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THE NASDAQ STOCK MARKET, INC.                                    NASDAQ



                                                  October 3, 1997

Michael Thomas, President
United Petroleum Corporation
4867 North Broadway
Knoxville, Tennessee 37918



Dear Mr. Thomas:


      Based on our review of the Company's public disclosures and its responses 
to our comment letters, the staff has concluded that United Petroleum's
securities no longer qualify for continued inclusion in the Nasdaq Stock Market.
The staff believes that the Company has relied excessively on consultants to
expand investor interest in its shares and that these arrangements have led to
a loss of shareholder value. In the dealings with one consultant, the Company
engaged in a series of transactions that brings the credibility of management
and the financial statements into question. The staff contends that the Company
has exhibited a pattern of management and financial practices that demonstrate a
breach of fiduciary responsibility and an absence of internal controls.
Currently, the Company is seeking to bolster shareholder value by entering into
an unrelated business line. Yet, based on the information disclosed, the staff
believes that the Company is taking on the characteristics of a "shell"
corporation. Lastly, the Company has failed to respond timely to the staff, even
failing to meet deadlines promised by management. The staff is basing its
decision to delist the Company's securities on the application of Marketplace
Rules 4300 and 4330 of the The Nasdaq Stock Market, whereby the Association may
exercise broad discretionary authority and deny inclusion of securities in order
to maintain the quality of, and the public confidence in, its market.(1)

  The Company hs entered into various consulting arrangements with the sole
purpose of expanding investor interest in the Company's shares. Based on our
review and responses received from the Company, these arrangements have led to
the deterioration of shareholder value and have failed to expand the shareholder
ownership base. In what appears to have been a very costly arrangement, the
Company engaged in a series of transactions that led to a substantial loss of
its market value and the diversion of funds from the proposed further
development of its oil and gas properties. The staff contends that management's
continued reliance on consulting arrangements to promote the Company's stock has
repeatedly impaired the interests of the Company's public shareholders, and in
general, a public company's dependency on such practices undermines the
integrity of the Nasdaq Stock Market.


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(1)In accordance with the Marketplace Rules 4300 and 4330 (a)(3). "The

Association may deny inclusion or apply additional or more stringent criteria
for the initial inclusion of a particular security based on any event,
condition, or circumstance which exists or occurs that makes initial or
continued inclusion of the security in Nasdaq inadvisable or unwarranted in the
opinion of the Association, even though the security meets all enumerated
criteria for initial or continued inclusion.... If the Association deems it
necessary to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, or to protect investors and the public
interest."


1801 K STREET, NW WASHINGTON, DC 20006
  

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     The staff believes that the Company's management neglected its fiduciary
responsibility by facilitating and pursuing manipulative transactions involving
the Company's stock and by failing to appropriately monitor the use and location
of its cash. With the assistance of a consultant, Strategic Holdings Corporation
(Strategic), the Company offered $27.5 million of convertible debentures under
Registration S to non-domestic investors, from May through October of 1996. The
Company received $17.9 million. The debentures contained an open-ended
conversion feature, and in early July of 1996, investors began to request
conversion into common stock and apparently established short positions upon
notifying the transfer agent of their intent to convert. In response, the
Company authorized a stock re-purchase program in "...an effort to send a
message to the marketplace that it was serious about shareholder value..." The
Company spent approximately $10.8 million in this effort, $7.4 million of which
was wired to Strategics brokerage account and used to purchase of 1,843,407
shares of the Company's stock and $3.4 million was wired to two accounts of the
broker/dealer. The latter amount was apparently consumed in the broker/dealer's
operations. The current value of the purchased shares is less than $500,000.

     As a result of what the Company's claims as TAJ's mismanagement of its
market-making activities, the willingness of TAJ's clearing agent, National
Financial Services, to allow TAJ to hold a position in the Company's stock in
violation of the margin rules, and the apparent disappearance of the
approximately $3.4 million wired to TAJ during the period from July 16th to
September 18th for the purchase of the Company's shares, the Company filed a
Complaint in federal court on March 18, 1997, suing TAJ, National Financial and
Mr. Jurdine for the recovery of the $10.8 million wired to TAJ, and Strategic's
account at TAJ. According to the Company the complaint has not been served.
Despite the Company's allegations, the staff's main objection is with the fact
that management continued to issue the convertible debentures in light of its
concerns about shareholder dilution and continued to forward funds to the
various brokerage accounts without obtaining an accounting of location and use
of such funds.

     In December of 1996, following the issuance of the debentures and its
attempts to stabilize the price of its common stock, the Company recorded a
series of transactions that brings into question the extent of whether
prospective shareholders should rely on management's judgment. Apparently to
offset the costs of the Company's share re-purchase efforts, Strategic agreed to

execute a note in favor of the Company for the sum of the amounts wired to
Strategic's account and those of the broker/dealer. The Company gained control
of the 1,834,407 shares of its stock as collateral for the note. Prior to its
release of its year-end financial statements for the year ended December 31,
1996, the Company wrote off the entire balance of the note. The write-off, plus
accelerated amortization of financing costs related to the convertible debenture
and losses from operations contributed to what the Company claimed as net
operating loss carry-forward, and as a result, the Company recognized a deferred
tax asset in excess of its deferred tax liability.

     The staff contends that the creation and subsequent write-off of the note
and the recognition of the deferred tax asset were inappropriate. All but $5,000
of the funds wired to Strategic's account were used to purchase shares of the
Company's common stock which it controlled at the time of the release of its
Form 10-K.  Basically, the Company had merely purchased its own shares through
Strategic's account, and according to the Company, such shares were being used
as partial consideration for the businesses it recently acquired. Consequently,
the staff believes that there is no basis for the portion of the deferred tax
related to the write-off as the results of a company's purchase or sale of its
own shares are not recognized

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through the income statement. In addition, the Company has based the realization
of its deferred tax asset primarily on the favorable outcome of a contingency
and on a series of proposed transactions which could result in extraordinary
gains, specifically in the recovery of the $10.8 million through the pending law
suit and the possibility of the remaining debenture holders forgiving a portion
or all of the remaining debt. From the staff's review of the accounting
literature, the assumed events are considered too uncertain in timing and amount
to support the position that a valuation allowance is not needed.

     The credibility of the Company's financial statements comes into question
again with respect to the reported amount of the capitalized costs of its
producing oil and gas properties and the disclosure of the estimated value of
its undeveloped proved reserves. The staff contends that the capitalized costs
of its producing properties are overstated by approximately $200,000. While the
potential write-down is not substantial, the response from the Company to
support the appropriateness of its recorded costs shows no calculation as to
whether the recognition of an impairment was needed. With respect to the
undeveloped Gray Hawk property, the Company has not demonstrated how it will
obtain the funds needed to drill the proposed wells and realize any of the
estimate value of the acreage. The Company reported proved non-developed
reserves from this holding of 84,232,501 mcf of gas, resulting in discontinued
present value of future revenues of $84,648,000. Yet the realization of this
potential asset will require the Company to complete a 50 well program over five
years with only a 10% dry hole rate, at an estimated capital cost of $237,000
per well. While the basis for the petroleum engineer's projection may be
reasonable and appropriate, the staff believes that the Company's disclosure of
the information without discussing the current lack of resources to initiate
this project is not.

     In a Press Release dated August 26th, the Company announced the formation
of a two separate divisions: the entertainment group and telecommunications

group, and the implied acquisition of the businesses compromising each group.
The entertainment group is to be engaged in motion picture production and
distribution, talent representation and the production and distribution of a
"Spanish Language Home Shopping network." The telecommunications group will
provide satellite communications services intended primarily to support the
broadcast of the Spanish Language Home Shopping network. In two separate Press
Releases issued the day before, the Company announced the creation of an oil
trading group domiciled in the Cayman Islands to complement its existing oil and
gas activities, and the addition of four new directors and three advisers to the
Board, apparently to provide guidance to the Company regarding the newly
acquired businesses. The staff is concerned that the Company's entrance into
businesses, completely unrelated to its current operations and concerning which
existing management has no prior experience, may lead to a complete change of
the Company's operating and financial structure, and ultimately, a change in
ownership control.

     Finally, the Company has violated Marketplace Rule 4330(c) by not
responding to the staff's requests for additional information, specifically,
failing to meet the staff's deadlines and extended deadlines promised by the
Company, and failing to indicate by phone or letter that the Company would be
unable to meet such deadlines.2

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2  As stated in the rule, "The Association may request any additional
information or documentation, public or non-public, deemed necessary to make a
determination regarding a security's initial or continued inclusion, including,
but not limited to, any material provided to or received from the Commission or
other appropriate regulatory authority. Information requested pursuant to this
subparagraph shall be submitted within a reasonable period.

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     The staff believes that providing United Petroleum continued access to the
liquidity of the Nasdaq Stock Market is detrimental to the interests of
prospective public shareholders and the broader public Investment community. Due
to the Company's activities as discussed above and the its apparent reluctance
to respond to our questions and comments in a timely manner, the staff believes
that the continued listing of United Petroleum is longer warranted. Accordingly,
the Company's securities will be delisted the Nasdaq Stock Market at the close
of business on FRIDAY OCTOBER 17, 1997.

     The Company may seek further review. For information regarding a review of
the staff's findings, please contact the Listing Qualifications Hearings
Department at (202) 496-2635. Please note the responses to these and any
subsequent questions may give rise to additional public interest concerns which
the staff would include in its presentation to any designated appeals process.


     If you have any questions regarding the compliance issues discussed above,
please contact Andrew Labadie at (202) 974-2911. Please also keep Mr. Labadie
apprised of any request for a hearing.

                                       Sincerely yours,


                                       /s/ Gary N. Sundick  
                                       Gary N. Sundick
                                       Vice President-Listing Investigations