For Immediate Release

Energy West, Incorporated to Acquire Natural Gas Utility in Cut Bank, Montana
GREAT FALLS, Mont., December 20, 2007, /PRNewswire-First Call/--ENERGY WEST, INCORPORATED (NASDAQ EWST - News), a natural gas utility and energy marketing company and Cut Bank Gas Company, a natural gas utility serving Cut Bank Montana, today jointly announced the execution of a stock purchase agreement among Energy West and certain shareholders of Cut Bank for the sale of 83.16% of the outstanding shares of Cut Bank Gas Company for a purchase price of $500,000 in shares of common stock of Energy West.   In addition, Energy West will offer to purchase the remaining shares of Cut Bank Gas Company from the shareholders holding such shares for a purchase price of $66.44 per share or approximately $100,000 in shares of common stock of Energy West.  

The acquisition is subject to the approval of the Montana Public Service Commission (MPSC) and is expected to be completed between three to six months.   The acquisition will close on the last business day of the month after all closing conditions have been satisfied, including   MPSC approval, as the case may be.

Rick Osborne, Energy West’s Chairman and Chief Executive Officer indicated that “We are very excited with this opportunity to acquire the Cut Bank Gas Company which fits so well into our strategy of serving smaller and emerging markets.   We are also pleased that its service territory is so close to our production and gathering assets.”

Dan F. Whetstone, President of Cut Bank Gas Company has stated that he “welcomes this opportunity to merge with Energy West, Inc.”    Mr. Whetstone believes that “this is an opportunity for both the Cut Bank Gas Company shareholder and the consumer and we look forward to favorable consideration from the Montana Public Service Commission”.

About Energy West

Energy West, Incorporated distributes and sells natural gas to end-use residential, commercial, and industrial customers in the United States. It currently distributes approximately 25 billion cubic feet of natural gas to approximately 37,000 customers through regulated utilities operating in Montana, Wyoming, North Carolina and Maine.  The company markets approximately 2.0 billion cubic feet of natural gas to commercial and industrial customers in Montana and Wyoming. It also has an ownership interest in approximately 165 natural gas producing wells and gas gathering assets near Cut
Bank, Montana. In addition, the company owns the Shoshone interstate and the Glacier gathering pipeline located in Montana and Wyoming. Energy West was incorporated in 1909 and is headquartered in Great Falls, Montana.

Safe Harbor Regarding Forward-Looking Statements

Energy West is including the following cautionary statement in the release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of Energy West.  Forward-looking statements are all statements other than statements of historical fact, including without limitation those that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” and similar expressions.  Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed.  Factors that may affect forward-looking statements and the Company’s business generally include but are not limited risks associated with contracts accounted for as derivatives, changes in the utility regulatory environment, wholesale and retail competition, weather conditions, litigation risk and various other matters, many of which are beyond Energy West’s control, the risk factors and cautionary statements made in the Company’s public filings with the Securities and Exchange Commission, and other factors that the Company is currently unable to identify or quantify, but may exist in the future.  Energy West expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Energy West’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Further, preparation of financial statements requires Energy West’s management to make significant estimates.  The deferred tax asset, valuation allowance and related extraordinary gain require a significant amount of judgment.  Under federal tax laws, the estimate is based on projected future tax deductions, future taxable income, estimated limitations, the valuation allowance, and other assumptions.  It is possible that this estimate could change and the change could be material.

For additional information or clarification respecting Energy West, please contact: James W. Garrett, President and Chief Operating Officer at 1-440-205-1987.

Our toll-free number is 1-800-570-5688. Our web address is www.energywest.com. Our address is P.O. Box 2229, Great Falls, MT 59403-2229.