IRVINE, Calif., Sept. 26, 2011 (GLOBE NEWSWIRE) -- Universal Bioenergy Inc. (Pink Sheets:UBRG) has signed a Letter of Intent with a company in Knoxville, Tennessee to acquire a thermal coal mining operation in eastern Kentucky. The joint venture would entail Universal acquiring a major stake in an existing mining operation, and includes provisions for Universal to develop the oil and natural gas potential on the property.
Universal's management has been in advanced discussions since June to acquire an interest in the thermal coal production and mining company. Thermal coal is used as a primary source of energy for coal fired steam power generators in electric utility plants. The mining operations are the surface and high wall mining type, and does not include any underground mining. The target company already has the leases for the mineral rights for the coal and the required mining permits from the state of Kentucky.
According to the American Coal Foundation, 9 out of every 10 tons of coal mined in the United States today is used to generate electricity, and more than half of the electricity used in this country is coal-generated electricity. The Energy Information Administration says coal as a fuel source for electricity generation will increase 25% by 2035 in the United States. Additionally, gas to liquid processes can use coal as a source for many chemical compounds for the chemical, polymer and other industries. Another advantage in the expanding efforts of using clean coal technology will be to increase demand for coal as the source to produce synthetic natural gas (syngas).
Vince M. Guest, Universal's President says, "Our goal is to be one of the largest independent diversified energy companies in the country, and this move will help us to meet that goal. Since NDR Energy Group already sells natural gas to our major utility customers to generate electricity, thermal coal for power generation will give us another energy product to sell to our expanding base. We believe this acquisition could result in millions of dollars in revenues and profits for the company. The name of the company, the projected revenues, profits and financial impact that this acquisition will have on Universal will be indicated after the formal agreement is signed. We anticipate having a definitive agreement signed very soon."
The final terms and conditions of the joint venture are being negotiated and will be determined in the definitive agreement. No assurances can be provided that a definitive agreement will be executed. Execution of a definitive agreement is subject to, among other things, confirming due diligence by Universal, standard regulatory approvals and other conditions and approval by either or both companies' management and Board of Directors.
About The Company
Universal Bioenergy Inc. is an alternative energy company, and intends to create and market natural and alternative energy sources including natural gas, solar, biofuels, wind, synthetic fuels and related energy technology products. It plans to build the company into a prominent player in alternative energy.
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