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                                                                Exhibit 10(r)-1


                     AMENDED AND RESTATED STOCK OPTION PLAN
                                       OF
                                ENERGYSOUTH, INC.
                (AS SUCCESSOR TO MOBILE GAS SERVICE CORPORATION)
       [including amendment approved by stockholders on January 29, 1999]


1.       ASSUMPTION OF PLAN BY ENERGYSOUTH, INC.; PURPOSE AND SCOPE

         (a) This Amended and Restated Stock Option Plan of EnergySouth, Inc.
(as successor to Mobile Gas Service Corporation) (this "Plan") amends and
restates the Mobile Gas Service Corporation 1992 Stock Option Plan (the
"Original Plan"), which was adopted by the Board of Directors of Mobile Gas
Service Corporation ("Mobile Gas") on December 4, 1992, and became effective as
of such date upon approval of the Original Plan by the shareholders of Mobile
Gas on January 29, 1993. The amendment and restatement of the Original Plan and
the assumption of liabilities hereunder are undertaken by EnergySouth, Inc. (the
"Company"), as successor to Mobile Gas, in connection with the reorganization of
Mobile Gas into a holding company structure (the "Reorganization") as a part of
which Mobile Gas became a wholly-owned subsidiary of EnergySouth as of February
2, 1998. The Reorganization is being effected pursuant to an Agreement and Plan
of Merger dated as of December 10, 1997 (the "Merger Agreement"), which was
approved by the stockholders of Mobile Gas on January 30, 1998, and pursuant to
which Mobile Gas and EnergySouth agreed that from and after the effective date
of the Merger provided for therein, this Plan would utilize EnergySouth common
stock instead of Mobile Gas common stock. Accordingly, as of the effective date
hereof, EnergySouth assumes the obligations of Mobile Gas under the Original
Plan, including without limitation obligations with respect to Options granted
pursuant to the Original Plan, and undertakes to carry out all responsibilities
of the Company specified herein. Mobile Gas consents and agrees to the
assumption by EnergySouth of the Company's responsibilities under this Plan.

         (b) The purposes of this Plan are to encourage stock ownership by key
employees of the Company and the Company's subsidiaries upon whose judgment,
initiative, and effort the Company is largely dependent for its success, to
provide an incentive for such employees and other individuals to expand and
improve the profits and prosperity of the Company, and to assist the Company and
its subsidiaries in attracting and retaining key personnel through the grant of
options to purchase shares of the Company's common stock.

2.       DEFINITIONS

         Each term set forth in this Section 2 shall have the meaning set forth
opposite such term for purposes of this Plan unless the context otherwise
requires, and for the purposes of such definitions, the singular shall include
the plural and the plural shall include the singular:

      (a) "Board" shall mean the Board of Directors of the Company.

      (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

      (c) "Committee" shall mean the Compensation and Planning Committee
      appointed by the Board or any successor committee designated by the Board,
      which shall be comprised of not less than two (2) members of the Board,
      each of whom shall be a "disinterested person" as defined in Rule
      16b-3(b)(3)(i) promulgated under the 1934 Act.

      (d) "Company" shall mean EnergySouth, Inc., an Alabama corporation.

      (e) "Fair Market Value" for a share of Stock shall mean the price that the
      Committee acting in good faith determines, through any reasonable
      valuation method (including but not limited to reference to prices
      existing in any established market in which the Stock is traded), to be
      the price at which a share of Stock might change hands between a willing
      buyer and a willing seller, neither being under any compulsion to buy or
      to sell and both having reasonable knowledge of the relevant facts. It
      shall be deemed a reasonable valuation method if the Fair Market Value is
      set at the mean between the highest and lowest quoted selling price of a
      share of Stock on the NASDAQ Stock Market on the date such value is
      determined or the nearest prior business day on which trading occurred on
      the NASDAQ Stock Market.

      (f) "Grant Date" means the date on which a Participant is granted an
      Option or SAR, as determined by the Committee.

      (g) "ISO" shall mean a right in the form of an option to purchase Stock
      granted under this Plan that is intended to qualify as an incentive stock
      option under Section 422 of the Code.


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      (h) "Non-ISO" shall mean a right in the form of an option to purchase
      stock granted under this Plan that is not intended to qualify as an
      incentive stock option under Section 422 of the Code.

      (i) "Option" shall mean either an ISO or a Non-ISO.

      (j) "Option Price" shall mean the purchase price for Stock under an
      Option, as determined in Section 6 below.

      (k) "Participant" shall mean an employee of the Company or any of its
      Subsidiaries to whom an Option or SAR is granted under the Plan.

      (l) "Plan" shall mean this Amended and Restated Stock Option Plan of
      EnergySouth, Inc.

      (m) "SAR" or "Stock Appreciation Right" shall mean a right to receive cash
      or Stock granted pursuant to Section 8 of the Plan.

      (n) "Stock" shall mean the $.01 par value common stock of the Company.

      (o) "Subsidiary" shall mean any corporation of which the Company owns
      fifty percent (50%) or more of the total combined voting power of all
      classes of stock of such corporation, and any corporation which is itself
      a Subsidiary of any other Subsidiary.

      (p) "Ten Percent Shareholder" shall mean a person who owns more than ten
      percent (10%) of the total combined voting power of all classes of stock
      of the Company or a Subsidiary.

      (q) "1934 Act" means the Securities Exchange Act of 1934, as amended.

3.    STOCK SUBJECT TO OPTIONS

      (a) Subject to the provisions of Section 14 of the Plan, the maximum
number of shares of Stock that may be optioned or sold under the Plan is three
hundred fifty thousand (350,000) shares.

      (b) For purposes of calculating the maximum number of shares of Stock that
may be issued under the Plan, (i) all the shares issued (including the shares,
if any, withheld for tax withholding requirements) shall be counted when cash is
used as full payment for shares issued upon exercise of an Option, (ii) only the
net shares issued (including the shares, if any, withheld for tax withholding
requirements) shall be counted when shares of Stock are used as full or partial
payment for shares issued upon exercise of an Option, and (iii) all shares
issued in lieu of cash upon exercise of Stock Appreciation Rights shall be
counted.

4.    ADMINISTRATION

      The Plan shall be administered by the Committee. A majority of the members
of the Committee shall constitute a quorum for the transaction of business. The
Committee shall have full authority in its discretion, subject to and not
inconsistent with the express provisions of the Plan and with Section 16 of the
1934 Act, to grant Options and SARs; to determine the Option Price and term of
each Option, whether an Option will be an ISO or a Non-ISO, the Participants to
whom, and the time or times at which, Options shall be granted and the number of
shares of Stock to be covered by each Option; to determine which Options shall
be accompanied by SARs and/or dividend equivalents; to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the option agreements (which need not be
identical) entered into in connection with the grant of Options and SARs; and to
make all other determinations deemed necessary or advisable for the
administration of the Plan. Members of the Committee may participate in a
meeting of the Committee by means of conference telephone, and such
participation shall constitute presence in person at the meeting. The Committee
may delegate to one or more of its members, or to one or more agents, such
administrative duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan. The Committee may employ attorneys, consultants,
accountants, or other persons, and the Committee shall be entitled to rely upon
the advice, opinions, or valuations of such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Participants, the Company, and all other interested
persons. No member of the Committee shall be personally



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liable for any action, determination, or interpretation made in good faith with
respect to the Plan; and all members of the Committee shall be fully protected
by the Company in respect of any such action, determination, or interpretation.

5.    ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING OPTIONS

      Options may be granted to officers or other key employees of the Company
or its Subsidiaries upon whose judgment, initiative or effort the Company relies
for the successful conduct of its business, as determined by the Committee in
its discretion. In determining the employees or other individuals to whom
Options shall be granted and the number of shares of Stock to be covered by each
Option, the Committee shall take into account the nature of such persons'
duties, their present and potential contributions to the success of the Company,
and such other factors as it shall deem relevant in connection with
accomplishing the purposes of the Plan. A director of the Company who is not
also a regular full-time employee will not be eligible to receive an Option.
Options shall be granted to Participants in the sole discretion of the
Committee, and the Committee shall be under no obligation whatsoever to grant
Options or to grant all Options subject to the same terms and conditions. A
Participant who has been granted an Option under the Plan may be granted new
Options, which may be in addition to prior Options granted to said Participant
under the Plan or may be in exchange for the surrender and cancellation of prior
Options, with the new Option having an Option Price lower (or higher) than the
Option Price provided in the prior Option and containing such other terms as the
Committee may deem appropriate.

      If the Committee grants an ISO and a Non-ISO to the same Participant, the
right of the Participant to exercise one such Option shall not be conditioned on
his or her failure to exercise the other such Option.

6.    OPTION PRICE

      The Option Price for each share of Stock under each Option shall be
determined by the Committee in its absolute discretion, provided, however, that
for an ISO the Option Price shall be not less than the Fair Market Value of the
shares of Stock on the date that the ISO is granted, and for a non-ISO the
Option Price shall not be less than 75% of the Fair Market Value of the shares
of Stock on the date that the non-ISO is granted. If an ISO is granted to a Ten
Percent Shareholder, the Option Price shall be not less than one hundred ten
percent (110%) of the Fair Market Value of the shares of Stock on the date that
the ISO is granted.

7.    TERMS AND CONDITIONS OF OPTIONS

      Options granted pursuant to the Plan shall be authorized by the Committee
and shall be evidenced by agreements ("Option Agreements") in such form as the
Committee shall from time to time approve. Such Option Agreements shall specify
whether the Options covered thereby are intended to qualify as ISOs or Non-ISOs
(and in the case of any Option Agreement which does not contain such
specification, the Options covered thereby shall be deemed to be Non-ISOs) and
shall comply with and be subject to the following terms and conditions:

      (a) Exercise Limitations; No Right to Employment. In no event shall an
Option be exercisable by a Participant who is subject to the provisions of
Section 16(b) of the 1934 Act and rules promulgated thereunder in a manner, or
during a period of time, that would constitute a violation of any such
applicable provisions. Unless otherwise approved by the Committee and set forth
in an Option Agreement, an Option granted under the Plan may be exercised, and
shares of Stock may be acquired, as follows:

      25% of the shares of Stock covered by the Option may be acquired on or
      after the first anniversary of the Grant Date; an additional 25% on or
      after the second anniversary; an additional 25% on or after the third
      anniversary; and the remaining 25% on or after the fourth anniversary of
      the Grant Date.

No Option may be exercised after the expiration of ten (10) years from the Grant
Date (although the term of an Option may be for a shorter period as provided in
the Option Agreement). No Option may be exercised for a fractional share of
Stock. No Option Agreement shall impose upon the Company any obligation to
employ the Participant for any period of time.

      (b) Manner of Exercise. A Participant shall exercise an Option by giving
written notice of such exercise to the Company and paying the Option Price in
full to the Company for the shares to be purchased. The date upon which such
payment is received by the Company shall be the exercise date for the Option.



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      (c) Time and Method of Payment. The Option Price shall be paid in United
States dollars, or by check, bank draft, or money order payable to the order of
the Company, or by payroll deduction if requested by the Participant and
approved by the Committee, or, in the discretion of the Committee, through
delivery of Stock or a combination of cash and Stock. Any Stock so delivered
shall be valued at the Fair Market Value of such Stock on the date of delivery
to the Company. Promptly after the exercise of an Option and the payment of the
full Option Price, the Participant shall be entitled to the issuance of a stock
certificate evidencing his ownership of the appropriate number of shares of
Stock. A Participant shall have none of the rights of a shareholder until shares
are issued to him, and no adjustment with respect to such Participant will be
made for dividends or other rights which accrue prior to the date such stock
certificate is issued.

      (d) Number of Shares. Each Option shall state the total number of shares
of Stock to which it pertains. The number of shares to which a Participant is
entitled under an Option shall be reduced by, and the Option with respect to
such shares shall be deemed surrendered to the extent of, the number of Stock
Appreciation Rights (described in Section 8 below) related to the Option that
have been previously exercised by the Participant, and the number of shares
covered by the Option as to which the Participant has partially exercised his
rights. For ISOs, the aggregate Fair Market Value (determined as of the Grant
Date) of the shares of Stock with respect to which the ISO is exercisable for
the first time by a participant during any calendar year (under all plans of the
Company and its Subsidiaries) shall not exceed $100,000.

8.    STOCK APPRECIATION RIGHTS

      The Committee may grant Stock Appreciation Rights to Participants at the
same time that such Participants are awarded Options under the Plan. Such Stock
Appreciation Rights shall be included in and be part of the Option Agreement
evidencing the Option to which the Stock Appreciation Rights relate.

      (a) Employment Requirement. The Committee may, in its discretion, include
in any Stock Appreciation Rights granted under the Plan a condition that the
participant shall agree to remain in the employ of, and to render services to,
the Company or any of its Subsidiaries for a period of time (specified in the
Option Agreement) following the date the Stock Appreciation Rights are granted.
No such Option Agreement shall impose upon the Company any obligation to employ
the participant for any period of time.

       (b) Grant and Exercise. Each Stock Appreciation Right shall relate to one
share of Stock covered by a specific Option under the Plan and shall be awarded
to a participant, if at all, concurrently with the grant of such Option. The
number of Stock Appreciation Rights granted to a Participant, if any, shall be
equal to the number of shares of Stock that the Participant is entitled to
receive pursuant to the related Option. The number of Stock Appreciation Rights
held by a participant shall be reduced by:

           (1) the number of Stock Appreciation Rights exercised for Stock or
cash by the Participant, and

           (2) the number of shares of Stock purchased by such Participant
pursuant to the related Option.

Each Stock Appreciation Right shall be subject to the same terms and conditions
as the related Option and shall be exercisable only to the extent the Option is
exercisable, provided that no Stock Appreciation Right shall be exercisable for
cash by a Participant who is subject to the provisions of Section 16(b) of the
1934 Act prior to the expiration of the later of: (i) six months after the date
on which this Plan is approved by the shareholders of the Company, or (ii)
twelve months after the Grant Date (and then, in either case, only to the extent
that the related Option is exercisable).

      (c) Manner of Exercise. A Participant shall exercise Stock Appreciation
Rights by giving written notice of such exercise to the Company. The date upon
which the Company receives such notice shall be the exercise date for the Stock
Appreciation Rights.

      (d) Appreciation Available. Each Stock Appreciation Right shall entitle a
Participant to surrender unexercised the related Option to purchase one share of
Stock and to receive in exchange, subject to the provisions of the Plan and such
rules and regulations as from time to time may be established by the Committee,
a payment equal to the excess of the Fair Market Value of a share of Stock on
the exercise date over the Option Price per share of Stock of the related
Option. The aggregate appreciation available to a Participant from any exercise
of Stock Appreciation Rights shall be equal to the number of Stock Appreciation
Rights being exercised, multiplied by the amount of appreciation per Stock
Appreciation Right determined under the preceding sentence.



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      (e) Payment of Appreciation. The total appreciation available to a
Participant from an exercise of Stock Appreciation Rights may be paid to the
participant either in Stock or in cash, or a combination thereof, as elected by
the Participant, provided that the Committee shall have sole discretion to
consent to or disapprove the election of any Participant who is subject to the
provisions of Section 16(b) of the 1934 Act to receive all or part of a payment
in cash (which consent or disapproval may be given at any time after the
election to which it relates). If paid all in cash, the amount thereof shall be
the amount of aggregate appreciation determined under Section 8(d) above. If
paid all in Stock, the number of shares of Stock that shall be issued pursuant
to the exercise of Stock Appreciation Rights shall be determined by dividing the
amount of aggregate appreciation determined under Section 8(d) above by the Fair
Market Value of a share of Stock on the exercise date of the Stock Appreciation
Rights; provided, however, that no fractional shares shall be issued upon the
exercise of Stock Appreciation Rights and cash will be paid in lieu of any such
fractional share.

      (f) Limitations Upon Exercise of Stock Appreciation Rights. A Participant
may exercise a Stock Appreciation Right only at such times and to such extent as
the Option to which the Stock Appreciation Right relates may be exercised, and
if the Participant is subject to the provisions of Section 16(b) of the 1934
Act, exercise of his Stock Appreciation Rights for cash may be limited to
certain time periods as provided in his Option Agreement. Adjustments to the
number of shares of Stock in the Plan and the price per share pursuant to
Section 14 below shall also be made to any Stock Appreciation Rights held by
each Participant. Any termination, amendment, or revision of the Plan pursuant
to Section 15 below shall be deemed a termination, amendment, or revision of
Stock Appreciation Rights to the same extent.

9.    TERMINATION OF EMPLOYMENT

      In the event that the employment of a Participant with the Company or any
of its Subsidiaries shall be terminated (except as set forth in Section 10
below), any Option or SARs that the Participant is entitled to exercise at the
date of termination of employment may, subject to the provisions of the Plan, be
exercised at any time within the thirty (30) day period following the date of
such termination, but in no case later than the date on which the Option
terminates. Any Option or SARs granted under the Plan shall not be affected by
any change of duties or position of the Participant so long as the Participant
continues to be a regular full-time employee of, or otherwise maintains his
relationship with, the Company or any of its Subsidiaries. Any Option or SARs,
or any rules and regulations relating to the Plan, may contain such provisions
as the Committee shall approve with respect to the determination of the date
employment terminates and the effect of leaves of absence. Nothing in the Plan
or in any Option or SARs granted pursuant to the Plan shall confer upon any
Participant any right to continue in the employ of the Company or any of its
Subsidiaries, or interfere in any way with the right of the Company or any of
its Subsidiaries to terminate such employment at any time.

10.   RIGHTS IN EVENT OF DEATH OR DISABILITY

      In the event of termination of employment because of the death or
disability of a Participant, the participant or his legatees, heirs, or legal
representative, as the case may be, shall have the right for one (1) year after
the Participant's death or disability, as the case may be, to exercise any of
the Participant's Options or SARs to the extent that such Participant was
entitled to exercise such Options or SARs on the date of his death or
disability, as the case may be. In no event, however, shall the Options or SARs
be exercisable later than the date on which the Options terminate. For purposes
of this Plan, "disability" shall mean the inability of a Participant to perform
his regular duties with the Company or its Subsidiaries by reason of a medically
determinable physical or mental impairment which can be expected to result in
death within twelve (12) months, or which can be expected to last for a
continuous period of not less than twelve (12) months.

11.   NO OBLIGATIONS TO EXERCISE OPTION OR STOCK APPRECIATION RIGHTS

      The granting of an Option or SAR shall impose no obligation upon the
Participant to exercise such Option or SAR.

12.   TRANSFERABILITY OF OPTION OR SAR

      Options and SARs shall not be transferable other than by will or by the
laws of descent and distribution, and during a Participant's lifetime shall be
exercisable only by such Participant.



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13.   EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN; MERGERS; CHANGE IN CONTROL

      (a) The aggregate number of shares of Stock available for Options under
the Plan, the shares subject to any Option, the Option Price per share, and the
number of related Stock Appreciation Rights shall all be proportionately
adjusted as the Committee deems appropriate to prevent dilution or enlargement
of Participants' rights under the Plan in connection with any increase or
decrease in the number of issued shares of Stock subsequent to the effective
date of the Plan resulting from (1) a subdivision or consolidation of shares or
any other capital adjustment, (2) the payment of a stock dividend, or (3) any
other increase or decrease in such shares effected without receipt of
consideration by the Company.

      (b) If the Company shall be the surviving corporation in any merger or
consolidation, any Option or SAR shall pertain, apply, and relate to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled after the merger or consolidation. Upon
dissolution or liquidation of the Company, or upon a merger or consolidation in
which the Company is not the surviving corporation, all Options and SARs
outstanding under the Plan shall terminate; provided, however, that each
Participant (and each other person entitled under Section 10 to exercise an
Option) shall have the right, immediately prior to such dissolution or
liquidation, or such merger or consolidation, to exercise such Participant's
Options or SARs in whole or in part to the full extent of such Options or SARs,
regardless of whether such Options or SARs would be otherwise exercisable by
such Participant at that time under the terms of the Plan.

      (c) If there is a "Change in Control of the Company", all outstanding
Options granted under the Plan shall immediately become fully exercisable. A
"Change in Control of the Company" shall be deemed to have occurred if any
"person" (as that term is used in Sections 13(d) and 14(d)(2) of the 1934 Act)
becomes a beneficial owner directly or indirectly of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities other than as a result of a merger or consolidation
involving the Company.

14.   AMENDMENT AND TERMINATION

      The Board, by resolution, may amend or revise the Plan to the extent the
Board deems necessary or appropriate. Any amendment, however, that would (1)
increase the aggregate number of shares of Stock that may be issued under the
Plan, (2) materially increase the benefits accruing to Participants, or (3)
modify the requirements as to eligibility for participation in the Plan, shall
be subject to shareholder approval (unless Section 16(b) of the 1934 Act and/or
Rule 16b-3 promulgated thereunder do not require shareholder approval in order
for the Plan to comply with Rule 16b-3). The Board may terminate the Plan at any
time. No amendment, revision or termination of the Plan may, without the written
consent of the holder of an Option, alter or impair any Option or SAR previously
granted under the Plan, except as otherwise authorized in this Plan. Unless
sooner terminated, the Plan shall remain in effect for a period of ten (10)
years following the date that the Plan is adopted by the Board or approved by
the shareholders of the Company, whichever is earlier, at which time no further
Options or SARs shall be granted hereunder. Termination of the Plan shall not
affect any Option or SAR previously granted.

15.   AGREEMENTS AND REPRESENTATIONS OF EMPLOYEES

      (a) Acquiring Stock for Investment Purposes. As a condition to the
exercise of any Option, or of any SAR for which shares of Stock are to be
issued, the Company may require the Participant exercising such Option to
represent and warrant that any shares of Stock acquired at exercise are being
acquired only for investment and without any present intention to sell or
distribute such shares, if, in the opinion of counsel for the Company, such a
representation is required or desirable under the Securities Act of 1933, as
amended (the "1933 Act"), or any other applicable law, regulation, or rule of
any governmental agency. The Company also may require, if its counsel deems it
required or desirable under the 1933 Act or any other applicable law or
regulation, as a condition to the exercise of any Option or SAR, that the
Participant exercising such Option represent and warrant that he will not sell
or offer to sell any shares of Stock acquired at exercise unless a registration
statement shall be in effect with respect to such shares under the 1933 Act and
any applicable state securities laws, or unless he shall have furnished to the
Company an opinion, in form and substance satisfactory to the Company, that such
registration is not required. Certificates representing the shares of Stock
acquired at exercise may, at the discretion of the Company, bear a legend to the
effect that such shares have not been registered under the 1933 Act or any
applicable state securities laws, and that such shares may not be sold or
offered for sale in the absence of an effective registration statement as to
such shares under the 1933 Act and any applicable state securities laws, or an
opinion, in form and substance satisfactory to the Company, that such
registration is not required.



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      (b) Withholding. With respect to the exercise of any Option or SAR granted
under this Plan, each Participant shall fully and completely consent to whatever
action the Committee directs to satisfy the federal and state tax withholding
requirements, if any, which the Committee in its discretion deems applicable to
such exercise or surrender. Upon the partial or full exercise of an Option, or
any SAR for which shares of Stock are to be issued, in the discretion of the
Committee and if the Participant so elects by providing notice to the Company,
the stock certificate representing such shares shall be for the appropriate
number of shares less the number, rounded up for any fraction to the next whole
number, that have a Fair Market Value (as of the date of exercise) equal to such
amount as is determined by the Company to be sufficient to satisfy applicable
federal, state or local withholding tax requirements. The Company shall promptly
remit, or cause to be remitted, to the appropriate taxing authorities the amount
so withheld. Although the stock certificate delivered to the Participant will be
for a net number of shares, such Participant shall be considered, for tax
purposes, to have received the number of shares equal to the full number of
shares for which the Option has been exercised.

16.   RESERVATION OF SHARES OF STOCK

      The Company, during the term of this Plan, will at all times reserve and
keep available, and will seek or obtain from any regulatory body having
jurisdiction any requisite authority necessary to issue and to sell, the number
of shares of Stock that shall be sufficient to satisfy the requirements of this
Plan. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority deemed necessary by counsel for the Company for the
lawful issuance and sale of its Stock hereunder shall relieve the Company of any
liability in respect of the failure to issue or sell Stock as to which the
requisite authority has not been obtained.

17.   EFFECTIVE DATE; OUTSTANDING OPTIONS

      The Effective Date of this Amended and Restated Stock Option Plan shall be
as of February 2, 1998. Options granted under the Original Plan prior to such
date shall be governed hereby, with appropriate adjustments to reflect the
number of shares of Stock subject to each such Option and the Option Price for
same consistent with the conversion of Mobile Gas common stock into EnergySouth
common stock in accordance with the Merger Agreement, and shall otherwise remain
in full force and effect.

                                         MOBILE GAS SERVICE CORPORATION

                                         By:   /s/ John S. Davis
                                               -------------------------------
                                                  John S. Davis
                                         Its:   President
                                               -------------------------------

                                         ENERGYSOUTH, INC.

                                         By:   /s/ John S. Davis
                                               -------------------------------
                                                  John S. Davis
                                         Its:   President
                                               -------------------------------



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