SOURCE: KAL Energy, Inc.

May 03, 2007 08:00 ET

KAL Energy, Inc. -- Shipping Cost Forecast to Fall 40% by 2010, Boosting Profitability of Its Thermal Coal Business

LONDON -- (MARKET WIRE) -- May 3, 2007 -- KAL Energy, Inc (OTCBB: KALG) (FRANKFURT: D9T) is pleased to report that a recent Bloomberg article (30-Apr, 2007) stated, "Japan, China and South Korea will produce so many vessels that shipping costs, now at an all-time high, will fall 40 percent by 2010, according to futures contracts traded privately between banks, transportation companies and hedge funds."

"For KAL Energy this is great news as the thermal coal export business is sensitive to transportation cost. Should these forecast be realized, we will directly benefit from the reduced shipping cost of our thermal coal, yielding a more profitable business model, and a stronger earnings outlook," stated Cameron Reynolds, KAL Energy's CEO.

KAL Energy recently announced the completion of over 3,000 meters of drilling of its Phase I exploration program. The company has exhibited an increase in productivity due to the build up of its on site infrastructure and personnel. The company anticipates the completion of Phase I within this quarter.

The full article is available at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAW3OMv9Kus8

KAL Energy's wholly owned subsidiary, Thatcher Mining Pte. Ltd., has the rights to two coal concessions situated near the Mahakam River in North Eastern Kalimantan, Indonesia. This river is a main transportation system for transporting coal to nearby markets. Consulting Geologist, Jonathan O'Dell, has estimated that blocks 16 & 24 could contain over 192,000,000 tons of thermal coal. With one of the world's largest thermal coal exporters Kaltim Prima Coal (KPC) as its neighbor, KAL Energy's concessions are in a region that is known for its extensive open pit thermal coal producing mines. Indonesia has recently surpassed Australia as the world's leading thermal coal exporter, with prices varying from $30.00 to $60.00 plus per ton.

For more information on KAL Energy, Inc. please visit our web site at www.kalenergyinc.com

Notice Regarding Forward-Looking Statements

This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future.

Contact Information

  • Contact:
    Cameron Reynolds
    CEO
    KAL Energy, Inc
    93-95 Gloucester Place
    London, W1U 6JQ
    Telephone: +44 207 487 8426
    Fax: +44 207 487 8402
    US Investor Relations Line: +1-866-680-2575