DOVER, Del. (AP) -- Chesapeake Utilities is buying the operating assets of Eastern Shore Gas and affiliate Eastern Shore Propane to boost its natural gas business in Maryland and to increase its customer base.
Financial terms of the transaction were not disclosed.
Natural gas supplies are surging thanks to hydraulic fracturing techniques now in use by drillers, even testing U.S. capacity to store it.
Eastern Shore Gas Co. and affiliate Eastern Shore Propane Co. are indirect subsidiaries of Energy Equity Partners LP. Eastern Shore provides propane distribution service to approximately 11,000 residential and commercial customers in Worcester County, Md. Eastern Shore Propane provides propane bulk delivery service through individual propane tanks to more than 500 customers throughout Worcester County.
Jeffrey Tietbohl, vice president of Chesapeake, said the company wants to convert some of Eastern Shore Gas's plants from propane to natural gas and developing programs to help customers convert to natural gas in areas where it becomes available.
Chesapeake said Tuesday that the acquisition will give it more than 11,500 new customers. This almost doubles its current 12,800 natural gas distribution systems customers in Maryland.
Chesapeake, which is based in Dover, Del., plans to fund the buyout with unsecured short-term debt.
The transaction is expected to add to earnings in 2013 and beyond.
The deal is expected to close in the fourth quarter, subject to Maryland Public Service Commission approval and the consents of certain local jurisdictions.
Shares of Chesapeake Utilities Corp. fell 40 cents to $43.53 in morning trading.