Chesapeake Utilities Corporation and Florida Public Utilities Company Announce Definitive...

Chesapeake Utilities Corporation and Florida Public Utilities Company Announce
Definitive Merger Agreement

- All Stock Transaction; Each Common Share of Florida Public Utilities Company
to be Exchanged For 0.405 Common Shares of Chesapeake Utilities Corporation -

DOVER, Del. and WEST PALM BEACH, Fla., April 20 /PRNewswire-FirstCall/ --
Chesapeake Utilities Corporation (NYSE: CPK) and Florida Public Utilities
Company (NYSE AMEX: FPU) today announced that they have entered into a
definitive merger agreement pursuant to which Florida Public Utilities will
merge with a wholly owned subsidiary of Chesapeake. The merger was
unanimously approved by both companies' Boards of Directors on Friday, April
17, 2009. Under the merger agreement, holders of Florida Public Utilities
common stock will receive 0.405 shares of Chesapeake common stock in exchange
for each outstanding share of Florida Public Utilities. Based on the average
of Chesapeake's closing stock price the fifteen trading days prior to April
15, 2009, the transaction has an approximate value of $12.20 per Florida
Public Utilities share. The merger is intended to qualify as a tax-free
reorganization and is subject to various regulatory approvals as well as
approval by the shareholders of both companies. The merger is expected to
close during the fourth quarter of 2009. Management expects the transaction
to be earnings neutral or slightly accretive in 2010 and meaningfully
accretive in 2011.

The merger will create a combined energy company serving approximately 200,000
customers (117,000 natural gas, 48,000 propane and 31,000 electric customers)
in the Mid-Atlantic and Florida markets with assets totaling $595 million.
Chesapeake and Florida Public Utilities recognized $291.4 million and $168.5
million in revenues, respectively, and $13.6 million and $3.5 million in net
income, respectively, for 2008.

At the close of the merger, Florida Public Utilities will be a wholly owned
subsidiary of Chesapeake and initially will continue to operate as a separate
business unit. Over time, subject to regulatory approval, Central Florida
Gas, a division of Chesapeake, and Florida Public Utilities will integrate
their operations. Consolidation of regulated natural gas services will
require Florida Public Service Commission approval and may extend beyond two
years. The combined Florida subsidiary will conduct business under the name
of Florida Public Utilities.

At the end of 2008, Central Florida Gas served approximately 16,800 customers
in 23 counties and Florida Public Utilities served approximately 95,700
customers in 19 counties, of which eight counties are served by both entities.
As a result of the merger, the combined company will have an increased
geographic footprint and serve 34 counties throughout Florida. The
combination of Florida Public Utilities and Central Florida Gas will increase
the number of regulated Florida utility customers served to more than 97,000
and unregulated Florida propane customers served to approximately 15,000
customers.

"We believe this merger is a great strategic fit for both companies, and we
expect it to benefit the customers and shareholders of both companies. We
share a fundamental business philosophy that promotes steady profitable
growth, new investments to fuel that growth, and key acquisitions to
strengthen our position," stated John Schimkaitis, Chesapeake's President and
Chief Executive Officer. "We have the utmost respect for Florida Public
Utilities and its track record under its Board as well as management's
leadership. We are excited about the opportunities the merger brings to
continue the legacies that both Florida Public Utilities and Chesapeake have
built over the past decade."

"We are pleased to be joining forces with Chesapeake. Our companies share many
key corporate values -- a commitment to quality customer service, an
appreciation for our employees, and a dedication to achieving profitable
long-term growth," stated Jack English, Florida Public Utilities Chairman,
President and Chief Executive Officer. "We believe that our shared common
traits and business philosophies will help ensure a smooth transition and make
this merger a smart organic fit."

Upon completion of the merger, John Schimkaitis, President and Chief Executive
Officer of Chesapeake, will also become Chairman and Chief Executive Officer
of Florida Public Utilities. Jack English will be retained as a consultant
for up to twenty-four months following the merger, and will assist in the
integration effort. Two members of the Florida Public Utilities Board of
Directors will join the Chesapeake Board of Directors.

Expected Benefits of the Merger

The merger is expected to deliver significant benefits to the customers and
shareholders of both companies including:

1. Increased Scale and Scope: The geographic footprint, number of total
customers served, and the diversity of service offerings will increase
as
a result of the transaction. The combined operations will include
substantial customer bases for electric, natural gas and propane in
several key markets across Florida including the Southeast, Central,
Northeast and Panhandle geographic areas.
2. Future Growth Potential: While the economic climate in Florida has
slowed, the long-term forecasts still project Florida to be among the
fastest growing states in the country. State projections for Florida
anticipate that population growth will begin to slowly increase again
in
2010, at which time the companies expect that the combined company will
be well positioned to help meet the energy needs of new residential
consumers in our combined service territory, along with the commercial
development that typically follows. The merger is expected to create a
stronger company with increased capabilities to serve the future
growth.
3. Florida's Supportive Natural Gas Regulatory Climate:
Florida's regulatory commission has a long history of actively
promoting natural gas expansion throughout the state. Actions taken in
recent years by the Governor, the legislature and Florida regulators
all
underscore that Florida is a great place to grow the natural gas
business.
4. Shared Gas Experience and Expertise: The companies anticipate that the
combined company will benefit greatly from each other's outstanding
experience and expertise in the natural gas and propane distribution
businesses. In addition, Florida Public Utilities' electric
business will expand Chesapeake's energy portfolio, as well as its
utility foundation.
5. Synergistic Opportunities: The companies anticipate that the merger
will
offer opportunities for both companies to operate more effectively,
create efficiencies at all levels of the new organization, and employ
best practices.
6. Increased Financial Strength: Increased scale and scope is expected to
further strengthen the balance sheet of the combined company, adding
increased financial flexibility and enhanced access to capital markets.

Chesapeake expects to maintain its dividend policy consistent with past
practice.

7. Steadfast Community Involvement: Chesapeake and Florida Public
Utilities
have and will continue to be committed to the communities in which they
operate, and both have strong track records for safety.

Approvals and Timing

The merger is conditioned upon approval by the shareholders of both companies,
as well as a number of approvals or reviews by federal and state regulatory
authorities, including the Delaware Public Service Commission and the Maryland
Public Service Commission. The companies will work to secure necessary
government approvals consistent with the Hart-Scott-Rodino Antitrust
Improvements Act.

Shareholder approval will require the filing of proxy solicitation materials
and securities registration documents with the Securities and Exchange
Commission. The companies anticipate making required regulatory filings and
seeking regulatory and shareholder approval to allow a closing of the
transaction during the fourth quarter of 2009.

Advisors

Chesapeake's financial advisor is Robert W. Baird and Co., Incorporated.
Florida Public Utilities is advised by Houlihan Lokey.

About Chesapeake Utilities Corporation (www.chpk.com)

Incorporated in 1947, Chesapeake is a diversified utility company engaged in
natural gas distribution, transmission and marketing, propane distribution and
wholesale marketing, advanced information services and other related
businesses. In total, Chesapeake currently serves approximately 100,000
distribution customers with either natural gas or propane gas. Chesapeake
employs 448 people and posted $291.4 million in revenue for 2008.

Chesapeake's natural gas distribution operations serve approximately 65,000
residential, commercial and industrial customers in Delaware, Maryland and
Florida. Eastern Shore Natural Gas Company, Chesapeake's natural gas
transmission subsidiary, transports and delivers natural gas through 379 miles
of transmission pipeline to industrial customers and natural gas distribution
companies including Chesapeake's Delaware and Maryland divisions, and owns and
operates the only transmission pipeline south of the Chesapeake and Delaware
Canal. Sharp Energy, Chesapeake's propane distribution subsidiary,
distributes propane to approximately 35,000 residential, commercial and
industrial customers in Delaware, Maryland, Virginia, Pennsylvania and
Florida. Chesapeake's other subsidiaries include Peninsula Energy Services
Company, Inc. (PESCO), a natural gas marketing company; Peninsula Pipeline
Company, Inc., an intrastate pipeline company in Florida; Xeron, Inc., a
propane wholesale marketing company in Houston, Texas; and BravePoint(R),
Inc., Chesapeake's advanced information services subsidiary based in Atlanta.

About Florida Public Utilities (www.fpuc.com)

Founded in 1924, Florida Public Utilities distributes natural gas, propane and
electricity to residential, commercial and industrial customers in Florida.
Florida Public Utilities is organized into two regulated business segments --
natural gas and electric; and one non-regulated business segment -- propane
gas. Florida Public Utilities also sells merchandise and other
service-related products as a complement to its natural gas and propane
segments. Florida Public Utilities serves approximately 96,000 customers,
employs 348 people and posted revenues of $168.5 million for 2008.

Forward-Looking Statement

This document includes statements that do not directly or exclusively relate
to historical facts. Such statements are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. These forward-looking statements include
statements regarding benefits of the proposed merger, integration plans and
expected synergies, anticipated future financial operating performance and
results, including estimates of growth and expectation that earnings will be
neutral or slightly accretive in 2010 and meaningfully accretive in 2011.
These statements are based on the current expectations of the management of
Chesapeake and Florida Public Utilities. There are a number of risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements included in this document. These risks and
uncertainties include the following: the companies may be unable to obtain
regulatory approvals required for the transaction, or that required regulatory
approvals may delay the transaction or result in the imposition of conditions
that could have a material adverse effect on the combined company or cause the
companies to abandon the transaction; the companies may be unable to obtain
shareholder approvals required for the transaction; conditions to the closing
of the merger may not be satisfied; problems may arise in successfully
integrating the businesses of the companies, which may result in the combined
company not operating as effectively and efficiently as expected; the combined
company may be unable to achieve cost-cutting synergies or it may take longer
than expected to achieve those synergies; the transaction may involve
unexpected costs or unexpected liabilities, or that the accounting for the
transaction may be different from the companies' expectations; the businesses
of the companies may suffer as a result of uncertainty surrounding the
transaction; the natural gas and electric industries may be subject to future
regulatory or legislative actions that could adversely affect the combined
company; and the combined company may be adversely affected by other economic,
business, and/or competitive factors. Additional factors that may affect the
future results of Chesapeake and Florida Public Utilities are set forth in
their respective filings with the SEC, which are available at
investor.shareholder.com/CPK/sec.cfm and www.fpuc.com/about_us/invest.asp,
respectively. Chesapeake and Florida Public Utilities undertake no obligation
to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

Additional Information and Where to Find It

In connection with the proposed merger, Chesapeake's registration statement on
Form S-4, which will include a joint proxy statement of Chesapeake and Florida
Public Utilities and a prospectus, as well as other materials, will be filed
with the SEC. WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND JOINT
PROXY STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
CHESAPEAKE, FLORIDA PUBLIC UTILITIES AND THE PROPOSED MERGER. Investors will
be able to obtain free copies of the registration statement and proxy
statement/prospectus (when available) as well as other filed documents
containing information about Chesapeake and Florida Public Utilities at
http://www.sec.gov, the SEC's Web site. Free copies of Chesapeake's SEC
filings are also available on Chesapeake's Web site at
investor.shareholder.com/CPK/sec.cfm and free copies of Florida Public
Utilities' SEC filings are also available on Florida Public Utilities' Web
site at www.fpuc.com/about_us/invest.asp.

Participants in the Solicitation

Chesapeake and Florida Public Utilities and their respective directors,
executive officers, other members of management and employees may be deemed,
under SEC rules, to be participants in the solicitation of proxies with
respect to the proposed merger. Information about the directors and executive
officers of Florida Public Utilities is set forth in the proxy statement for
Florida Public Utilities' 2009 Annual Meeting of Stockholders, as filed with
the SEC on a Schedule 14A on April 6, 2009 and Form 10-K filed with the SEC on
March 20, 2009. Information about the directors and executive officers of
Chesapeake is set forth in the proxy statement for Chesapeake's 2009 Annual
Meeting of Stockholders, as filed with the SEC on a Schedule 14A on March 27,
2009 and Form 10-K filed with the SEC on March 9, 2009. Additional information
regarding the interests of those participants and other persons who may be
deemed participants in the merger may be obtained by reading the registration
statement, joint proxy statement/prospectus and other materials to be filed
with the SEC regarding the proposed merger when it becomes available. You may
obtain free copies of these documents as described previously.

Analyst and Media Conference Call Information

Chesapeake and Florida Public Utilities will host a conference call for
members of the investment community at 1:30 p.m. EDT. To participate in the
call, analysts are asked to dial 1-866-821-5457.

Media Contact:
Sydney Davis, Communication Manager
Phone: 302.736.7828
Mobile Phone: 703.801.8258
e-mail: shdavis@chpk.com

Chesapeake Utilities Corporation Contact:
Beth Cooper, Senior Vice President and Chief
Financial Officer
Phone: 302.734.6799
e-mail: bcooper@chpk.com

Florida Public Utilities Contact:
Jack English, Chairman, President and Chief
Executive Officer
Phone: 561.838.1762
e-mail: jenglish@fpuc.com

SOURCE Chesapeake Utilities Corporation

Media: Sydney Davis, Communication Manager, +1-302-736-7828, Mobile Phone:
+1-703-801-8258, shdavis@chpk.com, Chesapeake Utilities Corporation: Beth
Cooper, Senior Vice President and Chief Financial Officer, +1-302-734-6799,
bcooper@chpk.com; Florida Public Utilities: Jack English, Chairman, President
and Chief Executive Officer, +1-561-838-1762, jenglish@fpuc.com