Universal Bioenergy, Inc. (Pink Sheets: UBRG)

Universal Bioenergy, Inc. (Pink Sheets: UBRG) is engaged in the production of renewable fuels, with a focus on biodiesel fuel, in the United States. Its subsidiary, Universal Bioenergy North America, Inc. operates its first biodiesel refinery in Mississippi. The refinery intends to produce biodiesel fuel by using various vegetable oils such as soy oil, canola oil, and also various premium greases as raw material, processing through Universal's highly economical, unique and efficient process. The company also plans to distribute petroleum/biodiesel blended fuel, such as B2 and B20, through wholesale distributors, truck stops, fueling stations and through other distribution networks. The comapny's Mississippi refinery provides strategic access to major inland ports, railway hubs, highway intersections, and trucking destinations. The Company also benefits from the small footprint of its refinery, which provides UBRG with potentially lower energy costs than similar biodiesel producers.

UBRG is working to obtain the necessary permits to begin operating its refinery and expects to commence production at 20,000 gallons every three to four days within the next 90 to 120 days, pending acquisition of sufficient working capital to make minor but necessary final plant upgrades. Following these modest capital expenditures, the Company expects to ramp up biodiesel production to 30,000 gallons per day, or approximately 11 million gallons annually. With biodiesel (B100 variant) currently selling from refineries (rack price) at around $4 per gallon on average, this would imply annualized revenues quickly rising to a $44 million range. At full capacity, the refinery could be producing 120,000 gallons per day, or 35 million gallons annually, and generating annualized revenues from biodiesel sales exceeding $140 million annually, assuming $4 per gallon biodiesel prices.

Experienced Leadership

The Company's CEO, Dr. Richard Craven, has more than 14 years of high-level business management experience and more than nine years of marketing experience. He also taught at the university level for nearly two decades. Through much of his career, Dr. Craven has focused on developing environmentally-friendly fuels and alternative energy sources.

Dr. Craven worked as the lead chemical researcher and developer at Antek Research Inc., an environmentally focused nonprofit research firm. His research efforts focused on optimizing and improving biodiesel reactions and production, the use of reaction by-products, waste-to-fuel conversion, and waste conversion to other useful products.

By purchasing an existing production facility that was in bankruptcy proceedings, UBRG was able to acquire a nearly ready-to-operate plant at a fraction of Greenfield costs and gain access to a labor pool of experienced managers and technical staff.

Technology and Competitive Advantages

Universal Bioenergy uses a proprietary production process called Dynamic Vibration Fusion Process (DVFP), which could cut processing time by 40%-50%, potentially resulting in huge production cost savings compared to similar-sized competitors. In addition, the Company anticipates soon signing an agreement for one of two new second-generation technologies which could enable UBRG to produce biodiesel at temperatures of 110 degrees versus the industry norm of 145 degrees Fahrenheit, resulting in sizable energy cost savings. 

Sizable, growing domestic biodiesel market

Global biofuel sales were $20.5 billion in 2006 and are forecast to reach $80.9 billion by 2016. The U.S. is expected to emerge as the world's largest biodiesel market, accounting for 19% of global consumption by 2012. Domestic biodiesel production is growing rapidly, rising from 28 million gallons in 2004 to 490 million gallons in 2007. U.S. demand for biodiesel is expected to exceed 800 million gallons by 2010. EPA regulations, tax incentives and environmental concerns about diesel fuel exhausts are encouraging biodiesel use in North America. Biodiesel provides fuel efficiency, power, torque and haulage rates comparable to conventional diesel with better lubrication that extends engine life. Biodiesel can be blended with diesel in any concentration, from 0 to 100% (B100), and used without major diesel engine modification. Rising crude prices, combined with tax incentives for biofuels, are helping biodiesel emerge as an affordable, eco-friendly alternative to conventional diesel fuel.

Strategically located refinery

UBRG's processing facility is located in the south central region of the U.S. and is strategically located for easy access to feedstock supplies and fuel distributors. The facility is located in northeastern Mississippi, 125 miles southeast of Memphis, and is readily accessible via water, air, road, and rail transport. The area, known as "America's Distribution Center," hosts the world's largest cargo airport, the nation's second largest inland port, is a major rail hub, and is at the crossroads of major highways. In addition, the refinery's proximity to large marinas is a sales advantage for UBRG since marine biodiesel is typically priced $1 higher than truck biodiesel.

Production gains boost revenue visibility

The biodiesel refinery is located on a 4.3-acre site and offers ample space for expansion and diversification. The Company expects to commence production at 20,000 gallons every three to four days within the next 90 to 120 days. Following modest capital expenditures, the Company expects to ramp up production to 30,000 gallons per day. UBRG has four jacketed reactors, each with a capacity of 50,000 gallons, allowing the production of 30,000 gallons of biodiesel per batch per reactor. Once all four reactors are online, the Company anticipates increasing production to 120,000 gallons per day or about 35 million gallons annually, within 24 months. Following the implementation of this plan and assuming $4 per gallon biodiesel prices, UBRG's revenues could rapidly expand from our anticipated level of $44 million in its first full year of operation to an annualized rate of $140 million within two years.

Efficient production process provides cost savings and competitive advantage

UBRG will use an efficient biodiesel production method called Dynamic Vibration Fusion Process (DVFP), which could cut production time by 40%-50% and produce high-grade biodiesel that meets or exceeds ASTM standards at much lower cost than similar-sized competitors. In addition, the Company expects to soon sign an agreement for one of two new second-generation technologies which could enable UBRG to produce biodiesel at temperatures of 110 degrees versus 145 degrees Fahrenheit which is the current industry norm. The new technology should result in significant energy cost savings. The Company's long-term goal is to further reduce energy costs by going completely off-grid by using wind, solar, and/or other alternative energy sources to power its plant and production process and also reducing the plant's carbon footprint.

Secure feedstock supply

The Company's refinery will have the ability to process a wide variety of feedstock, including used vegetable oil, animal fats, and non-edible plant oils, in addition to virgin plant oils, without requiring major technical changes to the plant. UBRG is sourcing non-edible vegetable feedstock from suppliers in Africa, Columbia and Malaysia, and is negotiating with a large rendering plant to provide it with animal fat feedstock at a 20% price savings. Over the longer-term, the Company plans to contract with farmers to cultivate oil-producing seed crops from non-edible plant sources on fallow land. Plans would entail cultivating a shrub called Jatropha, the seeds of which produce four times as much feedstock oil per acre as soybeans annually.

Biodiesel Industry Outlook

Biodiesel is a liquid biofuel that can be substituted for diesel as a stand-alone fuel (also known as B100 or 100% biodiesel) or used as an additive or extender by blending it with petroleum diesel. B20, a combination of 80% petroleum diesel and 20% biodiesel, is the most popular blended product qualifying for fleet compliance under the Energy Policy Act of 1992. Other variants such as B5 (5% biodiesel, 95% petroleum diesel), and B2 (2% biodiesel, 98% petroleum diesel) are also available. Both B5 and B6-B20 blends have recently received ASTM standards approval for quality assurance.

Typical biodiesel feedstocks include vegetable oils from soybeans, rapeseed, Jatropha, and animal tallow. Soybean oil and yellow grease (cooking oil recycled from restaurants) are the most common feedstocks used in the U.S..

The U.S. will become the world's largest biodiesel market

Crude oil prices have fluctuated wildly in 2008 and are projected to average $115 per barrel in 2008 and $126 per barrel in 2009. Rising oil prices, combined with environmental concerns and increased regulation of greenhouse gases, are encouraging businesses and consumers to explore alternative fuel sources, including biodiesel. According to SRI Consulting, the U.S. is on track to become the world's largest biodiesel consumer, accounting for roughly 19% of the world's biodiesel consumption by 2012. The U.S. currently accounts for approximately 13% of world biodiesel production.

According to the National Biodiesel Board (NBB), increased demand for biodiesel will come from four major segments - urban transit, government/regulated fleets, marine, and underground mining. These markets will use biodiesel mainly as a fuel additive to meet EPA regulations requiring the use of Ultra Low Sulfur Diesel (ULSD) in diesel-powered vehicles. Due to low lubricity, ULSD has the potential to damage diesel engines. Operators can avoid potential damage by using biodiesel as an additive and as a cetane booster as biodiesel has exceptional lubricity characteristics and typically higher cetane values than diesel.

Biodiesel as an alternative to petroleum diesel

There is a wide gap between crude oil supply and demand in the U.S. Only about one-quarter of the petroleum consumed in the U.S. is produced in this country. The U.S. currently relies on oil imported from other countries to meet domestic demand. Last year, crude oil imports averaged more than 5.1 million barrels per day. Biodiesel offers an attractive alternative fuel that can ease America's dependence on foreign oil, reduce pollutants and generate carbon credits.

Recent News From Universal Bioenergy, Inc.

Press Release Source: Universal Bioenergy, Inc.
Friday November 7, 4:15 pm ET

NETTLETON, Miss., Nov. 7 /PRNewswire-FirstCall/ -- Universal Bioenergy, Inc. (Pink Sheets: UBRG - News) CEO, Dr. Richard Craven, stated, "Algae can become a prominent source of energy, and with several new algae technology companies emerging, it is a good time to form alliances. We have identified and spoken with some candidates but certainly welcome contact from interested parties. It is our goal to one day be 100% self-supplying in oil raw materials. Growing our own algae-based oil would be a step in that direction as it would reduce the influence of commodity price fluctuations on our operating costs."

Universal Bioenergy, Inc. is actively seeking relationships with algae production companies for the purpose of biodiesel and other fuel production.

About Universal Bioenergy Inc.
Universal Bioenergy, Inc. ( www.universalbioenergy.com ) is a Mississippi-based company trading under the symbol UBRG.otc. and is engaged in the production of renewable fuels through its subsidiary Universal Bioenergy North America, Inc. who operates a biodiesel refinery in Mississippi. The refinery intends to produce biodiesel fuel from various virgin vegetable oils, premium greases, and non-edible vegetable oil sources using their unique and economical process.

Safe Harbor: Universal is a developmental stage company with limited operating history. To date it has not generated a positive cash flow. Anyone considering purchasing securities of this company should review its filings with the Securities and Exchange Commission. Certain statements contained within this press release contain forward-looking information 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. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, including product releases and marketing efforts, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The company undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events, or otherwise.

Source: Universal Bioenergy, Inc.

Financial Highlights For Universal Bioenergy, Inc.

 

Market Data	07-Nov-2008
Symbol	UBRG
Exchange	Pink Sheets
Recent Price	$1.37
52-week range	$1.25 - $5.06
Average Volume (50 day)	2,600
Outstanding Shares	22,510M
Public Float (approx)	11.5M
Market Cap.	$30.8M
Source:	yahoo finance

View available public company filings by Universal Bioenergy Inc.  HERE

Company Contacts

Universal Bioenergy, Inc.
128 Biodiesel Drive
Nettleton, MS 38858

http://www.universalbioenergy.com

Phone: 662-963-3333

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