The transaction, which is subject to regulatory approvals, is scheduled to be closed in approximately six to 12 months.
The transaction also includes a working capital adjustment at closing and a post-closing working capital true-up.
Under the terms of the agreement, Energy West and Black Hills will enter into a transition services agreement to insure a seamless transition for Energy West Wyoming’s customers in Wyoming.
The proceeds from the transaction will be used by Energy West to reinvest into the business to generate high returns on its invested capital.
Gas Natural president and chief executive officer Gregory Osborne said: "We believe our system expansion, strong safety record as well as our productive and dedicated team enables us to apply our resources to reach untapped markets, while enabling stronger earnings power.
"The divestiture of our Wyoming operations reflects our strategic plan to redeploy assets and focus resources where we can earn the greatest return for our shareholders.
"We are working to build an efficient, quality natural gas utility serving diverse geographic markets that present unique expansion and earnings potential."
