IRVINE, Calif., Oct. 13, 2010 (GLOBE NEWSWIRE) -- Universal Bioenergy Inc. (Pink Sheets:UBRG), an energy company, has signed a Letter of Intent with ProGas Energy Services Inc., of Texas, to jointly develop a newly discovered or recently discovered oil and gas field located in Texas's Gulf Coast natural trend in Jim Wells County, Texas. The plans include the development of ten initial wells, and the potential development of up to 110 oil and gas wells from this field, to supply oil and natural gas for Universal's customers nationwide.
This joint venture is a major step for the Company and has three major benefits to Universal and its shareholders. First, it allows Universal to acquire natural gas reserves from the ground, for a small fraction of the purchase costs that it currently pays to other producers, that it markets natural gas for. Second, it would provide Universal with a source of natural gas of its own, which can be marketed to its major utility gas customers throughout the U.S. While most gas marketers are limited to a 1% to 2% profit on the spread of natural gas prices, (less than 1 cent per mcf), Universal's exploration costs for its share of the field is estimated to be less than 10% of the current NYMEX price for October, which is $3.40 per mcf, allowing Universal to earn a 90% gross profit, or $3.00 per mcf at current prices, on the spread of gas that it owns in the field and that it sells into the market place. This will give Universal a distinct advantage in the marketplace and a considerably higher profit margin for gas that is sold to its customers. Third, while many gas marketing companies have to buy gas from others, their ability to purchase gas is somewhat subject to availability. Universal will be able to supply the natural gas produced, that it owns, as well as the natural gas of the other industry partners in the development of the field, such as Progas Energy, who have offered Universal the right to market their gas.
"We're very excited about working with ProGas Energy Services on this development project. We intend to move very quickly towards negotiating a final signed agreement. We feel this is another monumental step towards building greater value for our shareholders", says Universal's Sr. Vice president Solomon Ali.
The final terms and conditions of the transaction 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, and other conditions and approvals by both companies' management and board of directors. No assurances can be made that the estimated amount of gas will be reached or the NYMEX price will be maintained.
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.
The Universal Bioenergy Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6784
- There are matters discussed in this media information that are forward looking statements within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. Such statements are only forecasts and actual events or results may differ materially from those discussed. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to Universal Bioenergy Inc.'s most recent annual report and accounts and other SEC filings. The company undertakes no obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
CONTACT: Universal Bioenergy Inc. Media Relations Nicole Singletary 888-263-2009