage

All acreage on which Allied maintains an interest in oil and gas wells is to be considered developed acreage.

Undeveloped acreage is considered to be those lease acres on which wells have not been drilled or

completed to a point that would permit the production of commercial quantities of oil and gas regardless of

whether or not such acreage contains proved reserves. Undeveloped acreage should not be confused with

undrilled acreage held by production under the terms of a lease.

Oil and Gas Reserves

Oil and gas reserves for our properties have been evaluated as of December 31, ~~2013~~2014 and ~~2012~~2013 by Sure

Engineering LLC. Sure Engineering LLC. was founded in 1997 by Dr. Nafi Onat to provide a variety of

~~Sure~~engineering ~~Engineering~~services ~~LLC.~~to ~~was~~the ~~founded~~oil inand ~~1997~~gas byindustry ~~Dr.~~including ~~Nafi~~the ~~Onat~~design toof ~~provide~~well acompletions ~~variety~~and ~~of engineering services~~optimizations,

to the ~~oil~~preparation ~~and~~of ~~gas~~reserve ~~industry~~evaluations, ~~including~~secondary ~~the~~recovery ~~design~~plans, of well ~~completions~~testing and ~~optimizations,~~interpretation. ~~the~~Dr. ~~preparation of~~Onat

~~reserve~~obtained ~~evaluations,~~a ~~secondary~~Bachelor ~~recovery~~of ~~plans,~~Science ~~well~~and ~~testing~~Master ~~and~~of ~~interpretation.~~Science ~~Dr.~~Degrees ~~Onat~~in ~~obtained~~Petroleum aEngineering ~~Bachelor~~from the Middle

ofEast ~~Science~~Technical ~~and~~University ~~Master~~in ofAnkara, ~~Science~~Turkey ~~Degrees~~and a Doctorate (PhD) in Petroleum Engineering from the ~~Middle East Technical~~

~~University~~Colorado School of Mines in ~~Ankara~~Golden, ~~Turkey~~Colorado. ~~and~~Since aobtaining ~~Doctorate~~his (PhD), inDr. ~~Petroleum~~Onat ~~Engineering~~has ~~from~~worked ~~the~~within ~~Colorado School~~the

ofoil ~~Mines~~and ingas ~~Golden,~~industry ~~Colorado.~~for ~~Since~~over ~~obtaining~~thirty ~~his PhD, Dr~~years. ~~Onat has worked within the oil and gas~~

industry for over thirty years.

Dr. H. I. Bilgesu, who works as a consulting engineer for Sure Engineering, LLC has over 16 years

experience in oil and gas property evaluation. Dr. Bilgesu obtained a B.Sc. in Petroleum Engineering from

Middle East Technical University, a M.Sc. in Chemical and Petroleum Engineering from Colorado School

of Mines and a Ph.D. in Petroleum Engineering from Pennsylvania State University. Dr. Bilgesu is a

Registered Professional Engineer in the State of Colorado.

All information provided by Allied to Sure Engineering LLC for the purpose of preparing its reserve

evaluation was received from those independent operators responsible for managing Allied’s oil and gas

interests. Information received was first reviewed by management for reasonableness and accuracy, to the

extent that such review was practicable having been obtained from third parties, to ensure that such

information might be relied upon by Dr. Onat in compiling his reserve calculations. Reserve calculations by

~~Reserve calculations by~~ independent petroleum engineers involve the estimation of future net recoverable reserves of oil and gas

~~reserves of oil~~ and ~~gas and~~ the timing and amount of future net revenues to be received therefrom. Those estimates are based on

~~estimates are based on~~ numerous factors, many of which are variable and uncertain. Reserve estimators are required to make

~~required to make~~ numerous judgments based upon professional training, experience, and educational background. The

~~background. The~~ extent and significance of the judgments in them are sufficient to render reserve estimates inherently

~~inherently~~ imprecise. Since reserve determinations involve estimates of future events, actual production, revenues

~~revenues~~ and operating expenses may not occur as estimated. Accordingly, it is common for the actual production

~~production~~ and revenues later received to vary from earlier estimates. Estimates made in the first few years of

of production from a property are generally not as reliable as later estimates based on a longer production

history. Reserve estimates based upon volumetric analysis are inherently less reliable than those based on

lengthy production history. Also, potentially productive gas wells may not generate revenue immediately

due to lack of pipeline connections and potential development wells may have to be abandoned due to

unsuccessful completion techniques. Hence, reserve estimates may vary from year to year.

Oil reserves show a decrease of 1,~~123~~973 BO from that reported as of December 31, ~~2012~~2013 and natural gas

reserves show ana ~~increase~~decrease of ~~412~~52,~~085~~005 MCF over that reported as of December 31, ~~2012~~2013. The reason for the

decrease in oil and natural gas reserves can be attributed to ~~production~~depletion and ~~depletion~~the ofdramatic ~~the~~decrease ~~Texas~~in oil ~~wells, and the increase~~prices

in ~~natural~~tandem ~~gas~~with ~~reserves~~continued isweakness ~~probably~~in ~~due~~natural togas ~~the~~prices, ~~lower~~which ~~operating~~attributes ~~costs~~collectively ~~that~~ have ~~extended~~decreased the ~~producing lives of~~

~~marginal~~producing ~~gas~~lives ~~wells~~of inmarginal ~~West Virginia due to limited oil production associated with workover operations~~wells.

The following table set forth the estimated proved developed oil and gas reserves and proved undeveloped

oil and gas reserves of our properties for the years ended December 31, ~~2013~~2014 and ~~2012~~2013.

Reserve Quantity Information (Unaudited)

The estimated quantities of proved oil and gas reserves disclosed in the table below are based on appraisal

of the proved developed properties by Sure Engineering, LLC. Such estimates are inherently imprecise and

may be subject to substantial revisions. All quantities shown in the table are proved developed reserves and

are located within the United States.

Proved Developed Reserves

Years Ended December 31,

2014

2013

2012

Oil (bbls)

Gas (mcf)

Oil (bbls)

Gas (mcf)

Proved developed and undeveloped reserves:

Beginning of year

26,434 1,438,888

27,557 1,017,803

23,931

829,179

Revision in previous estimates

972

43,794

1,716

520,929

6,687

294,547

Discoveries and extension

Purchase in place

Production

(2,945)

(95,799)

(2,839)

(99,844)

(3,061)

(105,923)

Sales in place

_____-

______-

End of year

24,461 1,386,883

26,434 1,438,888

27,557

1,017,803

* all of Allied’s reserves are proved developed reserves.

Oil and Gas Titles

As is customary in the oil and gas industry, we perform only a perfunctory title examination at the time of

acquisition of undeveloped properties. Prior to the commencement of drilling, in most cases, and in any

event where we are the operator, a title examination is conducted and significant defects remedied before

proceeding with operations. We believe that the title to our properties is generally acceptable to a

reasonably prudent operator in the oil and gas industry. The properties owned by us are subject to royalty,

overriding royalty, and other interests customary in the industry, liens incidental to operating agreements,

current taxes and other burdens, minor encumbrances, easements, and restrictions. We do not believe that

any of these burdens materially detract from the value of the properties or will materially interfere with their

use in the operation of our business.

Office Facilities

Allied maintains office space owned by Ruairidh Campbell, Allied’s chief executive officer, for which

Allied pays $1,000 per month on a month to month basis. This address is 1403 East 900 South, Salt Lake

City, Utah 84105 and the phone number is (801) 582-9609. Allied believes that its current office space will

be adequate for the foreseeable future.

ITEM 3.

LEGAL PROCEEDINGS

Allied is currently not a party to any legal proceedings.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

2019

PART II

ITEM 5.

MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS,

AND ISSUER PURCHASES OF EQUITY SECURITIES

Allied’s common stock is quoted on the Over the Counter Bulletin Board, a service maintained by the

Financial Industry Regulatory Authority, under the symbol “ALOD.” Trading in the common stock

over-the-counter market has been limited and sporadic and the quotations set forth below are not

necessarily indicative of actual market conditions. These prices reflect inter-dealer prices without retail

mark-up, mark-down, or commission, and may not necessarily reflect actual transactions. The high and low

bid prices for the common stock for each quarter of the years ended December 31, ~~2013~~2014 and ~~2012~~2013 are as

follows:

Trading Market

Year

Quarter Ending

High

Low

2014

December 31

$0.40

$0.15

September 30

$0.39

$0.30

June 30

$0.35

March 31

$0.38

$0.30

2013

December 31

$0.40

$0.26

September 30

$0.40

$0.32

June 30

$0.40

$0.25

March 31

$0.45

$0.32

2012

December 31

$0.45

$0.20

September 30

$0.20

June 30

$0.38

$0.20

March 31

$0.50

$0.35

Capital Stock

The following is a summary of the material terms of Allied’s capital stock. This summary is subject to and

qualified by our articles of incorporation and bylaws.

Common Stock

As of December 31, ~~2013~~2014, there were 108 shareholders of record holding a total of 5,653,011 shares of fully

paid and non-assessable common stock of the 50,000,000 shares of common stock, par value $0.001,

authorized. The board of directors believes that the number of beneficial owners is substantially greater

than the number of record holders because a portion of our outstanding common stock is held in broker

“street names” for the benefit of individual investors. The holders of the common stock are entitled to one

vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common

stock have no preemptive rights and no right to convert their common stock into any other securities. There

are no redemption or sinking fund provisions applicable to the common stock.

Warrants

As of December 31, ~~2013~~2014, Allied had no outstanding warrants to purchase shares of our common stock.

Dividends

Allied has not declared any cash dividends since inception and does not anticipate paying any dividends in

the foreseeable future. The payment of dividends is within the discretion of the board of directors and will

depend on Allied’s earnings, capital requirements, financial condition, and other relevant factors. There are

no restrictions that currently limit the Allied’s ability to pay dividends on its common stock other than those

generally imposed by applicable state law.

Stock Options

Allied has granted 600,000 options to purchase shares of our common stock at an exercise price of $0.35 per

share pursuant to The Allied Resources, Inc. 2008 Stock Option Plan. Options outstanding vest over five

years from the date of grant and may be exercised within ten years. Allied had vested 600,000 options to

purchase shares of our common stock at year end December 31, ~~2013~~2014.

Transfer Agent and Registrar

Our transfer agent is Standard Registrar & Transfer located at 12528 South 1840 East Draper, Utah, 84020;

their telephone number is (801) 571-8844.

Purchases of Equity Securities made by the Issuer and Affiliated Purchasers

None.

Recent Sales of Unregistered Securities

None.

ITEM 6.

SELECTED FINANCIAL DATA

Not required.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other

parts of this current report contain forward-looking statements that involve risks and uncertainties.

Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,”

“plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future

performance and our actual results may differ significantly from the results discussed in the

forward-looking statements. Factors that might cause such differences include but are not limited to those

discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future

Results and Financial Condition below. The following discussion should be read in conjunction with our

financial statements and notes thereto included in this current report. Our fiscal year end is December 31.

2221

Discussion and Analysis

Allied intends to utilize available cash to acquire additional oil and gas producing properties and to

implement improved production practices on existing wells to increase production and expand reserves

where practicable. Allied believes that it can achieve production growth while expanding reserves through

improved exploitation of its existing inventory of wells by disposing of non-productive wells and

enhancing producing wells. An evaluation for this objective of our existing portfolio of oil and gas

properties is constantly under consideration. Allied also intends to continue to expand non-operated and

explore opportunities for operated acquisitions of additional oil or gas producing properties.

Recovery from producing wells is consistently evaluated to consider cost-efficient work-over methods

designed to improve the performance of the wells. When considering the drilling of new wells, we conduct

a geological review of the prospective area, in cooperation with our independent operator, to determine the

potential for oil and gas. Our own consultants then review available geophysical data (generally seismic and

gravity data) opine as to the prospect for success. In the event that our evaluation of available geophysical

data indicates that the target has significant accumulations of oil and gas, we then consider the economic

feasibility of drilling. The presence of oil and gas for any specific target cannot guarantee economic

recovery. Production depends on many factors including drilling and completion costs, the distance to

pipelines and pipeline pressure, current energy prices, accessibility to the site, and whether the project is

developmental or solely a wildcat prospect.

Allied’s business development strategy is prone to significant risks and uncertainties certain of which can

have an immediate impact on its efforts to realize positive net cash flow and deter future prospects of

production growth. Historically Allied has not been able to generate sufficient cash flow from operations to

sustain operations and fund necessary exploration or development costs. Therefore, there can be no

assurance that the wells currently producing will provide sufficient cash flows to ~~continue~~sustain tooperations. ~~sustain~~Should

~~operations. Should~~ Allied be unable to ~~continue to~~ generate sufficient cash flow from existing properties, it may have to sell certain

~~may have to sell certain~~ properties or interests in such properties or seek financing through alternative sources such as the sale of its

~~sources such as the sale of its~~ common stock.

Allied’s financial condition, results of operations and the carrying value of its oil and natural gas properties

depends primarily upon the prices it receives for oil and natural gas production and the quantity of that

production. Oil and natural gas prices historically have been volatile and ~~are~~in ~~likely~~the tolast ~~continue~~six tomonths beof ~~volatile~~2014 the

inprice ~~the~~paid ~~future.~~for ~~This~~oil ~~price~~plummeted ~~volatility~~due ~~can~~to ~~immediately~~supply ~~affect~~and ~~Allied’s~~geopolitical ~~available~~reasons. This ~~cash~~price ~~flow~~volatility ~~which~~has ~~can~~had ~~in turn~~an

~~impact~~immediate ~~the~~effect ~~availability~~on ofAllied’s ~~net~~available cash flow ~~for~~which ~~future~~has ~~capital~~impacted ~~expenditures.~~the Aamount ~~drop~~of incash ~~oil~~available ~~and natural gas prices~~for

~~could~~future ~~also~~capital ~~incur~~expenditures. aA ~~write~~continued ~~down~~drop ofin ~~the~~oil ~~carrying~~and ~~value~~natural ofgas ~~our~~prices ~~properties~~could asalso ~~can~~incur a ~~decrease~~write indown ~~production.~~of

~~Allied’s~~the ~~future~~carrying ~~success~~value ~~will~~of ~~depend~~our onproperties ~~the~~as ~~level~~can ofa ~~oil~~further ~~and~~decrease ~~natural~~in ~~gas~~production. ~~prices~~Since ~~and~~production ~~the~~leads ~~quantity~~to ~~of its~~the

~~production. Since production leads to the~~ depletion of oil and gas reserves, Allied’s ability to develop or acquire additional economically recoverable

~~acquire additional economically recoverable~~ oil and gas reserves is vital to its future success. Unless Allied can obtain additional reserves, current

~~can obtain additional reserves, current~~ production will continue to decline~~, which will lead to further~~.

reductions in revenue.

Results of Operations

During the period from January 1, ~~2013~~2014 through December 31, ~~2013~~2014, Allied was engaged in evaluating

acquisition opportunities, examining the operating efficiencies of existing wells, overseeing the operation

of its oil and gas assets by independent operators and seeking to acquire oil and gas producing assets. The

operation and maintenance of Allied’s oil and gas operations is wholly dependent on the services provided

by five different independent operators. While the services provided by these operators have proven

adequate, the fact that Allied is dependent on the operations of third parties to maintain its operations and

produce revenue does negatively impact its own ability to realize a net profit.

2322

For the fiscal year ended December 31, ~~2013~~2014, Allied realized a net loss. Allied believes that the immediate

key to its ability to return to profitability is that oil ~~prices~~and ~~maintain~~natural ~~current~~gas ~~pricing~~prices increase and ~~that~~recover ~~gas~~from ~~prices~~what

~~continue to recover from what~~ has been a steep decline. ~~Meanwhile,~~in ~~general~~oil prices and ~~administrative~~continued weakness in natural gas prices . General and

administrative and production expenses are constantly evaluated to guard against increases while we ~~continue to seek out~~

continue to seek out revenue producing acquisitions. Should we be able to ~~procure~~increase ~~additional~~production ~~revenue~~or ~~producing oil properties~~energy

~~and gas~~ prices rise, Allied ~~believes~~expects ~~that~~to ~~it can~~ return to operating with a net profit in future periods.

Twelve Months Ended December 31

2014

2013

2012

Change

Average Daily Production

Oil (bbls/day)

Natural gas (mcf/day)

262

274

~~289~~(12)

~~(15)~~-4%

-5%

Barrels of oil equivalent (boe/day)

(2)

-4%

Profitability

Petroleum and natural gas revenue

548,099 $

612,759 $

~~521~~(64,~~271 $~~660)

~~91,488~~-11%

18%

Net Revenue

548,099

612,759

~~521~~(64,~~271~~660)

~~91,488~~-11%

18%

Production and operating costs

352,775

356,304

~~341~~(3,~~250~~529)

~~15,054~~-1%

Field netback

195,324

256,455

~~180~~(61,~~021~~131)

~~76,434~~-24%

42%

G&A

206,032

220,121

~~234~~(14,~~884~~089)

(14,763)

-6%

Net cash flow from operations

(10,078)

36,334

(5447,~~863~~042)

~~91,197~~-129%

166%

Depletion, depreciation and other charges

50,524

53,067

82(2,~~117~~543)

~~(29,050)~~-5%

-35%

Future income taxes

Net earnings from operations

(61,232) $

(16,733) $

(~~136~~44,~~980~~499) $

~~120,247~~-266%

88%

Profitability per boe

Oil and gas revenue (average selling price)

29.06

31.28

25(2.3622)

~~5.92~~-7%

23%

Production and operating costs

18.71

18.19

160.6052

~~1.59~~3%

10%

Field netback ($/boe)

10.36 $

13.09 $

8(2.~~76 $~~73)

~~4.33~~-21%

50%

Net earnings ($/boe)

(3.25) $

(0.85) $

(62.6640) $

~~5.81~~-280%

87%

Cash flow from operations ($/boe)

(0.57) $

1.85 $

(2.6742) $

~~4.52~~-131%

~~170%~~23

Gross Revenue

Gross revenue for the year ended December 31, ~~2013~~2014, ~~increased~~decreased to $~~612~~585,~~759~~599 from $~~521~~612,~~271~~759 for the year

ended December 31, ~~2012~~2013, ana ~~increase~~decrease of 184%. The ~~increase~~decrease in gross revenue in the current period can be

attributed to the ~~increase~~dramatic decrease in oil ~~and natural gas~~ prices ~~over~~in the ~~comparative~~second ~~periods~~half ~~despite~~of the ~~decline~~annual inperiod ~~oil~~and the continued

~~and~~weakness of natural gas prices over the comparative periods, the decline in natural gas production. was

~~Gross~~offset ~~daily~~by ~~production~~other ofrevenue ~~oil~~associated ~~for~~with ~~the~~an ~~year~~option ~~ended~~agreement ~~December~~that ~~31,~~the ~~2013~~optionee ~~remained~~declined ~~consistent~~to ~~at 8 bbls with the~~exercise.

~~year ended December 31, 2012.~~ Gross daily production of ~~gas~~oil for the year ended December 31, ~~2013~~2014, remained consistent at 8 bbls with the

~~decreased~~year toended ~~274~~December ~~MCF~~31, ~~from~~2013. ~~289~~Gross ~~MCF~~daily production of gas for the year ended December 31, ~~2012~~2014, ~~a decrease of 5%. Average~~

~~oil~~decreased ~~and~~to ~~natural~~262 ~~gas~~MCF ~~prices~~from ~~realized~~274 ~~increased~~MCF onfor athe ~~daily~~year ~~basis~~ended toDecember $31~~.28~~, ~~per~~2013, ~~BOE~~a ~~over~~decrease ~~the~~of ~~year~~4%. ~~ended~~Average

~~December~~oil ~~31,~~and ~~2013,~~natural ~~from~~gas prices declined to $2529.3606 per BOE on a daily basis over the year ended December 31, ~~2012, an~~

~~increase~~2014, from $31.28 per BOE on a daily basis over the year ended December 31, 2013, a decrease of 237%.

Allied anticipates, based on existing ~~properties~~production, that gross revenue will ~~continue~~increase toin ~~increase~~ the event energy prices

return to the same level as ~~natural~~those ~~gas~~realized ~~prices~~in ~~continue~~the anfirst ~~upward~~half ~~trend.~~of 2014 even in the face of continued weakness in

natural gas prices .

Net Loss

Net loss after provision for income taxes for the year ended December 31, ~~2013~~2014 was $1321,~~422~~499 as compared

to net losses after provision for income taxes of $~~127~~13,~~674~~422 for the year ended December 31, ~~2012~~2013. The

~~decrease~~increase in net loss in the current period can be primarily attributed to the ~~increase~~decrease in gross revenues. Allied

expects to transition to net profit on ~~the~~realizing ~~procurement~~an ofincrease ~~additional~~in ~~oil~~gross ~~producing properties and~~revenue.

comparatively higher prices for natural gas products.

Operating Expenses

Production costs for the year ended December 31, ~~2013~~2014 and December 31, ~~2012~~2013, were $~~356~~352,~~304~~775 and

$~~341~~356,~~250~~304, ana ~~increase~~decrease of 41%. Production costs include the cost of maintaining the wells, severance taxes,

miscellaneous expenses for soap, solvent, gasoline or electricity and expenses such as those incurred in

swabbing, dozer work or rig time. The ~~increase~~decrease in production costs over the current period can be attributed

to ~~the~~operating ~~higher costs associated with maintaining existing wells~~efficiencies. Allied expects that production costs will rise as the cost of energy production from

~~continue~~aging towells ~~increase as the cost of production~~ increases ~~from~~over ~~aging wells~~time.

General and administrative expenses for the year ended December 31, ~~2013~~2014, decreased to $~~220~~206,~~121~~032 from

$~~234~~220,~~884~~121 for the year ended December 31, ~~2012~~2013, a decrease of 6%. The decrease in general and

administrative costs can be attributed to operating efficiencies. Allied anticipates that general and

administrative expenses will ~~continue to~~ be relatively consistent over future periods.

Depletion expenses for the year ended December 31, ~~2013~~2014 and December 31, ~~2012~~2013 were $5350,~~067~~524 and

$8253,~~117~~067 respectively. Depletion expenses will continue to decline in relation to the aging of existing oil and

gas assets.

Income Tax Expense

As of December 31, ~~2013~~2014, Allied has a net operating loss (NOL) carry forwards of approximately

$2,~~155~~143,000. Should substantial changes in our ownership occur there would be an annual limitation of the

amount of NOL carry forward which could be utilized. The ultimate realization of these carry forwards is

due, in part, on the tax law in effect at the time and future events, which cannot be determined. During the

year ended December 31, ~~2013~~2014, a valuation allowance was recorded against this net operating loss carried

forward.

2524

Liquidity and Capital Resources

Allied has a working capital surplus of $1,~~418~~458,~~984~~552 as of December 31, ~~2013~~2014 and has funded its cash needs

since inception with revenues generated from operations, debt instruments and private equity placements.

Existing working capital and anticipated cash flow are expected to be sufficient to fund operations.

Total current assets as of December 31, ~~2013~~2014 were $1,~~431~~437,~~841~~287 which consisted of $1,~~390~~412,~~041~~161 in cash and

$4161,~~800~~126 in accounts receivable. Total assets were $2,~~802~~793,~~102~~024 which consisted of current assets, proven oil

and gas properties and an escrow deposit. Total current liabilities were $1214,~~857~~735 which consisted of accounts

payable. Total liabilities were $~~225~~238,~~858~~279 which consisted of current liabilities, and an asset retirement

obligation of $~~213~~223,~~001~~544. Total stockholders’ equity as of December 31, ~~2013~~2014 was $2,~~576~~554,~~244~~745.

Net cash provided by operations for the year ended December 31, ~~2013~~2014 was $6722,~~009~~120 as compared to net

cash provided by operations of $2767,~~131~~009 for the year ended December 31, ~~2012~~2013. Net cash provided by

operating activities in the current period can be attributed primarily to a number of items that are book

expense items which do not affect the total amount relative to actual cash used including depletion and

amortization, ~~stock option expense,~~ and accretion expense. Balance sheet accounts that actually affect cash, but are not income

~~sheet~~statement ~~accounts~~related items, that ~~actually~~are ~~affect~~added ~~cash,~~or ~~but~~deducted ~~are~~to ~~not~~arrive ~~income~~at ~~statement~~net ~~related~~cash ~~items,~~provided ~~that~~by ~~are~~operations, ~~added or~~include

~~deducted to arrive at net cash provided by operations, include~~ accounts receivable and accounts payable.

Allied expects net cash to continue to be provided by operations in future periods as revenues are expected

to increase.

Net cash used in investing activities for the years ended December 31, ~~2013~~2014 and December 31, ~~2012~~2013, was

zero. Allied expects to use net cash flow in investing activities over future periods as it identifies

~~identifies~~ exploration opportunities and considers additional acquisitions.

Net cash from financing activities for the years ended December 31, ~~2013~~2014 and December 31, ~~2012~~2013, was ~~zero.~~

zero. Allied does not expect net cash flow from financing activities in the near term.

Since earnings are reinvested in operations, cash dividends are not expected to be paid in the foreseeable

future.

Allied has no lines of credit or other bank financing arrangements.

Commitments for future capital expenditures were not material at year-end.

Allied has adopted a stock option plan pursuant to which it can grant up to 750,000 options to purchase

shares of its common stock to employees, directors, officers, consultants or advisors of Allied on the terms

and conditions set forth therein. As of December 31, ~~2013~~2014, 600,000 options ~~have~~had been granted of which all

have vested.

Allied has entered into an agreement with its chief executive officer that provides for a five year term,

effective July 1, 2013, that includes a monthly fee and participation in Allied’s stock option plan.

Allied has no current plans for the purchase or sale of any plant or equipment.

Allied has no current plans to make any changes in the number of employees.

2625

Off Balance Sheet Arrangements

As of December 31, ~~2013~~2014, Allied has no significant off-balance sheet arrangements that have or are

reasonably likely to have a current or future effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources

that is material to stockholders.

Forward Looking Statements and Factors That May Affect Future Results and Financial Condition

The statements contained in the section titled Management’s Discussion and Analysis of Financial

Condition and Results of Operations and elsewhere in this current report, with the exception of historical

facts, are forward looking statements. Forward looking statements reflect our current expectations and

beliefs regarding our future results of operations, performance, and achievements. These statements are

subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not

materialize. These statements include, but are not limited to, statements concerning:

§ our anticipated financial performance and business plan;

§ uncertainties related to production volumes of oil and gas;

§ the sufficiency of existing capital resources;

§ uncertainties related to future oil and gas prices;

§ our ability to raise additional capital to fund cash requirements for future operations;

§ uncertainties related the quantity of our reserves of oil and gas

§ the volatility of the stock market and;

§ general economic conditions.

We wish to caution readers that our operating results are subject to various risks and uncertainties that could

cause our actual results to differ materially from those discussed or anticipated, including the factors set

forth in the section entitled Risk Factors included elsewhere in this report. We also wish to advise readers

not to place any undue reliance on the forward looking statements contained in this report, which reflect our

beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these

forward looking statements to reflect new events or circumstances or any changes in our beliefs or

expectations, other than as required by law.

Stock-Based Compensation

We have adopted Accounting Standards Codification Topic (“ASC”) 718, which addresses the accounting

for stock-based payment transactions in which an enterprise receives employee services in exchange for (a)

equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity

instruments or that may be settled by the issuance of such equity instruments.

We account for equity instruments issued in exchange for the receipt of goods or services from other than

employees in accordance with ASC 505. Costs are measured at the estimated fair market value of the

consideration received or the estimated fair value of the equity instruments issued, whichever is more

reliably measurable. The value of equity instruments issued for consideration other than employee services

is determined on the earliest of a performance commitment or completion of performance by the provider of

goods or services.

Critical Accounting Policies and Estimates

Accounting for Oil and Gas Property Costs. As more fully discussed in Note 1 to the Financial Statements,

Allied (i) follows the successful efforts method of accounting for the costs of its oil and gas properties, (ii)

amortizes such costs using the units of production method and (iii) evaluates its proven properties for

impairment whenever events or changes in circumstances indicate that their net book value may not be

recoverable. Adverse changes in conditions (primarily gas price declines) could result in permanent

write-downs in the carrying value of oil and gas properties as well as non-cash charges to operations that

would not affect cash flows.

Estimates of Proved Oil and Gas Reserves. An independent petroleum engineer annually estimates Allied’s

proven reserves. Reserve engineering is a subjective process that is dependent upon the quality of available

data and the interpretation thereof. In addition, subsequent physical and economic factors such as the results

of drilling, testing, production and product prices may justify revision of such estimates. Therefore, actual

quantities, production timing, and the value of reserves may differ substantially from estimates. A reduction

in proved reserves would result in an increase in depreciation, depletion and amortization expense.

Estimates of Asset Retirement Obligations. In accordance with ASC 410-20, Allied makes estimates of

future costs and the timing thereof in connection with recording its future obligations to plug and abandon

wells. Estimated abandonment dates will be revised in the future based on changes to related economic

lives, which vary with product prices and production costs. Estimated plugging costs may also be adjusted

to reflect changing industry experience. Increases in operating costs and decreases in product prices would

increase the estimated amount of the obligation and increase depreciation, depletion and amortization

expense. Cash flows would not be affected until costs to plug and abandon were actually incurred.

Recent Accounting Pronouncements

Please see Note 14 to our ~~consolidated~~ financial statements for recent accounting pronouncements.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our audited financial statements for the years ended December 31, ~~2013~~2014 and ~~2012~~2013 in addition to our

supplementary schedules are attached hereto as F-1 through F-20.

2827

ALLIED RESOURCES, INC.

INDEX TO FINANCIAL STATEMENTS

December 31, ~~2013~~2014 and ~~2012~~2013

Page

Report of Independent Registered Public Accounting Firm

F-2

Balance Sheets

F-3

Statements of Operations

F-4

Statements of Stockholders’ Equity

F-5

Statements of Cash Flows

F-6

Notes to Financial Statements

F-7

Supplementary Schedules on Oil and Gas Operations

F-15

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Allied Resources, Inc.

We have audited the accompanying balance sheets of Allied Resources, Inc. (the Company) as of

December 31, ~~2013~~2014 and ~~2012~~2013, and the related statements of operations, stockholders’ equity, and cash flows

for each of the years in the two-year period ended December 31, ~~2013~~2014. The Company’s management is

responsible for these financial statements. Our responsibility is to express an opinion on these financial

statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight

Board (United States). Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. The ~~Company~~company is not

required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Our audit included consideration of internal control over financial reporting as a basis for designing audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such

opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements, assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation. We believe that our audits

provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial

position of Allied Resources, Inc. as of December 31, ~~2013~~2014 and ~~2012~~2013, and the results of its operations and

its cash flows for each of the years in the two-year period ended December 31, ~~2013~~2014, in conformity with

accounting principles generally accepted in the United States of America.

/s/ JONES SIMKINS LLC

JONES SIMKINS LLC

Logan, Utah

~~March~~April 3115, ~~2014~~2015

F-2

ALLIED RESOURCES, INC.

BALANCE SHEETS

December 31, ~~2013~~2014 and ~~2012~~2013

ASSETS

2014

2013

2012

Current assets:

Cash

1,412,161

1,390,041

1,323,032

Accounts receivable

61,126

41,800

62,096

Total current assets

1,473,287

1,431,841

1,385,128

Oil and gas properties (proven), net (successful

efforts method)

615,036

665,560

718,627

Deposits

704,701

Total assets

2,793,024

2,802,102

2,808,456

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

14,735

12,857

35,149

Total current liabilities

14,735

12,857

35,149

Asset retirement obligation

223,544

213,001

202,956

Total liabilities

238,279

225,858

238,105

Commitments and contingencies

Stockholders' equity:

Common stock, $.001 par value; 50,000,000 shares

authorized, 5,653,011 issued and outstanding

5,653

Additional paid-in capital

9,916,458

9,~~897~~916,~~143~~458

Accumulated deficit

(7,367,366)

(7,345,867)

(7,332,445)

Total stockholders' equity

2,554,745

2,576,244

2,570,351

Total liabilities and stockholders' equity

2,793,024

2,802,102

2,808,456

The accompanying notes are an integral part of these consolidated financial statements.

F-3

ALLIED RESOURCES, INC.

STATEMENTS OF OPERATIONS

Years Ended December 31, ~~2013~~2014 and ~~2012~~2013

2014

2013

~~2012~~Revenue:

Oil and gas ~~revenues~~sales

548,099

612,759

~~521,271~~Other

37,500

585,599

612,759

Operating expenses:

Production costs

352,775

356,304

341,250

Depletion and amortization

50,524

53,067

82,117

General and administrative expenses

206,032

220,121

~~234~~609,~~884~~331

629,492

658,251

Loss from operations

(23,732)

(16,733)

(136,980)

Interest income

2,233

3,311

9,306

Loss before provision for income taxes

(21,499)

(13,422)

~~(127,674)~~Provision for income taxes

Provision for income taxes - deferred

Net loss

(21,499)

(13,422)

(127,674)

Loss per common share - basic and diluted

~~(0.02)~~-

Weighted average common shares - basic and diluted

5,653,000

The accompanying notes are an integral part of these consolidated financial statements.

F-4

ALLIED RESOURCES, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

Years Ended December 31, ~~2013~~2014 and ~~2012~~2013

Additional

Total

Common Stock

Paid-In

Accumulated

Stockholders'

Amount

Capital

Deficit

Equity

Balance at January 1, ~~2012~~2013

5,653,011 $

5,653 $ ~~9,858,512 $~~

(79,~~204~~897,~~771)~~143 $

2(7,~~659~~332,~~394~~445) $

Stock option compensation

expense

38,631

Net loss

(127,674)

Balance at December 31, 2012

5,653,011

5,653

9,897,143

(7,332,445)

2,570,351

Stock option compensation

expense

19,315

Net loss

(13,422)

Balance at December 31, 2013

5,653,011 $

5,653 ~~$ 9,916,458 $~~

(79,~~345~~916,~~867) $~~458

(7,345,867)

2,576,244

Net loss

(21,499)

Balance at December 31, 2014

5,653,011 $

5,653 $

9,916,458 $

(7,367,366) $

2,554,745

The accompanying notes are an integral part of these consolidated financial statements.

F-5

ALLIED RESOURCES, INC.

STATEMENTS OF CASH FLOWS

Years Ended December 31, ~~2013~~2014 and ~~2012~~2013

2014

2013

2012

Cash flows from operating activities:

Net loss

(21,499)

(13,422)

(127,674)

Adjustments to reconcile net loss to net

cash provided by operating activities:

Depletion and amortization

50,524

53,067

82,117

Stock option compensation expense

19,315

38,631

Accretion expense

10,543

10,045

~~7,574~~(Increase) decrease in:

Decrease in:

Accounts receivable

(19,326)

20,296

10,560

Increase (decrease) in:

Accounts payable

1,878

(22,292)

15,923

Net cash provided by operating activities

22,120

67,009

27,131

Cash flows from investing activities:

Cash flows from financing activities:

Net increase in cash

22,120

67,009

27,131

Cash, beginning of year

1,390,041

1,323,032

1,295,901

Cash, end of year

1,412,161

1,390,041

1,323,032

The accompanying notes are an integral part of these consolidated financial statements

F-6

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, ~~2013~~2014 and ~~2012~~2014

Note 1 – Organization and Summary of Significant Accounting Policies

Organization

Allied Resources, Inc. (the Company) was incorporated on April 5, 2002. The Company is primarily

engaged in the business of acquiring, developing, producing and selling oil and gas production and

properties to companies located in the continental United States.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments with a

maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are amounts due on oil and gas sales and are unsecured. Accounts receivable are

carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus

accounts receivable do not bear interest although a finance charge may be applied to such receivables that

are more than thirty days past due. Accounts receivable are periodically evaluated for collectibility based on

past credit history with clients. Provisions for losses on accounts receivable are determined on the basis of

loss experience, known and inherent risk in the account balance, ~~and~~ current economic conditions., and the

financial stability of customers.

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured

limits. The Company has not experienced any losses in such accounts. The Company believes it is not

exposed to any significant credit risk on cash and cash equivalents.

Oil and Gas Producing Activities

The Company utilizes the successful efforts method of accounting for its oil and gas producing activities.

Under this method, all costs associated with productive exploratory wells and productive or nonproductive

development wells are capitalized while the costs of nonproductive exploratory wells are expensed.

If an exploratory well finds oil and gas reserves, but a determination that such reserves can be classified as

proved is not made after one year following completion of drilling, the costs of drilling are charged to

operations. Indirect exploratory expenditures, including geophysical costs and annual lease rentals, are

expensed as incurred. Unproved oil and gas properties that are individually significant are periodically

assessed for impairment of value and a loss is recognized at the time of impairment by providing an

impairment allowance. Other unproved properties are amortized based on the Company’s experience of

successful drillings and average holding period. Capitalized costs of producing oil and gas properties, after

considering estimated dismantlement and abandonment costs and estimated salvage values, are depreciated

and depleted by the units-of-production method. Support equipment and other property and equipment are

depreciated over their estimated useful lives.

F-7

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, ~~2013~~2014 and ~~2012~~2014

Note 1 – Organization and Summary of Significant Accounting Policies (continued)

Oil and Gas Producing Activities (continued)

On the sale or retirement of a complete unit of a proved property, the cost and related accumulated

depreciation, depletion and amortization are eliminated from the property accounts, and the resultant gain

or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to

accumulated depreciation, depletion and amortization with a resulting gain or loss recognized in income.

On the sale of an entire interest in an unproved property for cash or cash equivalent, gain or loss on the sale

is recognized, taking into consideration the amount of any recorded impairment if the property has been

assessed individually. If a partial interest in an unproved property is sold, the amount received is treated as

a reduction of the cost of the interest retained.

The continued carrying value of the Company’s oil and natural gas properties depends primarily upon the

estimated reserves and the prices it receives for oil and natural gas production. Oil and natural gas prices

historically have been volatile and are likely to continue to be volatile in the future. The Company’s

production quantities of oil and natural gas are in decline. Any decrease in oil and natural gas prices without

an offsetting increase in reserve quantities could result in an impairment of the Company’s assets.

Current accounting standards may require companies involved in the oil and gas industry to reclassify oil

and gas contract based drilling rights from tangible to intangible assets and to provide the related intangible

assets disclosures under Accounting Standards Codification (ASC) 350. Since the Company does not have

any contract based oil and gas drilling rights, any disclosure related to this possible requirement would not

have an affect on the Company’s financial statements.

Income Taxes

~~Deferred~~The ~~income~~Company ~~taxes~~files ~~arise~~Federal ~~from~~and ~~temporary~~state ~~differences~~income ~~resulting~~tax ~~from~~returns ~~income~~in ~~and~~states ~~expense~~in ~~items~~which ~~reported~~it operates. Deferred income

~~for~~taxes ~~financial~~arise ~~accounting~~from ~~and~~temporary ~~tax~~differences ~~purposes~~resulting infrom ~~different~~income ~~periods.~~and ~~Deferred~~expense ~~taxes~~items ~~are~~reported ~~classified~~for ~~as current or~~financial

~~noncurrent,~~accounting ~~depending~~and ontax ~~the~~purposes ~~classification~~in ofdifferent ~~the~~periods. Deferred tax assets and liabilities toare ~~which~~measured ~~they relate. Deferred taxes~~using

~~arising~~enacted ~~from~~tax ~~temporary~~rates ~~differences~~expected ~~that~~to ~~are~~apply ~~not~~to ~~related~~taxable toincome anin ~~asset~~the oryears ~~liability~~in ~~are~~which ~~classified~~those astemporary ~~current~~differences orare

~~noncurrent~~expected ~~depending~~to onbe ~~the~~recovered ~~periods~~or insettled. ~~which~~Deferred ~~the~~taxes ~~temporary~~are ~~differences~~classified ~~are~~as ~~expected~~current toor ~~reverse.~~noncurrent, depending on the

classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary

differences that are not related to an asset or liability are classified as current or noncurrent depending on

the periods in which the temporary differences are expected to reverse. As changes in tax laws or rates are

enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

The Company considers many factors when evaluating and estimating its tax positions and tax benefits. Tax

positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on

technical merits, that the positions will be sustained upon examination. Reserves are established if it is

believed certain positions may be challenged and potentially disallowed. If facts and circumstances change,

reserves are adjusted through the provision for income taxes. The Company recognizes interest expense and

penalties related to unrecognized tax benefits with the provision for income taxes.

F-8

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, ~~2013~~2014 and ~~2012~~2014

Note 1 – Organization and Summary of Significant Accounting Policies (continued)

Earnings Per Share

The computation of basic earnings per common share is based on the weighted average number of shares

outstanding during each year.

The computation of diluted earnings per common share is based on the weighted average number of shares

outstanding during the year plus the common stock equivalents which would arise from the exercise of

stock options and warrants outstanding using the treasury stock method and the average market price per

share during the year. Common stock equivalents are not included in the diluted earnings per share

calculation when their effect is ~~antidilutive~~anti-dilutive. Common stock equivalents that could potentially dilute

earnings per share are common stock options.

Presentation of Sales and Similar Taxes

Sales tax on revenue-producing transactions is recorded as a liability when the sale occurs.

Revenue Recognition

Revenue is recognized from oil sales at such time as the oil is delivered to the buyer. Revenue is recognized

from gas sales when the gas passes through the pipeline at the well head. The Company believes that both

oil and gas revenues should be recognized at these times because ownership of the oil and gas generally

passes to the customer at these times. Management believes that this policy meets the recognition criteria ofin

~~Staff Accounting Bulletin 101 in~~ that there is persuasive evidence of an existing contract or arrangement, delivery has occurred, the price is

~~delivery has occurred, the price is~~ fixed and determinable and the collectibility is reasonably assured.

The Company does not have any gas balancing arrangements.

Stock-Based Compensation

At December 31, ~~2013~~2014, the Company has a stock option plan, which is described more fully in Note 8. The

Company accounts for stock compensation under ASC Topic 718. This topic requires the Company to ~~recognize~~

recognize compensation cost based on the grant date fair value of options granted.

F-9

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 and 2014

Note 1 – Organization and Summary of Significant Accounting Policies (continued)

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles

requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the periods reported. Actual results could differ from

those estimates.

Significant estimates include volumes of oil and natural gas reserves used in calculating depletion of proved

oil and natural gas properties, future net revenues and abandonment obligations, future taxable income and

related assets/liabilities, the collectibility of outstanding accounts receivable, stock-based compensation

expense, and contingencies. Oil and natural gas reserve estimates, which are the basis for

unit-of-production depletion, have numerous inherent uncertainties. The accuracy of any reserve estimate is

a function of the quality of available data and of engineering and geological interpretation and judgment.

Subsequent drilling results, testing and production may justify revision of such estimates. Accordingly,

reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered.

In addition, reserve estimates are vulnerable to changes in wellhead prices of crude oil and natural gas. Such

prices have been volatile in the past and can be expected to be volatile in the future.

F-9

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2013 and 2012

Note 1 – Organization and Summary of Significant Accounting Policies (continued)

Use of Estimates in the Preparation of Financial Statements (continued)

The significant estimates are based on current assumptions that may be materially affected by changes to

future economic conditions such as the market prices received for sales of volumes of oil and natural gas,

the creditworthiness of counterparties, interest rates, the market value of the Company’s common stock

and corresponding volatility and the Company’s ability to generate future taxable income. Future changes

to these assumptions may affect these significant estimates materially in the near term.

Note 2 – Oil and Gas Properties

Oil and gas properties consist of the following:

December 31,

2014

2013

~~2012~~Oil and gas properties (successful efforts method)

Proved oil and gas properties and related equipment

8,513,291

~~Asset~~Capitalized costs related to asset retirement obligation

93,499

8,606,790

~~Accumulated~~Less accumulated depreciation, depletion, and amortization

~~and valuation allowances~~(7,991,754)

(7,941,230)

(7,888,163)

615,036

665,560

~~718,627~~F-10

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 and 2014

Note 3 – Deposits

The Company has an operating agreement with one of the operators of the Company’s oil and gas wells.

Terms of the agreement allow the operator to withhold a portion of the Company’s share of revenue for

possible future costs associated with the wells. The terms of the agreement require that these funds be held

in escrow. As of December 31, ~~2013~~2014 and ~~2012~~2013 amounts on deposit were approximately $705,000 and

$705,000, respectively.

Note 4 – Asset Retirement Obligation

The Company is subject to certain regulations implemented to protect the environment. These regulations

require that when oil and gas wells are abandoned, the owners must perform certain reclamation activities

related to the oil and gas wells. Accordingly, a liability has been established equal to the present value of the

Company’s estimated ~~prorata~~pro-rata share of the obligation. The Company has no assets that are legally restricted

for the purpose of settling this obligation.

F-10

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2013 and 2012

Note 4 – Asset Retirement Obligation (continued)

Following is a reconciliation of the aggregate retirement liability associated with the Company’s obligation

to plug and abandon its oil and gas properties:

2014

2013

2012

Balance at beginning of year

213,001

202,956

195,382

Accretion expense

10,543

10,045

7,574

Balance at end of year

223,544

213,001

202,956

Note 5 – Income Taxes

The provision (benefit) for income taxes differs from the amount computed at federal statutory rates as

follows:

2014

2013

2012

Federal income tax benefit at statutory rate

(7,000)

(2,000)

(43,000)

State income tax benefit, net of federal tax benefit

(1,000)

(51,000)

Expiration of net operating loss carry-forward

5,000

Change in valuation allowance

9,000

(3,000)

41,000

Other

(1,000)

1,000

7,000

F-11

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 and 2014

Note 5 – Income Taxes (continued)

Deferred tax assets (liabilities) are comprised of the following:

2014

2013

2012

Net operating loss carry-forwards

729,000

732,000

757,000

Asset retirement obligation

66,000

62,000

56,000

Depletion and amortization

128,000

120,000

111,000

Stock compensation expense

66,000

5966,000

989,000

980,000

983,000

Less valuation allowance

(989,000)

(980,000)

(983,000)

FAs of December 31, 2014, the Company had net operating loss (NOL) carry-11forwards of approximately

~~ALLIED RESOURCES~~$2, ~~INC~~143,000. If substantial changes in the Company’s ownership should occur there would be an annual

~~NOTES~~limitation TOof the ~~FINANCIAL~~amount of NOL carry-forwards ~~STATEMENTS~~which could be utilized. Also, the ultimate realization of

~~December~~these 31carry-forwards is due, ~~2013~~in part, on the tax law in effect at the time and ~~2012~~future events, which cannot be

Note 5 – Income Taxes (continued)

As of December 31, 2013, the Company had net operating loss (NOL) carryforwards of approximately

$2,155,000. If substantial changes in the Company’s ownership should occur there would be an annual

limitation of the amount of NOL carryforwards which could be utilized. Also, the ultimate realization of

these carryforwards is due, in part, on the tax law in effect at the time and future events, which cannot be

determined.

The Company’s NOL amounts and related years of expiration are as follows:

Year

Year of

Generated

Amount

Expiration

1998

8068,000

2018

1999

1,980,000

2019

2001

4,000

2021

2002

78,000

2022

2011

12,000

2031

2012

1,000

2032

2,~~155~~143,000

The Company is no longer subject to examination by federal and state taxing authorities for years prior to

~~2010~~2011.

Note 6 – Related Party Transactions

The Company leases office space on a month-to-month basis from the CEO of the Company. The lease

requires monthly payments of $1,000. The Company incurred rent expense of approximately $12,000

during the years ended December 31, 2013 and 2012. At December 31, 2013 and 2012, $1,000 was

included in accounts payable for rent.

The Company has a consulting agreement with its CEO to provide management services. The agreement

requires monthly payments of $10,000. The Company incurred management and consulting fees of

approximately $120,000 during the years ended December 31, 2013 and 2012. At December 31, 2013 and

2012, $10,000 was included in accounts payable for management services.

Note 7 – Supplemental Disclosures of Cash Flow Information

No amounts were paid for interest or income taxes during the years ended December 31, 2013 and 2012.

F-12

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, ~~2013~~2014 and ~~2012~~2014

Note 6 – Related Party Transactions

The Company leases office space on a month-to-month basis from the CEO of the Company. The lease

requires monthly payments of $1,000. The Company incurred rent expense of $12,000 during the years

ended December 31, 2014 and 2013. At December 31, 2014 and 2013, $1,000 was included in accounts

payable for rent.

The Company has an agreement with its CEO to provide executive services. The agreement requires

monthly payments of $10,000. The Company incurred management and consulting fees of approximately

$120,000 during the years ended December 31, 2014 and 2013. At December 31, 2014 and 2013, $10,000

was included in accounts payable for management services.

Note 7 – Supplemental Disclosures of Cash Flow Information

No amounts were paid for interest or income taxes during the years ended December 31, 2014 and 2013.

Note 8 – Stock Options

The Company has a stock option plan (the Plan) which allows for the issuance of the Company’s common

stock or the grant of options to acquire the Company’s common stock from time to time to employees,

directors, officers, consultants or advisors of the Company on the terms and conditions set forth in the Plan.

At December 31, ~~2013~~2014 and ~~2012~~2013, the Company had 600,000 options outstanding at an exercise price of

$0.35. During the years ended December 31, ~~2013~~2014 and ~~2012~~2013, the Company did not have any changes in the

number of outstanding options.

Note 9 – Stock Based Compensation

The following table summarizes information about common stock options outstanding at December 31,

~~2013:~~2014

Outstanding

Exercisable

Weighted

Average

Weighted

Remaining

Average

Exercise

Number

Contractual

Exercise

Number

Exercise

Price

Outstanding

Life (Years)

Price

Exercisable

Price

$ 0.35

600,000

54.0

$ 0.35

600,000

$ 0.35

F-13

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 and 2014

Note 10 – Fair Value of Financial Instruments

The Company estimates that the fair value of all financial instruments at December 31, ~~2013~~2014 and ~~2012~~2013 does

not differ materially from the aggregate carrying value of its financial instruments recorded in the

accompanying balance sheet. Carrying value approximates fair value due to the short maturity of the

instruments identified as current assets and liabilities. The Company’s financial instruments are held for

non-trading purposes.

Note 11 – Commitments and Contingencies

Oil and Gas Operating Agreement

The Company has agreements with the operators of the oil and gas wells in which the Company owns an

interest. These agreements require the Company to pay a percentage of the fees and production costs of

operating the wells.

Litigation

The Company may become or is subject to investigations, claims or lawsuits ensuing out of the conduct of

its business, including those related to environmental safety and health, commercial transactions, etc. The

Company is currently not aware of any such item which it believes could have a material adverse affect on

its financial position.

F-13

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2013 and 2012

Note 12 – Risks and Uncertainties

The Company’s oil and gas reserves are continually declining, which will eventually result in a reduction of

the amount of oil and gas produced, oil and gas revenues and cash flows. The Company has historically

replaced reserves through both drilling and acquisitions, however, there is no assurance that oil and gas

reserves can be located through drilling or acquisition or that even if reserves are located, that such reserves

will allow the recovery of all or part of the investment made by the Company to obtain these reserves.

The Company’s carrying cost of its oil and gas properties are subject to possible future impairment based on

the estimated future cash flows of these properties. These estimated future cash flows are in turn subject to

oil and gas prices that are subject to fluctuations and, as a consequence, no assurance can be given that oil

and gas prices will decrease, increase or remain stable.

Note 13 – Subsequent Events

The Company evaluated its December 31, ~~2013~~2014, financial statements for subsequent events through the

date the financial statements were issued. The Company is not aware of any subsequent events which

would require recognition or disclosure in the financial statements.

Note 14 – Recent Accounting Pronouncements

The Company’s management has evaluated the recently issued accounting pronouncements

through the filing date of these financial statements and has determined that the application of

these pronouncements will not have a material impact on the Company’s financial position and

results of operations.

F-14

ALLIED RESOURCES, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 and 2014

Note 14 – Recent Accounting Pronouncements

The Company’s management has evaluated the recently issued accounting pronouncements through the

filing date of these financial statements and has determined that the application of these pronouncements

will not have a material impact on the Company’s financial position and results of operations.

F-15

ALLIED RESOURCES, INC.

SCHEDULE OF SUPPLEMENTARY INFORMATION

ON OIL AND GAS OPERATIONS

December 31, ~~2013~~2014 and ~~2012~~2013

Capitalized Costs Relating to Oil and Gas Producing Activities

December 31,

2014

2013

2012

Proved oil and gas properties and related equipment

8,513,291

Unproved oil and gas properties

~~Asset~~Capitalized costs related to asset retirement obligation

93,499

8,606,790

Accumulated depreciation, depletion, amortization

and valuation allowances

(7,991,754)

(7,941,230)

(7,888,163)

615,036

665,560

718,627

Costs Incurred in Oil and Gas Acquisition, Exploration and Development Activities

December 31,

2014

2013

2012

Acquisition of properties:

Proved

Unproved

Exploration costs

Development costs

F-1516

ALLIED RESOURCES, INC.

SCHEDULE OF SUPPLEMENTARY INFORMATION

ON OIL AND GAS OPERATIONS

December 31, ~~2013~~2014 and ~~2012~~2013

Results of Operations for Producing Activities

Years Ended

December 31,

2014

2013

2012

Oil and gas revenues

548,099

612,759

521,271

Production costs net of reimbursements

(352,775)

(359,304)

(341,250)

Exploration costs

Depreciation, depletion, amortization, and valuation provisions

(50,524)

(53,067)

(82,117)

Net income before income taxes

144,800

203,388

97,904

Income tax expense

49,000

69,000

33,000

Results of operations from producing activities (excluding

corporate overhead and interest costs)

95,800

134,388

~~64,904~~F-17

F-16

ALLIED RESOURCES, INC.

SCHEDULE OF SUPPLEMENTARY INFORMATION

ON OIL AND GAS OPERATIONS

December 31, ~~2013~~2014 and ~~2012~~2013

Reserve Quantity Information (Unaudited)

The estimated quantities of proved oil and gas reserves disclosed in the table below are based on appraisal

of the proved developed properties by Sure Engineering, LLC. Such estimates are inherently imprecise and

may be subject to substantial revisions.

All quantities shown in the table are proved developed reserves and are located within the United States.

Years Ended December 31,

2014

2013

2012

Oil

Gas

Oil

Gas

(bbls)

(mcf)

(bbls)

(mcf)

Proved developed and undeveloped reserves:

Beginning of year

26,434

1,438,888

27,557

1,017,803

23,931

829,179

Revision in previous estimates

972

43,794

1,716

520,929

6,687

294,547

Discoveries and extension

Purchase in place

Production

(2,945)

(95,799)

(2,839)

(99,844)

(3,061)

(105,923)

Sales in place

End of year

24,461

1,386,883

26,434

1,438,888

~~27,557~~F-18

1,017,803

F-17

ALLIED RESOURCES, INC.

SCHEDULE OF SUPPLEMENTARY INFORMATION

ON OIL AND GAS OPERATIONS

December 31, ~~2013~~2014 and ~~2012~~2013

Standardized Measure of Discounted Future Net Cash Flows and Changes Therein Relating to Proved Oil

and Gas Reserves (Unaudited)

Years Ended

December 31,

2014

2013

2012

Future cash inflows

6,605,000

7,277,000

5,293,000

Future production and development costs

(4,374,000)

(4,770,000)

(3,549,000)

Future income tax expenses

(758,000)

(853,000)

~~(593~~1,473,000)

1,654,000

1,151,000

10% annual discount for estimated timing of cash flows

(833,000)

(920,000)

(598,000)

Standardized measure of discounted future net cash flows

640,000

734,000

553,000

The preceding table sets forth the estimated future net cash flows and related present value, discounted at a

10% annual rate, from the Company’s proved reserves of oil, condensate and gas. The estimated future net

revenue is computed by applying the average prices of oil and gas (including price changes that are fixed

and determinable) based upon the prior 12-month period and current costs of production and development

for estimated future production assuming continuation of existing economic conditions. The values

expressed are estimates only, without actual long-term production to base the production flows, and may

not reflect realizable values or fair market values of the oil and gas ultimately extracted and recovered. The

ultimate year of realization is also subject to accessibility of petroleum reserves and the ability of the

Company to market the products.

F-1819

ALLIED RESOURCES, INC.

SCHEDULE OF SUPPLEMENTARY INFORMATION

ON OIL AND GAS OPERATIONS

December 31, ~~2013~~2014 and ~~2012~~2013

Changes in the Standardized Measure of

Discounted Future Cash Flows (Unaudited)

Years Ended

December 31,

2014

2013

2012

Balance, beginning of year

734,000

553,000

701,000

Sales of oil and gas produced net of production costs

(191,000)

(206,000)

(187,000)

Net changes in prices and production costs

137,000

(284,000)

(1,340,000)

Extensions and discoveries, less related costs

Purchase and sales of minerals in place

Revisions of estimated development costs

Revisions of previous quantity estimate

(59,000)

471,000

1,351,000

Accretion of discount

73,000

55,000

70,000

Net changes in income taxes

(54,000)

145,000

(42,000)

Balance, end of year

640,000

734,000

~~553,000~~F-20

F-19

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by

Allied’s management, with the participation of the chief executive officer and the chief financial officer, of

the effectiveness of Allied’s disclosure controls and procedures (as defined in Rules 13a-15(e) and

15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of the end of the period covered

by this report. Disclosure controls and procedures are designed to ensure that information required to be

disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and

reported within the time periods specified in the Commission’s rules and forms, and that such information

is accumulated and communicated to management, including the chief executive officer and the chief

financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, Allied’s management concluded, as of the end of the period covered by this

report, that Allied’s disclosure controls and procedures were effective in recording, processing,

summarizing, and reporting information required to be disclosed, within the time periods specified in the

Commission’s rules and forms, and such information was accumulated and communicated to management,

including the chief executive officer and the chief financial officer, to allow timely decisions regarding

required disclosures.

Management’s Report on Internal Control over Financial Reporting

Management of Allied is responsible for establishing and maintaining adequate internal control over

financial reporting. Allied’s internal control over financial reporting is a process, under the supervision of

the chief executive officer and the chief financial officer, designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of Allied’s financial statements for

external purposes in accordance with United States generally accepted accounting principles (GAAP).

Internal control over financial reporting includes those policies and procedures that:

§ Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of Allied’s assets;

§ Provide reasonable assurance that transactions are recorded as necessary to permit preparation of

the financial statements in accordance with generally accepted accounting principles, and that

receipts and expenditures are being made only in accordance with authorizations of management

and the board of directors; and

§ Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of Allied’s assets that could have a material effect on the financial statements.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk

that controls may become inadequate because of changes in conditions or that the degree of compliance

with the policies or procedures may deteriorate.

2928

Allied’s management conducted an assessment of the effectiveness of our internal control over financial

reporting as of December 31, ~~2013~~2014, based on criteria established in Internal Control – Integrated

Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission,

which assessment did not identify any material weaknesses in internal control over financial reporting. A

material weakness is a control deficiency, or a combination of deficiencies in internal control over financial

reporting that creates a reasonable possibility that a material misstatement in annual or interim financial

statements will not be prevented or detected on a timely basis. Since the assessment of the effectiveness of

our internal control over financial reporting did not identify any material weaknesses, management

considers its internal control over financial reporting to be effective.

This annual report does not include an attestation report of our independent registered public accounting

firm regarding internal control over financial reporting. We were not required to have, nor have we,

engaged our independent registered public accounting firm to perform an audit of internal control over

financial reporting pursuant to the rules of the Commission that permit us to provide only management’s

report in this annual report.

Changes in Internal Control over Financial Reporting

AsDuring of the ~~end~~quarter ofended ~~the~~December ~~period~~31, ~~covered by this report~~2014, there ~~have~~has been no ~~changes~~change in internal control over financial

~~financial~~ reporting ~~(as~~that ~~defined~~has inmaterially ~~Rule~~affected, ~~13a-15(f)~~or ofis ~~the~~reasonably ~~Exchange~~likely ~~Act)~~to ~~during~~materially ~~the~~affect ~~year~~our ~~ended~~internal ~~December~~control ~~31,~~over

2013, that materially affected, or are reasonably likely to materially affect, Allied’s internal control over

financial reporting.

9B.

OTHER INFORMATION

None.

3029

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Officers and Directors

The following table sets forth the name, age and position of each director and executive officer of Allied:

Name

Age

Year

Positions Held

Elected/Appointed

Ruairidh Campbell

5051

1998

Chief Executive Officer, Chief Financial Officer,

Principal Accounting Officer, Director

Ed Haidenthaller

5051

2004

Director

Paul Crow

6768

2005

Director, Secretary

Set forth below is a brief description of the background and business experience of each of our executive

officers and directors for the past five years:

Ruairidh Campbell

On June 6, 1998, Mr. Campbell was first elected as a director and subsequently appointed as an officer of

Allied. Mr. Campbell estimates that he spends approximately 20 hours per week on Allied’s business. He

also has significant responsibilities with other companies, as detailed in the following paragraph.

Business Experience

Mr. Campbell has been advising early-stage businesses for over 17 years in the public and private sectors.

Services range from investment banking to managerial duties that include working with government

regulators, business organizations, auditors, accountants, attorneys and quasi-public governing bodies

responsible for everything from public health to public quotation. He formed Orsa & Company in 2001

which is dedicated to providing these services.

Since joining Allied in 1998 Mr. Campbell has spent a significant amount of his time in the field with oil

and gas producers, prospectors and geologists in pursuit of growing the business.

Officer and Director Responsibilities and Qualifications

Mr. Campbell is responsible for the overall management of Allied and is involved in all of its day-to-day

~~day-to-day~~ operations and administration. He also serves as a director and as a member of Allied’s audit committee.

audit committee.

Mr. Campbell graduated from the University of Texas at Austin with a Bachelor of Arts in History and then

from the University of Utah College of Law with a Juris Doctorate with an emphasis in corporate law and

energy law.

Other Public Company Directorships in the Last Five Years

Over the last five years to present Mr. Campbell has served and continues to serve as an officer and

director of ~~Park Vida Group~~Arvana, Inc., a ~~real~~company ~~estate~~without ~~development~~significant ~~company~~operations ~~with~~(May ~~interests~~2013 into ~~the~~present) ~~Dominican~~and as an

~~Republic and as an~~ officer and director of ~~Arvana~~Park Vida Group, Inc., a real estate development company ~~without~~with ~~significant~~interests ~~operations.~~in the

31Dominican Republic (December 1998 to January 2015).

Ed Haidenthaller

On September 23, 2004, Mr. Haidenthaller was elected as a director of Allied. Mr. Haidenthaller estimates

that he spends approximately 1 hour per week on Allied’s business. He also has significant responsibilities

with other companies, as detailed in the following paragraph.

Business Experience

Mr. Haidenthaller worked as the Chief Financial Officer and holding company Secretary, for Proficio Bank

and NHB Holdings, Inc., respectively from March 2012 to November 2013. Proficio is a Utah State

chartered commercial bank with operations in Utah and Orlando, Florida and 33 additional loan generation

offices primarily east of the Rocky Mountains. Prior to this position, Mr. Haidenthaller was employed as

a director for approximately 2 years for McGladrey, the 5th largest accounting and consulting firm in the

US, and a multi-national firm specializing in internal audit, tax compliance, financial operations support,

and technology risk management. Prior to joining McGladrey Mr. Haidenthaller worked as a VP of Risk

management & Audit for a large multi-billion wholesale bank, and for 5+ years with Jefferson Wells

International managing its consulting practice as well as its banking services practice. Mr. Haidenthaller

also had his own business, Strategic Funding Consultants, LLC. which worked with start up and small

businesses to develop business strategies, assist in obtaining funding and general consulting services.

Officer and Director Responsibilities and Qualifications

Mr Haidenthaller serves on the board of directors as an independent director and in that capacity is

responsible for providing Allied with oversight in all material corporate decisions. He also serves

as a member of Allied’s audit committee.

Mr. Haidenthaller graduated from Weber State University with a Bachelor of Science in Finance and then

from the University of Utah with a Masters of Business Administration (MBA).

Other Public Company Directorships in the Last Five Years

None.

Paul Crow

On January 17, 2005, Mr. Paul Crow was appointed as a director of Allied and subsequently appointed as

secretary. Mr. Crow estimates that he spends approximately 2 hours per week on Allied’s business. He also

has significant responsibilities with other companies, as detailed in the following paragraph.

Business Experience

Mr. Crow operates his own Edgar preparation and filing business working with private and public

businesses to provide general consulting services related to Sarbanes-Oxley compliance and other

Commission related disclosure requirements. His prior experience includes work as a business consultant to

Axia Group, Inc., a company involved in business consulting and real estate from April 2002 until

September 2003 and as a library supervisor at the University of Utah from March 1996 until March of 2002.

3231

Officer and Director Responsibilities and Qualifications

Mr. Crow serves on the board of directors and in that capacity is responsible for considering corporate

matters and for participating in the decision making process at the board level. He is also responsible in his

capacity as secretary for filing Allied’s public disclosure online and serves as a member of Allied’s audit

committee.

Mr. Crow graduated from the University of Utah with a Bachelor of Science in Accounting in 1994.

Other Public Company Directorships in the Last Five Years

None.

No other persons are expected to make any significant contributions to Allied’s executive decisions who are

not executive officers or directors of Allied.

Term of Office

Our directors have been elected or appointed to the board of directors for a one (1) year term or until the

next annual meeting of our shareholders or until removed in accordance with our bylaws. Our sole

executive officer was appointed by our board of directors and holds office at the discretion of the board in

accordance with terms of his agreement with Allied.

Family Relationships

There are no family relationships between or among the directors or executive officers.

Involvement in Certain Legal Proceedings

During the past ten years there are no events that occurred related to an involvement in legal proceedings

that are material to an evaluation of the ability or integrity of any of Allied’s directors, persons nominated to

become directors or executive officers.

Compliance with Section 16(A) of the Exchange Act

Based solely upon a review of the Forms 3, 4 and 5 furnished to Allied, we are not aware of any person who,

during the period ended December 31, ~~2013~~2014, failed to file, on a timely basis, reports required by Section

16(a) of the Securities Exchange Act of 1934 ~~except the following:~~.

§ Mr. Campbell, our chief executive officer and one of our directors, failed to file a Form 4 or

Form 5 in connection with the vesting of options over the period.

§ Mr. Haidenthaller, one of our directors, failed to file a Form 4 or Form 5 in connection with the

vesting of options over the period.

§ Mr. Crow, one of our directors, failed to file a Form 4 or Form 5 in connection with the vesting

of options over the period.

Code of Ethics

Allied has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of the Securities

Exchange Act of 1934. The Code of Ethics applies to directors and senior officers, such as the principal

executive officer, principal financial officer, controller, and persons performing similar functions. Allied

has incorporated a copy of its Code of Ethics as Exhibit 14 to this Form 10-K. Further, our Code of Ethics is

available in print, at no charge, to any security holder who requests such information by contacting us.

Board of Directors Committees

Allied has formed an audit committee from the board of directors that assists the chief executive officer in

fulfilling its oversight responsibilities by reviewing the financial information which will be provided to the

shareholders and others; reviewing the systems of internal controls which management and the board of

directors have established; appointing, retaining and overseeing the performance of independent

accountants; and overseeing Allied’s accounting and financial reporting processes and the audit of its

financial statements.

Allied’s board of directors has not established a compensation committee.

Director Compensation

Directors currently are not reimbursed for out-of-pocket costs incurred in attending meetings but

non-executive directors are compensated for their service as directors in the amount $500 per meeting.

During the year ended December 31, ~~2013~~2014, Allied compensated each of its non-executive directors for their

participation in four meetings of the board of directors held over the annual period.

During the year ended December 31, ~~2013~~2014, Allied compensated one of its directors pursuant to a consulting

agreement with him for services rendered as corporate secretary for annual compensation of $3,000.

During the year ended December 31, ~~2013~~2014, Allied compensated one of its directors, pursuant to an

executive agreement with him for services rendered as chief executive officer, chief financial officer, and

principal accounting officer, for annual compensation of $120,000. He was further compensated in the

annual amount of $12,000 for providing office space to Allied ~~and for an additional grant of 500,000 stock~~.

~~options.~~ The ~~stock~~following ~~options~~table ~~have~~provides ~~not~~summary ~~yet~~information ~~been~~for ~~granted.~~the year 2014 concerning cash and non-cash

The following table provides summary information for the year 2013 concerning cash and non-cash

compensation paid or accrued by Allied to or on behalf of our directors.

Directors’ Summary Compensation Table

Name

Fees earned

Stock

Option

Non-equity

Nonqualified

All other

Total

or paid in

awards

Awards

incentive plan

deferred

compensation

($)

cash

($)

compensation

($)

Ruairidh Campbell

120,000*

~~16,000~~-

12,000**

~~148~~132,000

Paul Crow

2,000

1,600

3,000***

65,~~600~~000

Ed Haidenthaller

2,000

1,600

~~3,600~~-

2,000

Pursuant to a consulting agreement; amount paid to Mr. Campbell for services rendered as chief executive officer, chief

financial officer and principal accounting officer.

Pursuant to a month to month lease agreement; amount paid to Mr. Campbell for the provision of office space.

***

Pursuant to a consulting agreement; amount paid to Mr. Crow for services rendered as corporate secretary.

3433

ITEM 11.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The objective of Allied’s compensation program is to provide compensation for services rendered by our

sole executive officer in the form of a consulting fee and stock option grants. We utilize these forms of

compensation because we believe that these forms of consideration are adequate to both retain and motivate

our executive officer. The amounts we deem appropriate to compensate our executive officer are

determined in accordance with market forces; we have no specific formula to determine compensatory

amounts at this time. While we have deemed that our current compensatory program and the decisions

regarding compensation are easy to administer and are appropriately suited for our objectives, we may

expand our compensation program to any additional future employees to include options and other

compensatory elements.

Executive compensation for the year ended December 31, ~~2013~~2014 was $~~148~~132,000 as compared to $~~164~~148,000 for

the year ended December 31, ~~2012~~2013. The decrease can be attributed to the full vesting of stock option grants

~~half~~in ~~way through~~ the ~~current~~prior year. Compensation includes a monthly consulting fee, stock options and rent paid to our sole

~~paid to our sole~~ executive officer in exchange for office space. Outside of the stock option grant, the consistency in

~~consistency in~~ executive compensation in the comparative annual periods is attributable to Allied’s executive agreement

~~executive agreement~~ with its sole executive officer. We anticipate that executive compensation will remain relatively consistent

~~relatively consistent~~ over the remaining term of the five year agreement.

Tables

The following table provides summary information for the years ~~2013~~2014, and ~~2012~~2013 concerning cash and

non-cash compensation paid or accrued by Allied to or on behalf of (i) the chief executive officer and (ii)

any other employee to receive compensation in excess of $100,000.

Officer’s Summary Compensation Table

Name and

Year

Salary

Bonus

Stock

Option

Non-Equity

Change in

All Other

Total

Principal

($)

Awards

Incentive Plan

Pension Value

Compensation

($)

Position

($)

Compensation

and

($)

Nonqualified

Deferred

Compensation

($)

Ruairidh

~~2013~~2014 120,000

16,000

12,000

~~148~~132,000

Campbell,

~~2012~~2013 120,000

3216,000

12,000

~~164~~148,000

CEO, CFO,

PAO and

director

3534

The following table provides summary information for ~~2013~~2014 concerning unexercised options, stock that has

not vested, and equity incentive plan awards by Allied to or on behalf of (i) the chief executive officer and

(ii) any other employee to receive compensation in excess of $100,000:

Outstanding Equity Awards at Fiscal Year-End

Option awards

Stock awards

Equity

incentive

plan

awards:

market or

Equity

number

payout

incentive

Market

value of

plan

value of unearned unearned

awards:

Number

shares,

Number of

number of

of shares or units

units or

securities

or units

of stock

other

underlying

of stock

that

rights

unexercised

Option

that

have

that have that have

options

unearned

exercise

Option

have not

not

(#)

options

price

expiration

vested

Name

exercisable unexercisable

(#)

($)

date

(#)

($)

Ruairidh

Campbell

500,000

0.35

Dec 31,

2018

Allied has an executive agreement with its executive officer, effective July 1, 2013, through June 30, 2018,

for (i) an annual salary of $120,000, (ii) at Allied’s discretion, an annual bonus, and (iii) tenure based

incentive stock options. The stock options have not yet been granted.

Allied has no plans that provides for the payment of retirement benefits, or benefits that will be paid

primarily following retirement.

Allied has no agreement that provides for payment to our executive officer at, following, or in connection

with the resignation, retirement or other termination, or a change in control of Allied or a change in our

executive officer's responsibilities following a change in control.

3635

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information concerning the ownership of Allied’s 5,653,011 shares of

common stock issued and outstanding as of ~~March~~April 3115, ~~2014~~2015, with respect to: (i) all directors; (ii) each person

~~person~~ known by us to be the beneficial owner of more than five percent of our common stock; and (iii) our

directors and executive officers as a group.

Names and Addresses of Managers

Title of Class

Number of

Percent of

and Beneficial Owners

Shares

Class

Ruairidh Campbell

3002 Kinney Avenue

Common

2,060,000*

36.4

Austin, Texas 78704

Ed Haidenthaller

1193 East 800 North

Common

10,000**

<1.0

Layton, Utah 84040

Paul Crow

1185 East 5840 South

Common

10,000***

<1.0

Salt Lake City, Utah 84121

All Executive Officers and Directors

as a Group (3)

Common

2,080,000

36.4

* Ruairidh Campbell ~~has~~holds ~~also been granted~~ 500,000 vested options to purchase 500,000 common shares at $0.35 ~~all of which were~~.

** Ed Haidenthaller holds 50,000 vested asoptions ofto ~~December~~purchase 3150,000 ~~2013~~common shares at $0.35.

** Ed* Paul ~~Haidenthaller~~Crow ~~has~~holds ~~also been granted~~ 50,000 vested options to purchase 50,000 common shares at $0.35 ~~all of which were~~.

vested as of December 31, 2013.

*** Paul Crow has also been granted 50,000 options to purchase common shares at $0.35 all of which were vested as

of December 31, 2013.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND

DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

None of our directors or executive officers, nor any person who beneficially owns, directly or indirectly,

shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any

members of the immediate family (including spouse, parents, children, siblings, and in−laws) of any of the

foregoing persons has any material interest, direct or indirect, in any transaction in the period covered by

this report or in any presently proposed transaction which, in either case, has or will materially affect us.

except the following consulting agreement, rent provision and option grants:

§ Ruairidh Campbell, sole executive officer and a director, entered into an executive agreement dated

July 1, 2013 for a monthly fee of $10,000 and additional stock options not yet granted.

§ Ruairidh Campbell, sole executive officer and a director, entered into a month to month

arrangement pursuant to which Allied pays $1,000 a month for the use of an office owned by Mr.

Campbell that is inclusive of associated office costs.

Director Independence

Allied is quoted on the OTC Bulletin Board inter-dealer quotation system, which does not have director

independence requirements. However, for purposes of determining director independence, we have applied

the definitions set out in NASDAQ Rule 4200(a)(15). NASDAQ Rule 4200(a)(15) states that a director is

not considered to be independent if he or she is also an executive officer or employee of the corporation.

Accordingly, we consider Mr. Haidenthaller to be an independent director.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The following is a summary of the fees billed to us by Jones Simkins LLC (“Jones Simkins”) for

professional services rendered for the past two fiscal years:

Auditors’ Fees and Services

2014

2013

2012

Audit fees

40,~~200~~245 $

40,200

Audit-related fees

Tax fees

7,030

6,525

6,835

All other fees.

Total fees paid or accrued to our principal accountants $

4647,~~725~~275 $

4746,~~035~~725

Audit Fees consist of fees billed for professional services rendered for the audit of our financial statements

and review of the interim financial statements included in quarterly reports and services that are normally

provided by Jones Simkins in connection with statutory and regulatory filings or engagements.

Audit Committee Pre-Approval

All services provided to Allied by Jones Simkins as detailed above, were pre-approved by Allied’s audit

committee. Jones Simkins performed all work only with their permanent full time employees.

3837

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) ~~Consolidated~~ Financial Statements

The following documents are filed under “Item 8. Financial Statements and Supplementary Data,” pages

F-1 through F-1920, and are included as part of this Form 10-K:

Financial Statements of Allied for the years ended December 31, ~~2013~~2014 and ~~2012~~2013:

Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statement of Stockholders’ Equity

Statements of Cash Flows

Notes to Financial Statements

Schedules of Supplementary Information on Oil and Gas Operations

(b) Exhibits

The exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on

page 4140 of this Form 10-K, and are incorporated herein by this reference.

(c) Financial Statement Schedules

We are not filing any financial statement schedules as part of this Form 10-K because such schedules are

either not applicable or the required information is included in the financial statements or notes thereto.

3938

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant

has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~Pursuant~~

to the requirements of Section 13 or 15###d) of the Securities Exchange Act of 1934, the registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

by the undersigned, thereunto duly authorized.

Allied Resources, Inc.

Date

/s/ Ruairidh Campbell

March 31, 2014

By: Ruairidh Campbell

April 15, 2015

Its: Chief Executive Officer, Chief Financial Officer, Principal

Accounting Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by

the following persons on behalf of the registrant and in the capacities and on the dates indicated.~~Pursuant to~~

the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

Date

/s/ Ruairidh Campbell

March 31, 2014

Ruairidh Campbell

Chief Executive Officer, Chief Financial Officer, Principal Accounting

April 15, 2015

Officer and Director

/s/ Ed Haidenthaller

~~March~~April 3115, ~~2014~~2015

Ed Haidenthaller

Director

/s/ Paul Crow

Paul Crow

~~March~~April 3115, ~~2014~~2015

Director

4039

INDEX TO EXHIBITS

Exhibit

Description

3.1*

Articles of Incorporation dated February 12, 2002 (incorporated by reference to the Form

10-SB/A filed on April 21, 2003).

3.2 *

Bylaws (incorporated by reference to the Form 10-SB/A filed on April 21, 2003).

10.1 *

Oil and Gas Well Operating Agreement between Allied and Allstate Energy Corporation

dated May 1, 1996 (incorporated by reference to the Form 10SB/A filed on April 21, 2003).

10.2 *

Amendments to Operating Agreements between Allied and Allstate Energy Corporation

dated May 10, 1996 (incorporated by reference to the Form 10SB/A filed on April 21,

2003).

10.3 *

Form Gas Purchase Agreement (incorporated by reference to the Form 10SB/A filed on

April 21, 2003).

10.4*

Executive Agreement between Allied and Ruairidh Campbell dated July 1, 2013. filed on

March 31, 2014.

14 *

Code of Ethics adopted May 3, 2004 (incorporated by reference to the Form 10-KSB filed

on May 26, 2004).

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule

13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002 (attached).

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18

U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(attached).

99.1 *

Allied Resources, Inc. 2008 Stock Option Plan (incorporated by reference to the Form 10-Q

filed on November 14, 2008).

99.2

Reserve report from Sure Engineering, LLC (attached).

101. INS

XBRL Instance Document^†

101. PRE

XBRL Taxonomy Extension Presentation Linkbase^†

101. LAB

XBRL Taxonomy Extension Label Linkbase^†

101. DEF

XBRL Taxonomy Extension Label Linkbase^†

101. CAL

XBRL Taxonomy Extension Label Linkbase^†

101. SCH

XBRL Taxonomy Extension Schema^†

Incorporated by reference to previous filings of Allied.

^†

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed

“furnished” and not “filed” or part of a registration statement or prospectus for purposes of

Section 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for

purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not

subject to liability under these sections.

4140

Filing Compare · ALLIED RESOURCES INC