CALGARY, AB--(Marketwired - December 13, 2016) - Husky Energy (
"Our vitals are strong, including a solid balance sheet, a low break-even and a high return portfolio," said CEO Rob Peabody.
"Our investment program will generate higher margins, further lower our corporate break even and increase our free cash flow."
As a result of the ongoing transformation, overall sustaining and maintenance capital requirements have decreased about 25 percent over the last two years and are forecast to be in the range of $2.2-2.3 billion for 2017, added Peabody.
Project investments continue to deliver a minimum 10 percent (after tax) internal rate of return at a WTI oil price in the low $40s US per barrel, and break even with a WTI oil price in the low $30s US per barrel.
The capital expenditure program for 2017 will be in the range of $2.6-2.7 billion. Capital spending is expected to be fully funded within cash flow from operations.
NEAR-TERM GROWTH CATALYSTS
Husky plans to add approximately 45,000 barrels per day (bbls/day) of new higher return production, with average production for the year expected to be in the range of 320,000-335,000 barrels of oil equivalent per day (boe/day).
MID-TERM GROWTH CATALYSTS
The Board has sanctioned several new projects that will provide resilient growth while further lowering the Company's cost base.
STRONG VITALS IN PLACE
Husky's firm foundation for growth is underpinned by the successful delivery of its financial objectives:
Annual average production is expected to be in the range of 320,000-335,000 boe/day.
|Oil and Liquids (mbbls/day)|
|Lloyd and Tucker thermal||103 - 105|
|Oil Sands thermal||20 - 22|
|Lloyd non-thermal||44 - 46|
|Atlantic Region||35 - 37|
|W. Canada (light, medium, heavy and NGLs)||19 - 20|
|Asia Pacific Region|
|Light, medium & NGLs||13 - 15|
|Total Oil and Liquids||234 - 245|
|Natural gas (mmcf/day)|
|Canada||345 - 353|
|Asia Pacific Region||171 - 182|
|Total Natural Gas||516 - 535|
|Total Production (mboe/day)||320 - 335|
Capital Expenditures (1)
|Lloyd and Tucker thermal||600 - 630|
|Oil Sands thermal||90 - 100|
|Lloyd non-thermal||85 - 90|
|Atlantic Region||320 - 335|
|W. Canada (light, medium, heavy and NGLs)||60 - 65|
|W. Canada natural gas||150 - 160|
|Asia Pacific Region||230 - 240|
|Upstream Total||1,535- 1,620|
|Unallocated capital||200 - 250|
|Downstream(2)||725 - 765|
|Corporate||95 - 105|
|Total||2,555 - 2,740|
(1) All amounts exclude asset retirement obligations, capitalized interest and administration.
(2) Includes planned turnarounds.
2017 PLANNED MAINTENANCE AND TURNAROUNDS
2016 GUIDANCE ON TRACK
Production for 2016 is expected to be within guidance at 318,000-320,000 boe/day. This was achieved even with the sale throughout the year of more than 30,000 boe/day of production, and does not include 47 mmcf/day of deferred revenue from production at the Liwan Gas Project, for which cash has been received.
The planned capital expenditure program was completed under budget with additional scope. Capex for the year is anticipated to be about $2.0 billion, about $100 million below the guided range. This reflects the ongoing cost reduction program, significant procurement savings and improved productivity throughout 2016.
U.S. refining margins are expected to remain under pressure in the fourth quarter.
CONFERENCE CALL AND INVESTOR PRESENTATION
A conference call will be held on Tuesday, December 13 at 9 a.m. Mountain Time (11 a.m. Eastern Time) to discuss the Company's 2017 production and capital expenditure guidance. CEO Rob Peabody and CFO Jon McKenzie will participate in the call.
An investor presentation to accompany the Guidance release has been posted on the Company's website at www.huskyenergy.com
To listen live:
Canada and U.S. Toll Free: 1-800-319-4610
Outside Canada and U.S.: 1-604-638-5340
To listen to a recording (after 10 a.m. Dec. 13)
Canada and U.S. Toll Free: 1-800-319-6413
Outside Canada and U.S.: 1-604-638-9010
Passcode: 0748 followed by # sign
Duration: Available until January 16, 2017
Audio webcast: Available for 90 days at www.huskyenergy.com under Investor Relations
Husky Energy is one of Canada's largest integrated energy companies. It is headquartered in Calgary, Alberta, Canada and its shares are publicly traded on the Toronto Stock Exchange under the symbols HSE, HSE.PR.A, HSE.PR.B, HSE.PR.C, HSE.PR.E and HSE.PR.G. More information is available at www.huskyenergy.com
Certain statements in this news release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. The forward-looking statements contained in this news release are forward-looking and not historical facts.
Some of the forward-looking statements may be identified by statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "is targeting", "estimated", "intend", "plan", "projection", "forecast, "guidance", "could", "aim", "vision", "goals", "objective", "target", "schedules" and "outlook"). In particular, forward-looking statements in this news release include, but are not limited to, references to:
Although the Company believes that the expectations reflected by the forward-looking statements presented in this news release are reasonable, the Company's forward-looking statements have been based on assumptions and factors concerning future events that may prove to be inaccurate. Those assumptions and factors are based on information currently available to the Company about itself and the businesses in which it operates. Information used in developing forward-looking statements has been acquired from various sources including third-party consultants, suppliers, regulators and other sources.
Because actual results or outcomes could differ materially from those expressed in any forward-looking statements, investors should not place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes will not occur. Some of these risks, uncertainties and other factors are similar to those faced by other oil and gas companies and some are unique to Husky.
The Company's Annual Information Form for the year ended December 31, 2015 and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com and the EDGAR website www.sec.gov) describe risks, material assumptions and other factors that could influence actual results and are incorporated herein by reference.
Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable securities laws, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent upon other factors, and the Company's course of action would depend upon its assessment of the future considering all information then available.
This news release contains certain terms which do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. None of these measurements are used to enhance the Company's reported financial performance or position. There are no comparable measures to these non-GAAP measures in accordance with IFRS.
These non-GAAP measures are considered to be useful as complementary measures in assessing Husky's financial performance, efficiency and liquidity. These terms include:
Disclosure of Oil and Gas Information
The Company uses the terms barrels of oil equivalent ("boe"), which is consistent with other oil and gas companies' disclosures, and is calculated on an energy equivalence basis applicable at the burner tip whereby one barrel of crude oil is equivalent to six thousand cubic feet of natural gas. The term boe is used to express the sum of the total company products in one unit that can be used for comparisons. Readers are cautioned that the term boe may be misleading, particularly if used in isolation. This measure is used for consistency with other oil and gas companies and does not represent value equivalency at the wellhead.
Note to U.S. Readers
All currency is expressed in Canadian dollars unless otherwise directed.
For further information, please contact:
Manager, Investor Relations
Husky Energy Inc.
Manager, Media & Issues
Husky Energy Inc.