IRVINE, Calif., Nov. 1, 2010 (GLOBE NEWSWIRE) -- UniversalBioenergy Inc. (Pink Sheets:UBRG), is in final stage negotiations with ProGas Energy Services Inc., of Texas, to jointly develop a newly discovered oil and gas field located in Texas's Gulf Coast natural trend, in Jim Wells County Texas. The plans include potentially developing up to 110 oil and gas wells from this field, to supply gas to Universal's 22 major public utility customers nationwide. Three initial wells have been drilled, are proven, that are producing oil and gas, and should bring immediate profit to Universal.
According to ProGas, the field was originally discovered in the 50's and was thought to be a small extension of the Northwest Premont field. However, the field was not developed before the previous operators passed away, and many zones were not known to be potentially productive as have been recently proven with modern drilling and testing techniques. ProGas, the operator and developer of the property, prior to Universal's involvement, re-entered existing wells that were abandoned by the previous operator to test potential zones for production. Initial estimated reserves of the field were under 2,000,000 bbls of oil and just over 4,000,000 mcf of natural gas. However after testing these wells and a considerable geologic study, the projected and estimated reserves were adjusted to over 20,000,000 barrels of oil and 17 billion cubic feet (bcf) of gas from 11 potentially productive oil and gas sands.
Recently, ProGas drilled three additional wells, testing them with modern well logging and testing techniques for potential hydrocarbon production in zones hitherto untested. After drilling and testing of these wells, the previously estimated gas reserves appear to represent far less than the potential oil and gas reserves that might be present in the field. These three drilled wells proved up, and an additional 8 gas sands which represent considerable gas and oil reserves and potential production. These tests in the newly drilled wells indicate that the field has an unusual number of stacked oil and gas sands, and an unusual amount of reserves for wells of such a shallow depth (under 4000'), with one of the wells testing 14 potential oil and gas sands. Though reserve studies are underway for the initial wells and the field, the potential reserves offered in the first three wells drilled could be the equivalent of wells drilled to three times the depth of these wells, and the wells can be drilled for considerably less expense than wells drilled to such depths.
"We're very excited about partnering with ProGas Energy in this new venture. ProGas has developed over 2000 oil and gas wells, and they have over 200 years of combined experience in the oil and gas industry. Natural gas is a clean burning alternative fuel, and we believe its use will grow in electric power generation and natural gas vehicles. We also believe, our stock is highly undervalued, especially since, through our NDR Energy subsidiary, we have gas supply contracts with 22 major utilities such as National Grid, PG&E, Southern California Gas, CenterPoint Energy Resources, and of our pending $10.4 million acquisition of Roblex. Universal's exploration costs for its share of the field is estimated at less than 10% of the current NYMEX price for October, which is $3.40 per mcf, allowing us to earn a 90% gross profit, or $3.00 per mcf at current prices, on the spread of gas that we'll own in the field and sell to our customers. The Management of NDR Energy Group believes they can sell an estimated $1 billion of natural gas in the next 12 to 18 months," says Universal's Sr. V.P., Solomon Ali.
The final terms and conditions of the transaction will be determined in the definitive agreement, which is subject to, among other things, final due diligence by Universal, and other conditions, and approvals by both companies' management and board of directors. No assurances can be provided that a definitive agreement will be executed. No assurances can be made 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.
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CONTACT: Universal Bioenergy Inc. Media Relations Nicole Singletary 888-263-2009