Universal Bioenergy Inc. (UBRG), a publicly traded independent diversified energy company, that markets natural gas, propane, and produces petroleum and coal, has begun selling commercial coal from the Whitesburg Friday Branch Mine in Whitesburg, Kentucky and is expected to begin generating cash flow. The Company forecasts the sales of coal should generate an estimated average of $52.80 million in revenues and an estimated $5 million to $8 million in earnings annually.
On February 28, 2012, the Company announced that it closed the transaction for the acquisition of a 40% stake in the Whitesburg Friday Branch Mine LLC, a producer and provider of thermal steam coal in eastern Kentucky. Thermal/Steam non-coking coal is used as a primary source of energy for coal fired powered plant electric generation. Universal will market the "Thermal/Steam" coal to sale to its electric utility customers for power generation. The transaction is projected to generate over $264 million in estimated revenues for the Company over the next 5 years.
On June 6, 2012, the Company announced that its Board of Directors declared a 20% common stock dividend to its shareholders on a 10 for 2 basis. As a reward to its shareholders for their loyalty, the plan would pay or issue 2 new shares of common stock, for every 10 shares of common stock held by all shareholders of record as of July 13, 2012, providing the shareholders with an immediate 20% return.
Universal's President Vince M. Guest states, "Since we closed the Whitesburg Mine acquisition in February, we immediately opened up the mine for operations, and began to stockpile inventories of coal. The mine is now in full operations six days per week for the mining of coal. The coal is being processed and blended from different qualities to obtain the maximum price for the coal. We believe the additional revenue from the sales of coal will strengthen our financial position, and help position us to up-list the Company to NASDAQ.
The forecasted sales of coal is an average of $52.80 million annually. The potential earnings to be generated from this acquisition is estimated at $5 to $8 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 $75 to $120 million dollars is an estimate of the potential additional market value of the earnings to Universal."
