About Husky

Headquartered in Calgary, Alberta, Husky Energy Inc. is one of Canada’s largest integrated energy and energy-related companies, with upstream, midstream and downstream segments operating from Western Canada, to offshore Canada’s East Coast, the United States, China, Indonesia and Greenland.

Husky is a financially disciplined, integrated energy company with a consistent record of strong operational and financial performance. Husky provides investors with a top quartile yield and prudent business model which combines quality investment and operational excellence. Management has a proven track record of executing projects on time and on budget, achieving project goals and creating shareholder value. Husky Energy Inc. is listed on the Toronto Stock Exchange under the symbol HSE.

Husky Share Price Performance vs. Indices

Husky Energy Inc. commenced trading on the Toronto Stock Exchange in 2000. Financial performance has exceeded the S&P/TSX Energy Index and the S&P/TSX Composite Index.

During the past 10 years Husky’s financial performance has exceeded its peers on the S&P/TSX Energy Index and the S&P/TSX Composite Index.

Operational Milestones

During 2008, Husky achieved record financial performance and advanced a number of projects including:

• 114 million barrels of crude produced from White Rose;
• commenced work on the North Amethyst satellite development offshore Newfoundland and Labrador;
• finalized a joint venture with BP in Sunrise Oil Sands development and crude oil processing at the Toledo Refinery in Ohio, U.S.A.;
• agreed with CNOOC (China National Offshore Oil Corporation) to jointly develop the Madura BD gas assets in Indonesia. Subsequently, the Madura BD Project Plan of Development was approved by the Indonesian Government;
• spudded the first appraisal well at Liwan in the South China Sea and advanced pre-FEED (Front-end engineering design) studies for Liwan development; expanded strategic positions in the exploration portfolio, including the acquisition of lands in the Columbia River Basin, in Washington and Oregon, U.S.A., and the acquisition of exploration blocks offshore Newfoundland and Labrador, Indonesia and China;
• Husky’s 130 million litres per year Minnedosa, Manitoba, Ethanol Plant achieved full production;
• established an office in Columbus, Ohio, U.S.A. to market products from the Lima Refinery;

• since May 1996, the Husky Lloydminster Upgrader has operated 12.5 years achieving six million working hours without an employee lost time accident.

Upstream

Husky’s upstream operations include the exploration, development and production of crude oil, bitumen and natural gas in Western Canada and the northwest U.S.A., offshore Canada’s East Coast, offshore China and Indonesia, and Greenland.

Western Canada and U.S.A.

Husky’s crude oil and natural gas exploration and production business in the Western Canada Sedimentary Basin is managed by three business units: Foothills and Northwest Plains, East Central Alberta, and Southern Alberta and Saskatchewan. Higher-impact gas exploration is the main focus in the western portion of the basin in the Foothills, Deep Basin and Northern Region. Husky’s strategy is to develop resource plays such as tight gas reservoirs and coal bed methane (CBM), increase reservoir recovery and leverage existing infrastructure.

Heavy Oil

A leader in the development of heavy oil since 1938, the Company utilizes primary or “cold” production, enhanced oil recovery (EOR) and thermal recovery to optimize production and offset declines from existing reservoirs. In the Lloydminster area, Husky holds 8,000 square kilometres of leases with more than 3,200 producing wells and a discovered petroleum-initially-in-place (PIIP) of 9.5 billion barrels of which approximately seven percent has been recovered.

The majority of the heavy oil is upgraded at Husky’s facility in Lloydminster and used as feedstock at the Company’s Lloydminster Asphalt Refinery or sold into the market.

Oil Sands

With more than 44 billion barrels of discovered PIIP and approximately 2,162 square kilometres of undeveloped Alberta oil sands leases, the Company has a substantial and diverse asset base which will provide medium to long-term growth for Husky.

Husky and BP created a 50/50 partnership to form an integrated North American oil sands business. Husky operates the Sunrise Oil Sands Project in Alberta, Canada, and BP operates the Toledo refinery in Ohio, U.S.A. Representing good long-term growth opportunities, work on the Caribou and Saleski projects was significantly reduced in the last quarter of 2008 reflecting current economic conditions. Discovered PIIP at Caribou is 2.5 billion barrels and at Saleski is more than 32 billion barrels.

Canada’s East Coast and Greenland

Husky has a significant presence offshore Newfoundland and Labrador. The Company has strong growth potential in the area with exploration acreage totalling 15,000 square kilometres and interests in 22 significant discovery licences, 17 exploration licences and six production licences. Husky is the operator and holds a 72.5 percent interest in the White Rose oil field and a 12.51 percent working interest in the Terra Nova oil field.

The White Rose field, 350 kilometres southeast of St. John’s, Newfoundland and Labrador, produced 114 million barrels of crude oil by the end of the year in total.

Husky holds interests in three licenses - Blocks 5, 6 and 7 – totalling 35,000 square kilometres offshore western Greenland.

South East Asia

South East Asia is a major focus for Husky’s upstream operations with strong prospects in proximity to growing economies with increasing energy demands. A major lease holder, Husky has seven exploration blocks covering more than 32,767 square kilometres offshore China.

The Company made a significant discovery in the South China Sea in 2006 at Liwan. The West Hercules deep water drilling rig spudded a delineation well at Liwan in November 2008, the first of a program that will include delineation of the Liwan field and exploration wells on other prospects in the area.

Husky has extensive holdings offshore Indonesia, and in 2008 signed an agreement with China National Offshore Oil Corporation (CNOOC) to jointly develop the Madura BD gas field PSC which covers 2,795 square kilometres. Husky also holds 100 percent working interest in the East Bawean II and North Sumbawa II PSCs.

Midstream

Husky’s midstream assets are strategically located throughout Western Canada and connect with major North American transportation systems. The operations include the Lloydminster Heavy Oil Upgrader and a 2,000-kilometre crude oil pipeline system. The Lloydminster Pipeline Integrity group achieved five years without a recordable incident, and the Pipeline Operations group achieved more than 19 years without a lost-time accident.

Heavy Oil Upgrader

The 82,000 barrels per day Lloydminster Upgrader processes heavy oil feedstock into premium-quality synthetic crude oil for refiners, and 5,000 barrels per day of low-sulphur diesel. By the end of the year, employees at the Upgrader had achieved more than six million working hours without a lost-time accident.

Facilities & New Ventures

Expansion of Husky’s mainline pipeline between Lloydminster and Hardisty was completed in 2008 to increase volumes carried for Husky and third party owners and reduce energy costs. The Hardisty terminal which blends various crude oil streams for Husky and third parties, handled 25 percent of Canada’s total oil exports to the United States.

In total, Husky has 39.6 billion cubic feet of owned and contracted natural gas storage capacity. Additional midstream assets include a 50 percent interest in a 215-megawatt cogeneration facility at Lloydminster and a 90-megawatt cogeneration plant at Rainbow Lake, Alberta.

Commodity Marketing

Husky’s commodity marketing aggregates, supplies, transports, brands, stores, prices, sells and administers proprietary and third party crude oil, natural gas, natural gas liquids, sulphur and petroleum coke. In 2008, it marketed in excess of 1.1 million barrels of oil equivalent per day.

Downstream

Husky’s downstream or refined products activities include the refining, marketing and distribution of gasoline, diesel, aviation and specialty fuels, asphalt, ethanol and ancillary services in Canada and the United States. Retail outlets sold almost three billion litres of gasoline and diesel in 2008.

Refining

Lima, Ohio

The 160,000 barrels per day Lima Refinery, which Husky acquired in 2007, produces gasoline, diesel and aviation fuels that meet U.S. clean fuel standards. An engineering study was completed in 2008 to determine the reconfiguration of the refinery necessary to process heavier crude oil feedstocks from Western Canada operations.

Toledo, Ohio

Agreements with BP in 2008 assigned Husky a 50 percent interest in BP’s 160,000 barrels per day refinery near Toledo, Ohio.

Prince George, British Columbia

Husky’s 12,000 barrels per day Prince George Light Oil Refinery produces low-sulphur gasoline and diesel fuels.

Asphalt Refining & Marketing

The Company’s 28,000 barrels per day asphalt refinery in Lloydminster, Alberta, is a major refiner and marketer of asphalt products used in road construction, maintenance and building products, locomotive blendstock and specialized oil field products.

Ethanol

Husky is Western Canada’s largest producer of ethanol which is blended with gasoline to reduce emissions. The Company’s ethanol facilities in Lloydminster, Saskatchewan, and Minnedosa, Manitoba, use non-food grade grain to produce 260 million of litres of ethanol per year. A co-product, dried distillers grain with solubles (DDGS), is used as a high-protein feed supplement by livestock producers.

Retail Marketing

The Company markets gasoline, diesel fuel and ancillary services through more than 500 Husky and Mohawk retail outlets, travel centres and bulk distributors. Travel centres are located along major Canadian highways and serve retail and commercial markets 24 hours a day, 365 days a year with quality products and services. The retail outlets market Husky’s ethanol-blended fuel under the “Mother Nature’s Fuel” brand name.

Sustainability

Husky is committed to addressing health, safety, environmental and social issues in all aspects of the business and in a sustainable manner. Husky balances sustainable development and environmental stewardship without compromising the future.