This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Chesapeake Utilities Corporation To Acquire The Operating Assets Of Eastern Shore Gas

DOVER, Del., June 26, 2012 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake") announced today that it has entered into an agreement to purchase the operating assets of Eastern Shore Gas Company ("Eastern Shore Gas") and its affiliate, Eastern Shore Propane Company ("Eastern Shore Propane"), both of which are indirect, wholly-owned subsidiaries of Energy Equity Partners, L.P.

Based in Worcester County, Maryland, Eastern Shore Gas provides propane distribution service to approximately 11,000 residential and commercial customers in Worcester County, Maryland, primarily in Ocean City, West Ocean City, Ocean Pines, Berlin, Pocomoke and Snow Hill. The propane distribution services are provided from central storage facilities through underground gas distribution mains and services very similar to a natural gas distribution system. These systems are under the jurisdiction of the Maryland Public Service Commission. Eastern Shore Propane provides propane bulk delivery service via individual propane tanks to over 500 customers throughout Worcester County.  "Chesapeake is in the process of evaluating the potential conversion of some of the facilities of Eastern Shore Gas from propane to natural gas.  Where economical and feasible, Chesapeake expects to undertake such conversions.  Chesapeake is also in the process of developing programs to assist customers in the conversion to natural gas in those areas where it becomes available," noted Jeffrey R. Tietbohl, Vice President of Chesapeake and senior leader responsible for Chesapeake's natural gas distribution operating division in Maryland.

The transaction significantly expands Chesapeake Utilities' distribution system operations on the Eastern Shore of Maryland; increases Chesapeake's platform for natural gas expansion efforts in Worcester County; and adds over 11,500 new customers, almost doubling Chesapeake Utilities' current 12,800 natural gas distribution system customers served in Maryland.  "Chesapeake has been meeting the energy needs of the Delmarva Peninsula for more than 150 years.  This acquisition further highlights Chesapeake's commitment to grow our natural gas and propane operations on the Eastern Shore of Maryland. We believe this acquisition will enable us to grow our natural gas distribution business in Worcester County more quickly," said Michael P. McMasters, President and Chief Executive Officer of Chesapeake Utilities Corporation.  

In 2011, Chesapeake announced plans to initially extend its natural gas transmission pipeline through its subsidiary Eastern Shore Natural Gas Company ("ESNG") to parts of Worcester County, MD. ESNG's construction of the natural gas transmission pipeline in Worcester County is proceeding as planned and is expected to be completed later this summer. Chesapeake's Maryland Division currently provides natural gas distribution service to customers in Wicomico, Dorchester and Caroline Counties.

Chesapeake expects to finance the purchase of the Eastern Shore Gas and Eastern Shore Propane operating assets using unsecured short-term debt.   Management expects the transaction to be earnings accretive in 2013 and thereafter. Terms of the transaction have not been publicly disclosed.  The transaction is subject to the approval of the Maryland Public Service Commission and the consents of certain local jurisdictions.  The acquisition is expected to be completed in the fourth quarter of 2012.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs