On July 1, Gas Natural Inc., a natural gas utility provider to more than 68,000 customers across six states, said the company has sold off its subsidiary company Energy West Wyoming Inc. and its pipeline assets specifically in Wyoming to Black Hills Corporation, according to a press release.
Additionally, Energy West Wyoming sold its related real estate, equipment and contracts to Black Hills for $17 million. The seller announced it was working on a deal with Black Hills in late 2014.
Once the sale is complete, the company will see a third quarter estimated income of $3.8 million, which equates to approximately $0.36 per share.
"This is a win-win transaction for the natural gas customers in Wyoming, Black Hills and Gas Natural," said Gregory J. Osborne, CEO and president of Gas Natural. "With the sale of our Wyoming operations, we will be able to focus additional capital in markets where there is greater potential for us to more efficiently deliver growth and returns on invested capital."
Osborne added that Black Hills now has the opportunity to increase its company's presence in Wyoming by giving customers efficient, cost-effective and safe natural gas services for the foreseeable future. Gas Natural will continue to work with Black Hills through the Transition Services Agreement to make the move more seamless for Wyoming customers.
"This divestiture is consistent with our strategy to monetize non-core assets to fund investments in underserved markets, particularly North Carolina and Maine, where we already have a strong presence and there is significant growth potential," said Osborne.
Price of natural gas not an immediate concern for Black Hills CEO
David Emery, CEO of Black Hills recently spoke on CNBC about the future of natural gas prices for customers. Emery said he expects things will eventually firm up in the market, but the demand for power is still high.
He added that currently, natural gas is one of the cheaper solutions to growing energy demand, and until better technology comes is made. As of right now, the CEO said he was not trying to invest so much in the idea of other energy sources, but simply natural gas.
However, the new acquisition of Energy West Wyoming shows the company is still dedicated to natural gas production in the U.S.