SOURCE: US Energy Initiatives Corporation

January 30, 2007 06:18 ET

US Energy Enters Agreement Granting Exclusive Domestic U.S. Rights to BAF Technologies

Partnership Will Also Join Forces to Gain CARB Tier III Certification as Emission Control Device

TAMPA, FL -- (MARKET WIRE) -- January 30, 2007 -- US Energy Initiatives Corporation ("US Energy" or the "Company") (OTCBB: USEI), an ISO-9001 certified manufacturer of a patent dual-fuel system (the "Hybrid System") today announced an agreement in principal with BAF Technologies ("BAF") to grant exclusivity for portions of the domestic United States for sales of the Company's patent dual-fuel diesel to natural gas technology. In addition, USEI will join its Hybrid System together with BAF's SmartMuffler technology in a program to achieve a California Air Resource Board (CARB) Tier III Certification as an emission control device.

"This agreement with BAF marks our first major domestic US push to deploy our technology," said USEI CEO Mark Clancy. "We have enjoyed a long and rewarding relationship with BAF for several years and it is a pleasure to expand our business relationship. Our Chief Operating Officer Phil Rappa negotiated the general terms of our agreement underwhich we will be granting BAF exclusive rights for the Southwestern US including California and Northeastern US including New York. To start the program, BAF will be providing two Cummins engines which will be converted with USEI's dual fuel system and BAF's SmartMuffler technology. It is our common objective to achieve a CARB Tier III certification for this configuration which will make our system available for sale anywhere within the United States. While we are excited about our many advances in deploying our technology in the international marketplace, this represents the first and best opportunity to match our foreign activity with a strong domestic program," concluded Mr. Clancy.

"BAF is excited to enter into a new phase of our relationship with USEI," says John Bacon, BAF's president. "We have each been pushing the industry forward as we have continued to innovate, and this deeper relationship will continue that tradition. With exclusivity in the northeast and southwest including California, we will be able to focus on key, growing markets. Of particular interest are the ports of California which have been allocated more than $2B to improve air quality. A major focus of which addresses the more than 2300 off road yard trucks which are all viable targets for this dual-fuel system. The opportunity is tremendous."

About US Energy Initiatives Corporation (OTCBB: USEI)

US Energy, formed in 1996, commercializes a patent dual-fuel diesel to natural gas conversion technology through the automotive aftermarket and through certain original equipment manufacturers. The Company's facilities include a state-of-the-art systems development and testing lab in PeachTree City, Georgia and an ISO-9001 certified manufacturing facility in Tampa, Florida.

About BAF Technologies

BAF Technologies is the premier provider of natural gas and propane vehicle conversions. Founded in 1992, and headquartered in Dallas, Texas, the company supports global clients with alternative fuel systems (both LPG and CNG), application engineering, technical training, service parts, technical consulting, research and development, design, and engineered products. During the past decade, the company has been the leader in marketing and systems integration for niche markets within the Alternative Fuel Vehicle (AFV) industry.

Investors are cautioned that certain statements contained in this document are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "believes," "anticipates," "intends," "plans," "expects" and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future US Energy Initiatives actions, which may be provided by management, are also forward-looking statements as defined by the act. These statements are not guarantees of future performance.

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