IRVINE, CA--(Marketwired - Apr 29, 2014) - Universal Bioenergy Inc., (OTCQB: UBRG), a publicly traded independent diversified energy company, that markets and distributes natural gas, petroleum, coal and electricity, is moving forward in its discussions and contract negotiations for a joint venture with a company to develop a global energy order fulfillment platform. The companies plan to engage in the physical and financial purchasing, sales and trading of natural gas, electricity, petroleum and related energy commodities to generate greater revenues and profits.
Universal Bioenergy is forecasting that an estimated $100 million in annual revenues could be generated through the joint venture from the financial trading from the energy contracts. The estimated profits from the joint venture are in the 2% to 20% range, or an estimated $2 to $20 million annually. Final contract negotiations are ongoing to finalize the terms of the joint venture and a definitive agreement.
Due to recent changes in part to the sweeping Dodd-Frank financial regulatory overhaul and the Volcker Rule, the Company is positioning itself to take financial advantage of the new opportunities in the marketplace for financial trading of energy contracts.
The proposed joint venture partners are positioning themselves to purchase and sell energy commodities in North America, Europe and the global energy markets. The parties plan to utilize highly experienced energy traders to engage in the physical and financial trading of natural gas, electricity, petroleum, diesel fuel and jet fuel. The venture partners plan to purchase and trade energy contracts on the spot and long-term market, and trade financial futures and power contracts to generate higher revenues, margins and earnings.
To hedge against the associated risks of physical and financial trading, the parties may use financial derivatives and other contracts. The portfolio of energy contracts will emphasize the purchasing of energy product commodities such as natural gas, petroleum, diesel fuel, jet fuel and electricity. The proposed alliance allows Universal Bioenergy to access a relationship with an energy trading company that has its own established energy order fulfillment platform.
Universal's Senior Vice President Solomon Ali says, "We feel very strong about this proposed joint venture in the buying and selling of energy commodities and futures contracts. The energy commodities order fulfillment platform has already been designed, built and is being tested. We are forecasting $100 million in annual revenues for the Company from this joint venture. The potential earnings for Universal is estimated at $2 to $20 million annually. Although we cannot guarantee an actual valuation, according to industry valuation standards using average P/E ratios from Standard & Poor's, at a multiple of 15 times earnings, a valuation of $30 to $300 million dollars is an estimate of the potential additional market value of the earnings to Universal. We feel this should have a very positive impact on our stock price and our shareholders."
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 Bioenergy, 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.
About Universal Bioenergy Inc.
Founded in 2004, Universal Bioenergy Inc., is a publicly traded independent diversified energy company that produces and markets natural gas, petroleum, coal and propane. We market energy resources to the largest public utilities, electric power producers and local gas distribution companies in the U.S., that serve millions of commercial, industrial and residential customers. We are also engaged in the acquisition and development of existing or recently discovered oil and gas fields, leases and surface coal mines. For more information visit www.universalbioenergy.com
Safe Harbor Statement - 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.