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May 6 (Reuters) - Husky Energy Inc, Canada's No.3 integrated oil company, reported a 71 percent drop in quarterly profit, hurt by weak oil and gas prices.
Cash flow from operations, an indicator of the company's ability to pay for new projects, declined more than 45 percent to C$838 million, or 85 Canadian cents per share, in the first quarter ended March 31, Husky Energy said on Wednesday.
Like its peers, Husky, controlled by Hong Kong billionaire Li Ka-shing, is struggling to cope with a 40 percent drop in global crude oil prices since June.
The company has cut its capital spending budget twice in recent months, though it is plowing ahead with new oil sands, heavy oil and offshore projects that will add around 85,000 barrels per day of net production by the end of 2016.
Husky said it expects production to fall in the second quarter ending June due to planned maintenance programs.
First-quarter total production rose more than 9 percent to 356,000 barrels of oil equivalent per day.
Husky's net income fell to C$191 million ($159 million), or 17 Canadian cents per share, from C$662 million, or 66 Canadian cents per share.
Husky said the earnings included C$203 million in deferred tax recovery.
$1 = C$1.20 Reporting by Manya Venkatesh in Bengaluru and Scott Haggett in Calgary; Editing by Kirti Pandey and Joyjeet Das