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April 8, 2005

Mail Stop 3-8

By Facsimile and U.S. Mail

Mr. Charles P. Huffman
Chief Financial Officer
EnergySouth, Inc.
2828  Dauphin Street
Mobile, Alabama 36606

Re:	Form 10-K for the year ended September 30, 2004
	Filed December 14, 2004
	File No.  0-29604

Dear Mr. Huffman:

      We have reviewed your filing and have the following
comments.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
Please be as detailed as necessary in your explanation.   After
reviewing this information, we may or may not raise additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

FORM 10-K FOR THE YEAR ENDED SEPTEMBER 30, 2004

Item 6. EnergySouth, Inc.-Selected Financial Data, page 14

1. We note that the amounts of revenue segregated by class of
customer do not agree to the revenue analysis segregated by
segments
in your MD&A.  It appears that the transportation revenues
disclosed
in the selected financial data is reflected in distribution and
storage.  Please explain why transportation would be part of
distribution and storage.  Please consider a footnote to the
revenue
data segregated by class of customer which reconciles such
disclosure
to the revenue analysis provided in your MD&A.

Item 7A. Quantitative and Qualitative Disclosures About Market
Risk,
page 27.

2. We note that you have entered into certain derivative
transactions
including forward purchases to lock in prices for a majority of
your
expected gas sales during the upcoming winter heating season.
Please
provide the quantitative and qualitative disclosures about market
risk due to changes in commodity prices.   Such analysis should
include the potential loss in future earnings, fair values or cash
flows of your market risk sensitive instruments.  Refer to Item
305
of Regulation S-K.

Item 8.  Financial Statements and Supplementary Data

Notes to Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies, page F-8

3. We note that a certain amount of gas is injected into your
storage
caverns and remains in the cavern to provide sufficient pressure
to
maintain cavern integrity.  Please tell us where this "base gas"
is
classified on your consolidated balance sheets and your basis for
classification.  If such gas is stated at other than cost, please
explain your valuation rationale.

4. If any portion of your regulatory asset balance includes
amounts
on which you do not earn a current return, please tell us and
disclose in future filings the nature and amounts of each of these
assets and the remaining recovery period associated with each of
them.  Refer to the requirements of paragraph 20 of SFAS 71.

Note 3. Property, Plant, and Equipment, page F-15

5. We note that you have $9.3 million of acquisition adjustments
as
of September 30, 2004 and $9.2 million as of September 30, 2003.
Please tell us whether such acquisition adjustments are
recoverable
through rates.  If the acquisition adjustments are not recoverable
in
rates, please explain to us your methodology in determining the
fair
value of the acquired assets at the time of acquisition.  In this
regard, provide relevant details of the acquisition including the
date.  Finally, explain to us how you evaluate impairment on the
acquisition adjustments.

Note 5. Income Taxes, page F-16

6. We note that you have a net deferred tax liability of $20.9
million as of December 31, 2004 and it appears that you have not
capitalized any deferred tax expense as a regulatory asset.  In
this
regard, please tell us how you account for your deferred income
taxes.  In doing so, please explain if you apply flow through or
normalization tax accounting for each major temporary difference.

Note 6. Capital Stock, page F-17

7. Please disclose those securities that could potentially dilute
basic EPS in the future that were not included in the computation
of
diluted EPS because to do so would have been antidilutive for the
periods presented.  Refer to paragraph 40(c) of SFAS 128.

Note 7. Retirement Plans and Other Benefits, page F-19

8. Please include your accumulated benefit obligations for all
periods presented.

9. Please explain to us how you calculate the market related value
of
plan assets as that term is defined in SFAS 87.   Since there are
alternative ways to calculate the market value of plan assets and
it
has a direct impact on your pension expense, we believe you should
disclose how you determine this amount in future filings.

FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2004

General

10. Please revise your future interim filings to address the
comment
listed above, as applicable.

 	Please respond to these comments within 10 business days or
tell
us when you will provide us with a response.  Please furnish a
letter
with your responses to our comments and provide any requested
supplemental information.  Please understand that we may have
additional comments after reviewing your responses to our
comments.
Please file your response letter on EDGAR as a correspondence
file.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

	If you have any questions regarding these comments, please
direct them to John Cannarella, Staff Accountant, at (202) 824-
5384
or, in his absence, to the undersigned at (202) 942-1885.  Any
other
questions regarding disclosure issues may be directed to H.
Christopher Owings, Assistant Director, at (202) 942-1900.

Sincerely,

Jim Allegretto
Sr. Assistant Chief Accountant
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EnergySouth, Inc.
April 8, 2005
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