Chesapeake Utilities to Expand Maryland Service Area by Acquiring Eastern Shore Gas Company

Chesapeake Utilities Corporation announced today that it has entered into an agreement to purchase the operating assets of Eastern Shore Gas Company and its affiliate, Eastern Shore Propane Company, both of which are indirect, wholly-owned subsidiaries of Energy Equity Partners, L.P.

In Maryland, Chesapeake Utilities currently serves customers in Wicomico, Dorchester, and Caroline Counties, with non-residential customers with annual consumption in excess of 30,000 Ccf eligible to take competitive supply via transportation service.

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.

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.

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.