UPDATE 1-Husky selling part interest in midstream assets for C$1.7 bln

Mon Apr 25, 2016 7:26pm EDT
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(Adds quote, details of deal, earnings)

By Nia Williams

CALGARY, Alberta, April 25 (Reuters) - Oil and gas producer Husky Energy reported a first-quarter loss on Monday and said it has agreed to sell a partial interest in a package of Canadian midstream energy assets to two Hong Kong-based firms for C$1.7 billion ($1.34 billion) in cash.

Husky will retain 35 percent interest and remain operator of the assets, which are located in Alberta and Saskatchewan and consist of around 1,900 kilometres of pipeline, 4.1 million barrels of oil storage capacity and other ancillary assets.

The three companies will form a new limited partnership of which Husky will own 35 percent, Power Asset Holding Ltd will own 48.75 percent and Cheung Kong Infrastructure Holdings Ltd will own 16.25 percent.

Cheung Kong Infrastructure, like Husky, is controlled by Hong Kong billionaire Li Ka-shing.

"We set a high bar for this transaction," said Husky chief executive Asim Ghosh. "It was important to realize full value for these assets and to maintain operatorship and preserve the tight integration between our heavy oil production, marketing and refining assets."

Husky is also marketing around 60,000 barrels per day (bpd) of non-core assets sales in western Canada and 2,000 bpd of royalty production.

In its earnings statement, the company reported larger-than-expected losses from a three-month period in which benchmark crude prices touched 13-year lows around $26 a barrel.   Continued...