Irvine-based energy company Universal Bioenergy Inc. has acquired a 40% stake in a Kentucky coal producer in a deal expected to deliver $53 million in annual revenue during the next five years.
Universal produces and markets natural gas, petroleum, coal and propane, with a customer base of public-utility companies, electric power producers and gas-ÂÂÂÂÂdistribution companies. It’s run by five people here, more than doubled its revenue from a year earlier in the first nine months of 2011 to $49.9 million.
The newly acquired stake into Whitesburg Friday Branch Mine LLC is expected to propel Universal into expansion in the coal energy sector and toward more growth this year.
• Headquarters: Irvine
• Founded: 2007
• Business: energy company
• Ticker symbol: UBRG (OTC)
• Market value: about $4.48 million
• Notable: holdings include coal, natural gas and oil production assets
“We’re expecting some revenue in the [remainder of] the first quarter, but the significance will start rolling in next quarter,” Chief Executive Vince Guest said.
Whitesburg has a group of surface-mining operations in Whitesburg, Ky. It is set to reach full operation of production and mining of thermal coal this month with plans for sales to electric utilities and other coal customers.
Universal—the 68th largest publicly held company in OC last year by revenue—expects to accrue annual profit of $5 million to $8 million from the deal. The company was established in 2007 and has been active in mergers and acquisitions.
Universal bought Charlotte, N.C.-based energy and fuel company NDR Energy Group LLC in April 2010. NDR has since been Universal’s marketing arm, through which the company has secured contracts with utility companies such as Southern California Gas Co. in Los Angeles and San Francisco-based Pacific Gas & Electric Co.
Universal has 10 employees in its NDR division in Charlotte. NDR recently received a contract to supply an undisclosed utility company with about 4.5 billion cubic feet of natural gas for six months starting in April in an estimated $11.5 million transaction.
Universal also created a subsidiary, Texas Gulf Oil & Gas Inc., and partnered with Abilene, Texas-based Progas Energy Services Inc. in December 2010 to develop oil and gas wells in Jim Wells County, Texas.
Progas struck oil on three wells last year and plans to drill more wells in the region.
The drilling of the three wells is expected to bring at least $600,000 in annual profit, Guest said.
