Universal Bioenergy Has Contract to Start Coal Sales and Begin Cash Flow From Whitesburg Mine

Universal Bioenergy Inc., (OTCMarkets:UBRG.PK – News), a publicly traded independent diversified energy company, that markets natural gas, propane, and produces petroleum and coal, expects to begin selling commercial coal from the Whitesburg Friday Branch Mine in the third week of March and begin generating cash flow. The Company forecasts the sales of coal should generate an estimated $52.80 million in revenues and an estimated $5 million to $8 million in earnings annually.

The Company has an agreement in place to begin selling thermal steam coal to a subsidiary of the sixth largest metallurgical coal producer in the U.S., with an annual volume of more than 4 million tons.

Universal will be purchasing the coal from Whitesburg and selling it directly to the coal producers and electric power utility customers. The Company, through Whitesburg, currently has over 3 million tons of recoverable coal under contract in the Elkhorn No. 3 Seam in Letcher County, Kentucky. The estimated production and extraction costs of the higher grade thermal/steam coal are $38 to $40 per ton, which would be sold at $75 per ton. The estimated production and extraction costs for the lower level coal are $22 per ton which would be sold at $50 per ton. The Whitesburg Friday Branch Mine is projected to generate over $264 million in revenue for the Company from the sales of thermal steam coal over the next five years. The expected near term generation of cash flow will help fuel the Company’s plans for further growth and expansion.

Universal’s President Vince M. Guest states “This is a major turning point for the Company since Whitesburg has obtained all of the state permits and completed all of the required land reclamation. This puts our coal production and sales about one month ahead of schedule. The drilling and blasting in preparation for removal of coal is ongoing, and blasting for cutting of new roadwork for trucks to access other areas of the mine. The annual estimated sales from coal are an average of $52.80 million. The potential earnings from coal sales is estimated at $5 to $8 million annually for Universal. 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 $75 to $120 million dollars is an estimate of the potential additional market value of the earnings to Universal.”

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

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