Crude Oil and Natural Gas Development

Husky's assets in Western Canada comprise a large percentage of its overall production.

The Western Canada Sedimentary Basin (WCSB) is mature in terms of conventional oil and gas opportunities; however it is undergoing a phase of regeneration as a result of the application of new technologies such as horizontal wells with multi-zone fracturing.

To offset the decline in mature fields, Husky is investing capital in new developments such as oil and liquids-rich gas resource plays where top-quartile metrics can be achieved over the project life.

Husky is advancing its oil resource play position with existing activities in the Viking, Bakken, Lower Shaunavon and Cardium formations, with approximately 500,000 net acres of oil resource play inventory.

It has a growing position in Western Canada gas resource plays, with approximately 800,000 net acres associated with both liquids-rich and dry gas positions.

Husky's activities in the WCSB include the application of enhanced recovery techniques such as alkaline surfactant polymer (ASP) floods.

Foothills and Northwest Plains

A large portion of Husky's production in the Foothills and Northwest Plains region is derived from more than 50 oil and gas pools in the Rainbow area of northwest Alberta. It has a 100 percent interest in and operates the Rainbow Lake Processing Plant.

Husky operates the Ram River Sour Gas Plant and has interests in producing properties that supply the plant. The Ram River Gas Plant and its extensive infrastructure of gathering pipelines, transmission systems and rail lines provides a strategic base for natural gas exploration and development. Revenue is generated from the third-party gas processed at the plant.

Looking forward, liquids-rich gas and oil and gas resource plays will form an increasing component of this business unit's production.

East Central Alberta

East Central Alberta covers the area of Athabasca in the north to Sylvan Lake and Hussar in the south, and east to Dodsland, Saskatchewan. Husky is exploiting resources close to existing infrastructure, maximizing capital efficiency, and operating its facilities at capacity to minimize costs. It is leveraging new technologies such as multi-lateral horizontal drilling and multi-zone fracturing.

The Company is evaluating enhanced recovery options to revitalize older pools, maximizing production and reserves recovery. Husky operates more than 70 facilities with supporting pipeline systems and has an average working interest in the area of more than 90 percent in producing wells.

Southern Alberta and Southern Saskatchewan

Husky's approach in Southern Alberta and Southern Saskatchewan is to offset declines in existing oil and gas production by conducting well workovers, re-activations, step-out and infill drilling, exploiting previously bypassed pay zones and applying improved recovery techniques. It has an average working interest in the area of more than 80 percent in the producing wells and operates 65 facilities.

Oil resource plays are a key component of this business unit's approach.

Exploration

Husky is focused on natural gas exploration along the western margin of the Western Canada Sedimentary Basin in the Foothills, Deep Basin and northeastern British Columbia regions. These areas are characterized by stacked multi-zone potential and regional gas and liquids-rich resource plays, possessing higher-than-average initial rates and longer-life reserves than the more mature portions of the eastern area of the basin.

Husky's extensive land base provides it with a strong position in many developing oil resource plays that are optimized by the application of new drilling and completion technologies.

The Company has been active in the Central Mackenzie Valley in the Northwest Territories for more than a decade. In July, 2011 Husky acquired exploration rights to two parcels of land in the region. The parcels each contain more than 87,000 hectares and were awarded 100 percent to Husky by the Northern Oil and Gas branch of Aboriginal Affairs and Northern Development Canada.

Located near the town of Norman Wells, the exploration lands complement Husky's existing portfolio and represent a strategic growth opportunity.