Chesapeake Utilities Corp. enters water conditioning and treatment market in Minnesota

Chesapeake Utilities Corporation announced today the purchase of select assets of EcoWater Systems of Rochester and serving Olmsted County and surrounding markets.

DOVER, Del., July 18, 2001 — Chesapeake Utilities Corporation announced today the purchase of select assets of EcoWater Systems of Rochester and serving Olmsted County and surrounding markets.

With this transaction, Chesapeake makes its debut in the Minnesota water conditioning and treatment arena. Former owner Donald J. Lee is continuing on as a consultant during a transition period and will then support Chesapeake in various other operational roles.

"Mr. Lee has done a great job in growing and operating this business for many years. He has identified and capitalized on many of the growth opportunities in the Rochester area and has laid the framework for additional expansion areas," said Mike Paice, President of Sharp Water, Inc. "We are excited about the future opportunities in the Rochester area and surrounding markets, and look forward to providing existing and new customers with the same exceptional customer service that has become synonymous with his business," Mr. Paice added.

For many years, EcoWater Systems of Rochester has been one of the top performing EcoWater dealerships in the country. Offering a full menu of products and services, including sales, service and rental of water conditioning products and solutions, as well as bottled water, this dealership is the ideal foundation for Chesapeake to build upon in the growing Midwest area.

Excluding this latest transaction, Chesapeake has three other geographic clusters of dealerships. Operating in the Mid-Atlantic cluster are Sam Shannahan Well Co., Inc. dba Sharp Water (formerly Tolan Water Service) in Salisbury, MD, and Carroll Water Systems, Inc. in Westminster, MD. Serving the growing Detroit, MI suburban market is EcoWater Systems of Michigan, Inc., dba Douglas Water Conditioning.

Less than three months ago, Chesapeake announced the formation of its Florida cluster with two other acquisitions, including Aquarius Systems in Fort Pierce and Absolute Water Care, Inc. in Venice.

In continued pursuit of its diversified growth strategy, Chesapeake plans to grow its existing and new clusters of dealerships in selected growth markets, primarily through the acquisition of existing successful dealerships and through initiation of start-up operations. One means of accomplishing these objectives is through the Company's joint initiative with EcoWater Systems Inc. to pursue growth in the water conditioning and treatment arena in non-traditional methods.

Chesapeake Utilities Corporation is a diversified utility company engaged in natural gas distribution and transmission, propane distribution and marketing, advanced information services and other related businesses. Information about Chesapeake Utilities Corporation and the Chesapeake family of businesses is available online at www.chpk.com.

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