Husky Energy earnings beat expectations, shares rise
(Reuters) - Husky Energy Inc (HSE.TO: Quote), Canada's No. 3 integrated oil company, reported a smaller-than-expected quarterly loss on Friday as its focus on fewer, more efficient resource plays helped reduce production costs.
The strong results sent shares up 2.66 percent to C$15.83 on the Toronto Stock Exchange, even as the Calgary-based company rushed to clean up after oil spilled into a major western Canadian river on Thursday.
Production operating costs fell about 12 percent to $10.79 per barrel in the second quarter from a year earlier, as the company benefits from its six-year-long effort to transform its business by investing in projects with lower costs.
By year's end, more than 40 percent of the company's output is expected to come from low break-even projects, up from just 8 percent in 2010, when it began the turnaround, Husky said in June.
The company also has sold non-core assets, including royalty interests in Western Canada, for about C$1.2 billion.
Speaking on an analyst call, chief financial officer Jon McKenzie said the company had closed a few small asset sales in July but bulk of its deals were done for now.
"We said at the beginning of this program this wouldn't be a fire sale," he said. "If the market changes and allows us to further restructure, we'd consider it but the bulk of the heavy lifting is now behind us."
Husky's total production fell about 6 percent to 316,000 barrels of oil equivalent per day (boepd) in the three months ended June due to planned maintenance and the Fort McMurray wildfire in Alberta.
The company said its Sunrise Energy Project was running at roughly the same level as before the fire and said it expects annual production at the low end of its forecast 315,000-345,000 boepd. Continued...