Universal Energy Group Ltd.

Universal Energy Group Ltd.

June 12, 2008 06:00 ET

Universal Energy Group Announces Initiation of Quarterly Dividend

TORONTO, ONTARIO--(Marketwire - June 12, 2008) - Universal Energy Group Ltd. (the "Company") (TSX:UEG) today announced that its Board of Directors has unanimously approved a quarterly dividend policy and has declared the Company's first quarterly cash dividend of $0.1875 per common share. On an annual basis, the cash dividend is expected to be $0.75 per common share. "We are pleased that the Company's financial position and prospects have allowed our Board of Directors to approve a quarterly dividend policy. The dividend policy underscores the Company's maturation and strong cash flow generation profile while still allowing us to aggressively pursue value creating growth opportunities" said Mark Silver, President, Electricity and Gas Marketing. The Company's first dividend payment will be paid on September 30, 2008 to shareholders of record on September 15, 2008. This dividend is designated as an "eligible dividend" for Canadian income tax purposes. While the Board of Directors currently expects to declare dividends quarterly and has determined that this level of dividend is appropriate based on the Company's current financial performance, liquidity and outlook, the declaration and payment of future dividends is subject to the discretion of the Board of Directors after considering the Company's financial results and condition, and other factors it determines to be relevant at the time.

The decision to initiate a dividend came after an extensive review of the Company's capital structure supported by the analysis of its financial advisors, National Bank Financial. It was determined that a dividend would provide cash flow to shareholders as the Company is now at a stage where both its retail energy business and its ethanol operations ("TGF") are positioned to generate high levels of cash flow. TGF plant economics remain strong and are further supported by the Canadian government's ethanol blending mandate set to take effect in 2010. In addition, the Company will continue to focus on the most attractive market opportunities such as its residential HVAC services opportunity in Ontario.

Mark Silver added, "Under the revised business model we expect increased growth and focus in our home services initiative, a more measured level of growth in our retail energy business with emphasis on the highest value energy markets and strong cash flow from the commencement of ethanol production at our Belle Plaine facility."

This press release contains ''forward-looking statements''. Statements other than statements of historical fact may be forward-looking statements, including, without limitation, management's expectations, intentions and beliefs concerning the industries in which the Company operates, the competitive landscape in these industries and the general economy, statements regarding the future financial position or results of the Company, business strategies, proposed acquisitions, growth opportunities, budgets, litigation, projected costs and plans and objectives of or involving the Company. Wherever possible, words such as ''may'', ''would'', ''could'', ''will'', ''anticipate'', ''believe'', ''plan'', ''expect'', ''intend'', ''estimate'', ''endeavour'', ''project'', ''continue'' and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation, those listed in the ''Risk Factors'' section of the Company's filings with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this press release. Undue reliance should not be placed on the forward-looking statements. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update these forward-looking statements except as expressly required by applicable securities law.

Universal Energy Group's common shares are listed on the Toronto Stock Exchange under the symbol "UEG". Universal Energy Group through its subsidiary Universal Energy Corporation, sells electricity and natural gas in Ontario and natural gas in British Columbia to residential, small to mid-size commercial and small industrial customers. Universal Energy Group through its subsidiary Universal Gas & Electric Corporation, sells natural gas in Michigan to residential, small to mid-size commercial and small industrial customers. Universal Energy Group through its subsidiary National Energy Corporation, operating under the trade name National Home Services, offers Ontario residential customers a long term water heater rental program. Universal Energy Group through its subsidiary Terra Grain Fuels Inc., operates an ethanol facility in Belle Plaine, Saskatchewan that is designed to produce approximately 150 million litres of ethanol annually. Additional information about Universal Energy Group is available on SEDAR (www.sedar.com).

Contact Information

  • Universal Energy Group Ltd.
    Stephen Plummer
    Chief Financial Officer
    (416) 673-1160
    Email: splummer@uegl.ca
    Universal Energy Group Ltd.
    Shawn Dym
    Vice President, Business Development & Investor Relations
    (416) 673-4761
    Email: sdym@universalenergy.ca