EnergySouth, Inc. reports fiscal 2008 second quarter earnings and announces increase in annual dividend

  
    
  
  
    
      EnergySouth, Inc. today reported earnings for the fiscal quarter ended 
      March 31, 2008 of $6,271,000, or $0.77 per diluted share, as compared to 
      net income for the quarter ended March 31, 2007 of $6,831,000, or $0.85 
      per diluted share. Net income for the six month periods ended March 31, 
      2008 and 2007 was $10,358,000, or $1.27 per diluted share, and 
      $11,445,000, or $1.42 per diluted share, respectively. The decrease in 
      earnings of $0.08 and $0.15 per diluted share for the three- and six- 
      month periods, respectively, was driven by the expansion of the Company’s 
      midstream operations.
    
    
      Earnings from the Company’s midstream 
      operations for the quarter ended March 31, 2008 were $0.09 per diluted 
      share, a decrease of $0.11 per diluted share as compared to the same 
      period last year. Earnings for the six months ended March 31, 2008 
      decreased $0.18 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. The Company acquired assets in Mississippi in 
      November 2007 and is currently developing storage caverns at that 
      location. Expenses also increased in anticipation of a third storage 
      cavern in McIntosh, Alabama going into service on April 1, 2008 which 
      increased the storage capacity of that facility from 6.0 Bcf to 11.4 Bcf 
      of working gas. Additional compressors which will serve the third 
      cavern, as well as existing caverns, went into service in December 2007. 
      As such, the Company incurred additional net interest expense of $0.04 
      and $0.06 per diluted share in the current year three- and six- month 
      periods, respectively, that was previously being capitalized. Since the 
      compressors are eligible for a fifty percent additional first year tax 
      depreciation allowance under the Gulf Opportunity Zone Act of 2005, the 
      Company will realize tax savings of approximately $4 million. These 
      increases in expense were partially offset by increased revenues from 
      short-term storage agreements.
    
    
      Earnings from the Company’s natural gas 
      distribution business for the quarter ended March 31, 2008 were $0.68 
      per diluted share, an increase of $0.04 per diluted share as compared to 
      the same prior-year period. Earnings for the six months ended March 31, 
      2008 also increased $0.04 per diluted share as compared to the same 
      prior-year period. The increase in earnings was driven primarily by a 
      decline in operating expenses during the current-year period. The 
      decrease in expenses was partially offset by a decrease in margins, 
      defined as revenues less cost of gas and related taxes, due primarily to 
      a decline in consumption by temperature-sensitive customers.
    
    
      Earnings from other business operations decreased $0.01 per diluted 
      share for each of the three and six month periods ended March 31, 2008 
      when compared to the same prior-year periods due primarily to a decrease 
      in merchandise sales and related merchandising activities.
    
    
      The Board of Directors of EnergySouth, Inc., at a meeting held April 25, 
      2008, declared a quarterly dividend on the outstanding Common Stock of 
      $0.26 per share, to be paid July 1, 2008 to holders of record as of June 
      16, 2008. The new annual rate of $1.04 per share represents a 4% 
      increase and the 33rd consecutive year in which 
      dividends have been increased.
    
    
      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 March 31,
        
        
           
        
        
           
        
        
           
        
        
           
        
        
          2008
        
        
           
        
        
           
        
        
           
        
        
           
        
        
          2007
        
      
      
        
          Operating Revenues
        
        
        
        
        
        
        
        
        
        
          $
        
        
           
        
        
           
        
        
           
        
        
          47,372
        
        
        
        
        
        
        
        
        
        
          $
        
        
           
        
        
           
        
        
           
        
        
          46,662
        
      
      
        
          Operating Expenses
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          35,326
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          34,173
        
      
      
        
          Net Income
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          6,271
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          6,831
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic Earnings Per Common Share
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          0.77
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          0.86
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted Earnings Per Common Share
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          0.77
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          0.85
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Six months ended March 31,
        
        
        
        
        
        
        
        
        
        
          2008
        
        
        
        
        
        
        
        
        
        
          2007
        
      
      
        
          Operating Revenues
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          83,244
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          85,591
        
      
      
        
          Operating Expenses
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          63,266
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          64,104
        
      
      
        
          Net Income
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          10,358
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          11,445
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic Earnings Per Common Share
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          1.28
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          1.44
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Diluted Earnings Per Common Share
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          1.27
        
        
        
        
        
        
        
        
        
        
          $
        
        
        
        
        
        
        
        
          1.42