Exhibit 99.1   **Date:** July 28, 2006 **Contact:** Charles P. Huffman   **Release:** Immediately **Phone:** 251-476-2720**EnergySouth, Inc. reports fiscal 2006 third quarter earnings and announces declaration of dividendand election of new Chief Executive Officer****Mobile, AL:**The Board of Directors of EnergySouth, Inc., at a meeting held July 28, 2006, declareda quarterly dividend on the outstanding Common Stock of $0.23 per share, to be paid October 1, 2006to holders of record as of September 15, 2006 and elected C.S. “Dean” Liollio to become theCompany’s President and Chief Executive Officer effective August 1, 2006. Mr. Liollio has alsojoined the Board of Directors of the Company. As part of the Company’s leadership transitionprocess, John S. Davis was elected to serve as Vice Chairman of the Company until his retirement,which will be effective July 1, 2007.Net income for EnergySouth, Inc. for the quarter ended June 30, 2006 was $1,563,000 or $0.20 perdiluted share, as compared to net income for the quarter ended June 30, 2005 of $1,457,000, or$0.18 per diluted share. Net income for the nine month periods ended June 30, 2006 and 2005 was$12,708,000, or $1.59 per diluted share, and $12,568,000, or $1.58 per diluted share, respectively.Earnings for the third quarter of fiscal 2006 were $0.02 per diluted share above the same periodlast year, resulting in an increase in earnings for the first nine months of fiscal 2006 of $0.01per diluted share. The increase in earnings realized during the three and nine months ended June30, 2006 resulted primarily from improved results from the storage operations of the Bay GasStorage Company subsidiary which were offset by a decline in earnings from Mobile Gas’ distributionbusiness.Bay Gas’ earnings increased by $0.07 and $0.13 per diluted share, respectively, for the three andnine months ended June 30, 2006. The increases in earnings were due to increased storage revenuesassociated with new contracts for long-term and short-term storage services and an increase in theamount of interest expense capitalized for the construction of its third underground natural gasstorage cavern. A reduction in operating expenses during the nine months ended June 30, 2006 alsocontributed to the increase in earnings. The reduction in operating expenses includes a one timecredit of approximately $0.02 per diluted share related to certain cavern lease payments recordedas a prepaid asset which will be amortized over the remaining term of the lease under which thepayments are made.Earnings per share from Mobile Gas’ distribution business decreased $0.08 and $0.15 per diluted
 

 
share, respectively, for the three and nine month periods ended June 30, 2006 due primarily to adecline in consumption from temperature sensitive customers. High natural gas prices during the2005-2006 winter months and related adverse publicity regarding higher rates to gas distributioncompany customers had a significant impact on average consumption patterns. The current-yearresults for the nine months ended June 30, 2006 include a one-time credit to operating expensesrelated to discontinued postemployment health insurance of approximately $0.03 per diluted share.Earnings from other business operations increased $0.03 per diluted share for the three and ninemonths ended June 30, 2006 due to an increase in interest income and an increase in merchandisesales and related activities.EnergySouth, Inc. is the holding company for a family of energy businesses. Mobile Gas purchases,sells, and transports natural gas to residential, commercial, and industrial customers in Mobile,Alabama and surrounding areas. Mobile Gas also provides merchandise sales, service, and financing.EnergySouth Storage Services is the general partner of Bay Gas Storage Company, a limitedpartnership that provides underground storage and delivery of natural gas for Mobile Gas and othercustomers. EnergySouth Services is the general partner of Southern Gas Transmission Company, whichis engaged in the intrastate transportation of natural gas.**ENERGYSOUTH, INC.**