Holding company Gas Natural Inc. has announced that its subsidiary, Energy West Inc., has signed a definitive agreement for the sale of its subsidiary, Energy West Wyoming Inc., as well as its Wyoming pipeline assets and related real estate, equipment and contracts to Black Hills Corp. for $17 million. The closing is subject to customary closing conditions and regulatory approvals. The Energy West Wyoming transaction also contains a working capital adjustment at closing and a post-closing working capital “true-up.” As part of the agreement, Energy West Inc. and Black Hills Corp. will enter into a Transition Services Agreement to insure a seamless transition for Energy West Wyoming’s customers. The transaction is expected to close in approximately six to twelve months.
Energy West Inc. intends to use the proceeds from this transaction to reinvest into the business to generate solid returns on its invested capital. Including the gain anticipated on this transaction, the redeployment of resources is expected to have a significant positive impact on the Company’s earnings in 2015 and beyond.
“Low cost, clean-burning natural gas is readily abundant and in great demand. We believe our system expansion, strong safety record as well as our productive and dedicated team enables us to apply our resources to reach untapped markets, while enabling stronger earnings power,” said Gas Natural president and CEO Gregory J. Osborne. “The divestiture of our Wyoming operations reflects our strategic plan to redeploy assets and focus resources where we can earn the greatest return for our shareholders. We are working to build an efficient, quality natural gas utility serving diverse geographic markets that present unique expansion and earnings potential.”
Energy West Wyoming serves approximately 6,700 customers in Cody, Wyoming, and the surrounding region.