Exclusive: Husky Energy weighs sale of some Eastern Canada assets - sources

Fri Feb 24, 2017 8:18pm EST
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By John Tilak and Nia Williams

TORONTO/CALGARY (Reuters) - Canadian oil and gas producer Husky Energy Inc is mulling paring down its stakes in some of its Eastern Canadian offshore assets, in a move that could fetch several billion dollars, people familiar with the talks told Reuters.

The company, which is controlled by Hong Kong billionaire Li Ka-shing, finds the capital-intensive assets less attractive in a low oil price environment, making it challenging to generate profits, the people said. Husky could invest the sale proceeds in South America, Africa or Asia, the people added.

The sources cautioned, however, that the talks were at an early stage and Husky might not proceed with the divestitures if it does not receive attractive offers.

Asked about the potential sales during the company's earnings call, Chief Executive Rob Peabody said Husky's Atlantic operations were an important part of its portfolio and declined to comment on what he said was speculation.

Offshore projects started to fall out of favor with some producers during the energy downturn as they often require a greater investment, making it harder for companies to make the financial dynamics work.

Husky's offshore assets include White Rose, seen as its crown jewel in the region, as well as Flemish Pass and Terra Nova.

Husky could potentially sell down stakes in Terra Nova, where it has a 13 percent working interest, and Flemish Pass. It is also considering paring down ownership in White Rose, the people added.

Suncor Energy Inc, operator of Terra Nova, could be interested in buying Husky's stake if it becomes available, one of the people said. A Suncor spokesman declined to comment.   Continued...