SOURCE: Modern Energy Corp.

October 11, 2007 05:56 ET

Modern Energy Moves up Date to Pay Reduced Class B Preferred Dividend to Shareholders of Record on October 16, 2007

99.9% Reduction in Public Float to Result Without Reverse Split

LOS ANGELES, CA--(Marketwire - October 11, 2007) - Modern Energy Corp. (PINKSHEETS: MODR) (FRANKFURT: ME2) announced today that it will pay a dividend of 100 (instead of 1000) Class B preferred shares for every common share held on a record date of October 16, 2007. The preferred shares (CUSIP 607586 203) will bear a par value of $0.00001 per share with full voting rights. (This announcement replaces the previously announced record date of Nov. 1, 2007.)

The company cautions its shareholders to cancel, before market opening on Oct. 16, any GTC orders to sell shares. This is necessary so that no shareholder will inadvertently end up in a short position.

This dividend is part of a mandatory exchange structured to reduce the Company's public float without reducing current shareholders' interest. Each 1,000 common shares currently held will be surrendered in exchange for 100,000 preferred shares and 1 common share. The result will be a 99.9% reduction in the public float, without a reverse split.

The shareholders will retain both tradable common shares and tradable preferred shares. This action changes the capital structure without a reverse split because all shareholders will retain the same relationships. The preferred shares will be convertible at the rate of 100,000 preferred to 1 common upon payment of $1.00 per common share. Converting preferred shares is not required by shareholders, but it may become economically advantageous to convert as the company progresses in its business plan. However, no payment or action is required by shareholders to participate in and benefit from this mandatory exchange and preferred dividend.

Natural Gas Well Production Update

Modern Energy has recently noted progress in its development of the Company's oil and gas interests in Oklahoma. Through an 80%-owned subsidiary, the Company has a major corporate partner that is one of the largest independent natural gas producers in the United States and is in the process of developing a very promising well with production expected to start before the end of October 2007. In addition, the Company's subsidiary announced that its dewatering of its currently producing natural gas well has yielded a significant production increase. Details will be reported in a few weeks when the gas flow has stabilized.

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About Modern Energy Corporation:

Modern Energy Corp. (PINKSHEETS: MODR) (FRANKFURT: ME2) founded in 1996, is a development stage investment company with interests in oil and gas in Oklahoma, land in the Philippines, and marketable securities. The Company is currently producing natural gas and plans to increase the development of natural gas wells in Oklahoma. The Company's Philippines subsidiaries have land and mining interests on the island of Mindanao.

The Company's restructuring is based on patent pending business methods developed by New Compendium Corp. (NCC) and used by Modern Energy under license from NCC.


This press release contains forward-looking statements that involve risks and uncertainties. The statements in this release are forward-looking statements that are made pursuant to safe harbor provision of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause Modern Energy Corporation's actual results in future periods to differ materially from results expressed or implied by forward-looking statements. These risks and uncertainties include, among other things, development costs and risks, product demand and market competition. You should independently investigate and fully understand all risks before making investment decisions.

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