CALGARY, Alberta (Reuters) - First-quarter profit at Husky Energy Inc (HSE.TO) jumped 36 percent despite a big drop in production as crude oil prices surged to record levels, Canada’s No. 3 oil explorer and refiner said on Monday.
Husky also boosted its quarterly dividend 21 percent to 40 Canadian cents a share, giving investors including major shareholder Li Ka-shing, the Hong Kong billionaire, rewards from the high commodity prices and mounting cash.
Its net income climbed to C$887 million ($882 million), or C$1.04 a share, from year-earlier C$650 million, or 77 Canadian cents a share.
The earnings beat the average forecast among analysts polled by Reuters Estimates by 2 Canadian cents .
Cash flow, an indicator of the company’s ability to pay for new projects and drilling, rose 16 percent to C$1.54 billion, or C$1.82 a share, from C$1.32 billion, or C$1.56 a share.
Revenue rose 6.9 percent to C$5.09 billion.
Canadian petroleum producers are benefiting from oil prices that averaged a record $97.82 a barrel over the quarter -- more than two-thirds above the average of a year earlier -- as well as from a natural gas price rebound following a long downturn.
Husky is known for oil and gas production in Western Canada, off Newfoundland and in Southeast Asia.
It is a large producer and processor of heavy-grade crude oil, which nearly doubled in price from the first quarter of 2007 amid rising demand.
Overall, the company sold its oil for an average C$79.98 in the quarter, up 52 percent. It sold its natural gas for an average C$7.04 per thousand cubic feet, a 1 percent gain.
Husky produced 350,100 barrels of oil equivalent a day of oil and gas from its properties in Canada and Asia, down 11 percent from 390,000 barrels of oil equivalent a day.
The company said the decline was due to a 13-day maintenance turnaround at its White Rose oil field off Newfoundland and the sale of Western Canadian producing assets.
During the quarter, Husky finalized a deal with BP Plc (BP.L) that swaps a share in a BP Ohio refinery in return for a stake in a Husky oil sands project.
The transaction gives the company a share of a second refinery in the Midwestern state following its acquisition last year of a plant in Lima, Ohio, for $1.6 billion.
The U.S. refining operations generated C$8 million in earnings in the first quarter.
Its refining and marketing business in Western Canada, where it sells gasoline under the Husky and Mohawk banners, generated earnings of C$30 million, a C$10 million increase due partly to stronger asphalt margins, the company said.
Husky shares jumped C$1.25, or nearly 3 percent, to C$45.75 on the Toronto Stock Exchange on Monday. The results were released after the market closed.
Husky stock is up 2.6 percent so far this year.
Reporting by Jeffrey Jones and Scott Haggett; editing by Rob Wilson