DOVER, Del., Oct. 9, 2019 /PRNewswire/ -- Chesapeake Utilities
Corporation (Chesapeake Utilities) (NYSE: CPK) today announced that
it is exiting the natural gas marketing business through the sale
of the majority of the assets of Peninsula Energy Services Company,
Inc. (PESCO), the Company's natural gas marketing subsidiary. To
date, the Company has executed three separate transactions to sell
PESCO's assets and contracts:
- PESCO's Florida retail
operations will be sold to Gas South LLC.
- PESCO's other non-Florida
retail operations and contracts were sold to United Energy Trading,
LLC (UET).
- PESCO's Mid-Atlantic wholesale contracts and Chesapeake
Utilities' Delaware division,
Maryland division and Sandpiper
Energy Asset Management agreements were sold to NJR Energy Services
Company (NJRES).
The Company expects to recognize a gain from the sale of the
assets in 2019 upon the closing of the transactions. More
information will be provided in the Company's third quarter
earnings press release and Form 10-Q report as well as subsequent
filings.
"After performing a strategic review of the PESCO business unit,
we determined that our efforts should be focused on the strategies
that support our core energy delivery businesses. The level of
investment in infrastructure required to achieve the scale needed
for future growth meant that PESCO would not achieve the target
returns we expect," noted Jeff
Householder, President and CEO of Chesapeake Utilities
Corporation. "As a result, we made the decision to exit this
business, and have done so in a way that reduces future volatility
in our earnings, recovers our investment and improves our earnings
outlook going forward."
"Commitment to quality service, access to supply, and service
offerings were the driving factors for the selected counterparties.
We are working closely with Gas South, UET, and NJRES to ensure
each transaction is executed in an efficient manner with minimal
impact to the respective customers," added Bill Hancock, Assistant Vice President of PESCO.
"We have one remaining small book of business, our Producer
Services portfolio, which we are targeting to sell by the end of
the year."
About Chesapeake Utilities Corporation
Chesapeake Utilities Corporation is a diversified energy company
engaged in natural gas distribution and transmission; electricity
generation and distribution; propane gas distribution; and other
businesses. Information about Chesapeake Utilities Corporation's
businesses is available at www.chpk.com, through the Company's
Investor Relations App and on the Annual Report Microsite at
cpkannualreport.com.
About Gas South LLC
Gas South is a leading provider of natural gas in competitive
markets throughout the southeastern U.S., serving more than 300,000
residential, business and governmental customers in Georgia, Florida, North
Carolina and South
Carolina. Gas South is a wholly-owned subsidiary of Cobb
EMC, one of the country's largest electric cooperatives.
About United Energy Trading, LLC
United Energy Trading, LLC is a fully integrated energy
marketing and logistics organization with operations throughout the
continental United States and
Canada. UET purchases, transports,
and/or sells approximately 2 billion cubic feet/day of natural gas
on over 80 pipelines, approximately 400,000 barrels/day of crude
oil on over 20 pipelines and over 2.5 million gallons per day
throughout North America.
About NJR Energy Services Company
NJR Energy Services, a subsidiary of New Jersey Resources (NYSE:
NJR), manages a diversified portfolio of natural gas transportation
and storage assets and provides physical natural gas services and
customized energy solutions to its customers across North America.
Please note that Chesapeake Utilities Corporation is not
affiliated with Chesapeake Energy, an oil and natural gas
exploration company headquartered in Oklahoma City, Oklahoma.
For more information, contact:
Beth W. Cooper
Executive Vice President & Chief Financial Officer
302.734.6799
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SOURCE Chesapeake Utilities Corporation