Bay Gas Storage Signs Natural Gas Storage Agreement with Florida Power & Light.

MOBILE, Ala. -- Bay Gas Storage Co. Ltd., a subsidiary of EnergySouth, Inc. (NASDAQ: ENSI), announced today that it has reached a multiyear agreement with Florida Power & Light (FPL) to supply natural gas storage services from the company's third underground storage cavern. Bay Gas Storage's third cavern is currently under development and is expected to be in service by the summer of 2007.

According to Greg Welch, President and Chief Operating Officer, Bay Gas Storage Co., Ltd., the new agreement strengthens the relationship between the Mobile, Alabama based natural gas storage company and Florida's largest electric utility. "Reaching an agreement with FPL is another significant milestone for us. We continue to be encouraged by the market's response to our location, capability and proven track record of service."

Bay Gas Storage currently operates two salt-dome natural gas storage caverns at its storage facility located about 40 miles north of Mobile. The company has direct pipeline interconnects with Florida Gas Transmission Company, Gulf South Pipeline and Mobile Gas Service Corporation.

Bay Gas Storage's two existing caverns have a combined working gas capacity of approximately 6.0 Bcf with injection and withdrawal capacities of 200 MMcf and 610 MMcf per day, respectively and are currently fully subscribed on a firm basis. The third cavern expansion will add 5.0 Bcf of storage capacity along with injection and withdrawal capacities of 225 MMcf and 500 MMcf per day, respectively.