CALGARY, Alberta (Reuters) - Canadian integrated oil company Husky Energy Inc (HSE.TO) said on Monday it is buying a refinery in the United States from Calumet Specialty Products Partners LP (CLMT.O) for $435 million in cash.
The refinery in Superior, Wisconsin, has capacity to process 50,000 barrels per day.
The deal, which also includes the refinery’s associated logistics assets, will increase Husky’s refining capacity to 395,000 bpd, the company said.
Husky produces primarily heavy oil from oil sands and conventional operations in western Canada and the deal will help it manage exposure to depressed global crude prices, which are hovering below $50 a barrel on concerns about a persistent supply glut CLc1.
“Acquiring the Superior Refinery will increase Husky’s downstream crude processing capacity, keeping value-added processing in lockstep with our growing production,” said CEO Rob Peabody.
Husky currently produces around 320,000 bpd and aims to grow output to 400,000 bpd by 2021.
Shares of Calumet rose 9 percent to $5.93 in late morning trade on the Nasdaq, while Husky’s shares rose 0.5 percent to C$14.69 on the Toronto Stock Exchange.
Husky said it would retain about 180 workers at the refinery, which can process Canadian heavy crude and light and medium barrels from Canada and the Bakken region, and also boosts the company’s asphalt production capacity.
The company said it is deferring a decision on whether to expand asphalt capacity at its Lloydminster, Saskatchewan, refinery until after 2020 and will be considered again as heavy oil production grows.
BMO Capital Markets was Husky’s financial adviser on the deal and Milbank LLP its legal adviser.
Reporting by Nia Williams in Calgary and Ahmed Farhatha in Bengaluru; Editing by Maju Samuel and David Gregorio