Chesapeake Utilities plans sale of natural gas marketing company
Transactions - OCTOBER 10, 2019

Chesapeake Utilities plans sale of natural gas marketing company

by Kali Persall

Chesapeake Utilities is selling the majority of assets of its natural gas marketing subsidiary, Peninsula Energy Services Company (PESCO).

Financial terms were not disclosed.

The company has made three separate transactions to sell PESCO’s assets and contracts to date, according to Chesapeake.

PESCO’s Florida retail operations will be sold to Gas South, an Atlanta-based natural gas provider. The company’s other non-Florida retail operations and contracts were sold to United Energy Trading (UET) and its 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).

With the latest sale, Chesapeake says it is withdrawing from the natural gas marketing business and will concentrate on its core energy delivery businesses.

The sale follows a decline in revenue for PESCO, which fell 9.27 percent year-over-year in the first half of 2019 from $130.4 million in 2018. The operating income declined $1.8 million for the three months from the previous year, as of June 30.

PESCO anticipates a gain from the sale of the assets this year, following the sale. The company has plans to invest $750 million to $1 billion to strengthen operations during the 2018–2022 time frame.

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