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Universal Bioenergy In Advanced Negotiations For Major Agreement To Export Coal To China

IRVINE, Calif., April 5, 2013 (GLOBE NEWSWIRE) -- Universal Bioenergy Inc., (OTCMarkets:UBRG), a publicly traded independent diversified energy company, that markets natural gas, petroleum and coal, is in advanced negotiations for an agreement with a company in China to sell them large quantities of high thermal steam coal for electric power production. The agreement is expected to have provisions to expand the sales of coal from $108 to $270 million annually based on their growing demand.

The Company is intending to sell an estimated 1,200,000 to 3,000,000 tons of high grade thermal steam coal per year for the next 3 years for export to the company in China. The total estimated amount of coal to be delivered for the next 3 years is estimated at 3,600,000 to 9,000,000 tons at an estimated $90.00 per ton. The total estimated value of the transaction is $324 to $810 million over the next 3 years.

According to the International Energy Agency (IEA) in its annual Medium Term Coal Market Report, coal's share of the global energy mix continues to rise, and by 2017, coal will come close to surpassing oil as the world's top energy source. The report says China and India lead the growth in coal consumption over the next 5 years, with China surpassing the rest of the world in coal demand during the outlook period.

Universal's Senior Vice President Solomon Ali states, "We are forecasting the sales of coal could generate an estimated $12 to $36 million in annual earnings. We cannot guarantee an actual valuation, however according to industry valuation standards using average P/E ratios from Standard & Poor's, at a multiple of 15 times earnings, a valuation of $180 to $540 million dollars is an estimate of the potential additional market capitalization value of this transaction to Universal.  Although we can provide no assurances the negotiations will result in a completed transaction, we believe these estimated earnings should have a positive impact on the value of the Company and the price of our stock."

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