Natural Gas Marketing The Company's natural gas marketing subsidiary, Peninsula Energy Services Company, Inc. (PESCO), provides natural gas supply and supply management services to over 2,100 customers in Florida and on the Delmarva Peninsula.

Propane Distribution is a major part of Chesapeake’s unregulated business portfolio. On the Delmarva Peninsula, the Company has a significant presence, operating as Sharp Energy, Inc. (sharpenergy.com). Sharp Energy provides propane gas over 35,000 residential, commercial and industrial customers on the Delmarva Peninsula which includes portions of Delaware, Maryland and Virginia, through eight District Offices (customer service centers) located in Salisbury, Pocomoke and Easton, Maryland; Dover, Georgetown and Ocean View, Delaware; Chincoteague Island and Belle Haven, Virginia. Sharp Energy also has District Offices located in Allentown and Honey Brook, Pennsylvania.

Delmarva’s rural nature, and its ever-increasing population, is ripe for propane gas service in areas not currently serviced by natural gas. The Delmarva Peninsula’s vast agricultural industry also utilizes large amounts of propane in its thousands of chicken houses and for other operations such as grain drying.

The propane distribution operation also markets, constructs and serves customers via Community Gas Systems™. These underground systems leverage off of our combined expertise in natural gas and propane and provide an excellent alternative in rural areas currently not serviced by natural gas. Builders and developers are realizing that Community Gas Systems™ are safe, reliable and clean. This type of propane services is also very popular in Florida.

These systems serve subdivisions and businesses from a central fuel storage facility, or cluster tank systems with multiple fuel storage facilities. This eliminates the need for an individual propane tank to be located at every home or business. Separately metered propane service is provided to each residence or business from a service line tapped into the underground gas distribution main. The Company’s expertise with underground systems, our long–standing relationships with homebuilders, and our reputation for quality and service are making Sharp’s Community Gas Systems™ an attractive option in our rapidly growing service territories.

The merger with Florida Public Utilities (fpuc.com) added approximately 14,000 customers to the Company’s existing propane presence in Florida. Shortly after the merger, Sharp Energy’s operations in Florida have been primarily merged into FPU’s propane distribution operations, adding 1,950 customers to FPU’s customer portfolio.