EnergySouth, Inc. Reports Fiscal 2008 First Quarter Earnings and Announces Declaration of Dividend

  
    
  
  
    
      EnergySouth, Inc. (NASDAQ: ENSI) today reported earnings for the fiscal 
      quarter ended December 31, 2007 of $4,087,000, or $0.50 per diluted 
      share, as compared to net income for the quarter ended December 31, 2006 
      of $4,614,000, or $0.57 per diluted share. The decrease in earnings of 
      $0.07 per diluted share was driven by the expansion of the Company’s 
      midstream operations.
    
    
      Earnings from the Company’s midstream 
      operations for the quarter ended December 31, 2007 were $0.13 per 
      diluted share, a decrease of $0.07 per diluted share as compared to the 
      same period last year. The decrease in earnings was due primarily to 
      increased operating expenses incurred as a result of the continuing 
      expansion of the midstream operations, including the acquisition of 
      assets in November 2007 to be developed in Mississippi. These increases 
      in expense were partially offset by increased revenues from short-term 
      storage agreements and a decrease in net interest expense (interest 
      expense less capitalized interest).
    
    
      Earnings per diluted share of $0.36 from the Company’s 
      natural gas distribution business for the quarter ended December 31, 
      2007 were unchanged when compared to the same prior-year period. 
      Margins, defined as revenues less cost of gas and related taxes, 
      decreased due primarily to a decline in consumption by 
      temperature-sensitive customers. This decrease was offset by a decline 
      in operating expenses during the current-year period.
    
    
      Earnings from other business operations for the quarter ended December 
      31, 2007 were also unchanged when compared to the same prior-year 
      period. A decrease in merchandise sales and related merchandising 
      activities was offset by an increase in net interest income earned 
      during the current year period.
    
    
      The Board of Directors of EnergySouth, Inc., at a meeting held January 
      25, 2008, declared a quarterly dividend on the outstanding Common Stock 
      of $0.25 per share, to be paid April 1, 2008 to holders of record as of 
      March 14, 2008.
    
    
      EnergySouth, Inc. is a holding company which has two principal 
      wholly-owned subsidiaries, Mobile Gas Service Corporation and 
      EnergySouth Midstream, Inc. The Company’s 
      natural gas distribution business is conducted by Mobile Gas, which 
      purchases, sells, and transports natural gas to residential, commercial, 
      and industrial customers in Mobile, Alabama and surrounding areas. 
      Mobile Gas also provides merchandise sales, service, and financing. The 
      Company’s natural gas midstream operations are 
      conducted by EnergySouth Midstream, which is the general partner and 
      90.9% owner of Bay Gas Storage Company, a limited partnership that 
      provides underground storage and delivery of natural gas. EnergySouth 
      Midstream also owns 60% of Mississippi Hub, LLC, a limited liability 
      company engaged in the construction and development of natural gas 
      storage caverns. EnergySouth Services, Inc. is a wholly-owned subsidiary 
      of EnergySouth Midstream engaged in natural gas marketing, trading and 
      risk management activities, and is the general partner of Southern Gas 
      Transmission Company, which is engaged in the intrastate transportation 
      of natural gas.
    
    
      
        
          ENERGYSOUTH, INC.
        
      
      
        
          FINANCIAL RESULTS
        
      
      
        
          (in thousands, except per share data)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Three months ended December 31,
        
        
        
        
           
        
        
          2007
        
        
        
        
           
        
        
          2006
        
      
      
        
          Operating Revenues
        
        
        
        
        
        
        
        
          $
        
        
          35,872
        
        
        
        
          $
        
        
          38,930
        
      
      
        
          Operating Expenses
        
        
        
        
        
        
        
        
          $
        
        
          27,940
        
        
        
        
          $
        
        
          29,932
        
      
      
        
          Net Income
        
        
        
        
        
        
        
        
          $
        
        
          4,087
        
        
        
        
          $
        
        
          4,614
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic Earnings Per Common Share
        
        
        
        
          $
        
        
          0.51
        
        
        
        
          $
        
        
          0.58
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted Earnings Per Common Share
        
        
        
        
          $
        
        
          0.50
        
        
        
        
          $
        
        
          0.57