VANCOUVER, BRITISH COLUMBIA -- 02/26/08 -- Universal Power Corp. (TSX VENTURE: UNX)(FRANKFURT: 3U2A) ("Universal") or (the "Company") announced today that it has entered into a Letter of Intent ("LOI") with Telpon Property Holdings Inc. (Telpon) to purchase up to 90% of all of the issued and outstanding shares in the capital of Kunene Energy (Pty) Ltd. ("Kunene") a Namibian oil and gas exploration and production company led by Mr. Knowledge Katti.
The Company will pay Telpon $850,000 cash and will issue 1,500,000 shares and 1,500,000 share purchase warrants of the Company upon completion of due diligence and TSX Venture Exchange ("TSX-V") approval.
The LOI will establish a strategic partnership designed to exclusively position Universal with ownership in key Namibian oil and gas assets while allowing Kunene to access foreign capital to fuel growth. The partnership cooperates with proposed Namibian Black Economic Empowerment ("BEE") initiatives through equity and project ownership in the Company.
Barry Swanson, CEO of Universal stated "this acquisition is a major step for our company and shareholders as we move closer to our goal of becoming a successful global energy exploration and production company. The purchase of Kunene immediately gives us a carried interest in a potential multi-billion barrel oil and gas project (Block 1711) set to commence drilling next month plus two off-shore oil and gas concession blocks (2713 A&B) in the prolific Orange Basin. Furthermore, with our partner the Namibian BEE, we will work closely on developing future oil and gas projects in the country".
About Block 1711
Kunene holds a 3% carried interest in Petroleum Exploration License ("EL") 1711, Sintezneftegaz, a Federation of Russia oil and gas company based in Moscow holds a 70% working interest, PetroSA, South Africa's national oil company holds a 10% working interest, EnerGulf Resources Inc (TSX-V listed) holds a 10% working interest and NAMCOR, the national oil company of Namibia holds a 7% carried interest.
EL 1711 is located in the Namibe basin off the northern coast of Namibia along the international boundary with Angola. Two individual prospects, the Kunene and Hartmann have been identified by 3-D seismic along with other undeveloped leads. The syndicate is targeting a potential multi-billion barrel oil and gas resource with drilling scheduled to commence in March 2008.
About Block 2713 A&B
Kunene holds a 100% interest in EL 2713 A&B covering an area of about 10,000 square kilometers situated on the boundary between the Luderitz and the Orange Basins offshore Namibia. The block is located in proximity to Tullow's proven Kudu Gas field and adjacent to ELs currently being explored by Hunt Oil and BHP.
The blocks are partially covered with modern 2D seismic and especially the western 2713B. Kunene is planning to conduct 3-D seismic over the entire block with the objective of developing leads for future drilling programs. Kunene will seek partners interested to earn their interest by participating in drilling the leads.
Terms
Pursuant to the terms of the LOI dated February 25, 2008 the Company will acquire 100% of all the issued and outstanding securities in the capital of Cabanas Business Group Ltd ("Cabanas"), which owns 20% of all the issued and outstanding securities of Kunene. In addition, Cabanas has been granted the option to acquire an additional 70% interest in Kunene and if exercised, would give the Company a 90% interest in Kunene.
As consideration for the 20% of Cabanas, the Company will be required pay Telpon $850,000 ($300,000 has been paid) and issue 1,500,000 common shares in the capital of the Company and 1,500,000 common share purchase warrants (the "Warrants"). Each Warrant entitles the holder thereof to acquire one (1) common share in the capital of the Company at an exercise price of $0.50 per share at any time until February 25, 2010. In addition, the Company will issue an aggregate of 100,000 common shares to an arm's length third party as a finder's fee. The common shares issued pursuant to the Acquisition are subject to a four month hold period.
Appointment of new Director
Subject to regulatory approval, Mr. Knowledge Katti has been appointed to the board of directors of the Company effective February 25, 2008. Mr. Katti is a distinguished Namibian businessman with over 10 years of experience in national and international exploration and government activities. He graduated from the University of Namibia in 1996 with a Bcomm degree in Accounting and Finance.
Resignation of Directors
The Company has accepted the resignations of directors Franco Perrotta and Maurizio Grande effective February 25, 2008. The Company wishes to thank both gentlemen for their past contributions and wishes them well in their future endeavors.
About Universal
Universal Power Corp. is a Canadian based Energy company listed on the TSX Venture Exchange with 45,219,000 shares issued and outstanding. The Company's target for growth is to acquire strategic properties globally that have highly prospective geology and to advance them through managed exploration programs.
ON BEHALF OF THE BOARD OF DIRECTORS
Barry Swanson, Director and CEO
The TSX Venture Exchange has not reviewed and does not accept responsibility of the adequacy or accuracy of this news release.
Contacts:
Universal Power Corp.
Barry Swanson
Director and CEO
(778) 997-4925
(604) 844-7572 (FAX)
Email: barry@universalpowercorp.ca
