Crude Oil & Natural Gas Development

Husky’s assets in the Western Canada Sedimentary Basin (WCSB) provide significant value. Activities, in this area include the increased drilling of infill and step-out wells, the installation of various types of enhanced recovery techniques, such as alkaline surfactant polymer (ASP) floods, as well as increased production from coal bed methane deposits to augment natural gas production.

Foothills and Northwest Plains

Husky’s production is derived from more than 50 oil and gas pools in the Rainbow area covering approximately 1,300 square kilometres. The Company has a 50 percent interest in and operates the Rainbow Lake processing plant. In the Plains region of northwest Alberta, the Company has interests in the Peace River Arch, Bivouac, Ekwan, Cadotte, Boyer, Marten Hills, Martin Creek and Cherpeta areas

In northeastern British Columbia, Husky holds natural gas interests in the Sikanni, Graham, Bullmoose, Federal and Boundary Lake areas. Husky operates the Ram River, Alberta, gas plant and has interests in properties that supply it including Blackstone, Ricinus, Limestone, Clearwater, Benjamin, Brown Creek and Stolberg in the Foothills and Deep Basin areas of Alberta. The Company has an interest in the Caroline gas plant and field. Farther north, Husky has interests in the Valhalla, Wapiti and Kakwa crude oil fields near Grande Prairie; and gas properties in the Ansell, Galloway and Hinton areas near Edson, Alberta.

The Ram River plant and its extensive infrastructure of gathering pipelines, transmission systems and rail lines provide a strategic base for natural gas exploration and development. The region is an active exploration and production area for other producers and provides additional revenue-generating opportunities by processing third party natural gas.

East Central Alberta

East Central Alberta covers the area from Athabasca in the north to Sylvan Lake and Hussar in the south, and as far east as Dodsland, Saskatchewan. In the Athabasca area, Husky is targeting predominately shallow gas in the multi-zone Mannville and Viking formations. The Company operates 23 facilities with pipeline systems and has an average working interest of 90 percent in the producing wells. The Company holds approximately 1,000 square kilometres of undeveloped land with infill, step-out and exploratory wells to optimize recovery and develop new pools to keep its facilities operating at capacity. In 2008, Husky’s gross production from the area averaged 41 million cubic feet per day (mmcf/day) of natural gas and 500 barrels per day (bbls/day) of crude oil.

In the Red Deer and Hussar areas, Husky operates 20 facilities with gas gathering systems. Gross production from this area in 2008 averaged 75 mmcf/day of natural gas and 2,400 bbls/day of crude oil and natural gas liquids. Husky’s strategy is to ensure its facilities are operating at capacity by developing the natural gas and oil potential of the area with infill, step-out and exploratory wells to optimize gas recovery and develop new pools.

The Provost area is predominately a medium crude oil area that averaged gross production of 14 mbbls/day of crude oil and 22 mmcf/day of natural gas, in 2008. The Company’s strategy is to increase the drilling of lower-risk oil wells, develop new oil pools, and focus on managing operating costs and improving oil recovery. It will continue to develop several of its oil pools and optimize waterflooding during 2009. Husky has a large land position and maintains close to 100 percent working interest in most of its facilities.

Southern Alberta and Southern Saskatchewan

Husky’s strategy in Southern Alberta and Southern Saskatchewan is to offset declines in oil and gas production by well workovers, re-activating wells, step-out and infill drilling, exploiting previously bypassed pay, applying improved recovery techniques, and acquiring properties with potential to be leveraged with existing infrastructure.

Husky is a prominent operator in Southern Saskatchewan, producing primarily medium-gravity crude oil with some natural gas and light crude oil. The oil pools in this area are exploited using pressure maintenance and waterflood recovery operations. In 2008, the average production from properties in this district averaged 15 mbbls/day of crude oil and 42 mmcf/day of natural gas. Husky operates 32 oil batteries and eight gas facilities in the district.

At the Shackleton/Lacadena Milk River shallow gas project, 127 wells were drilled and 87 were tied in 2008. The remaining 40 wells are to be tied in during the first quarter of 2009. The property was producing at a rate of 32 mmcf/day of natural gas at the end of December 2008.

Husky received regulatory approval in June 2008 to proceed with enhanced oil recovery at the Gull Lake North ASP (alkaline, surfactant, polymer) flood. The Upper Shaunavon pool has approximately 76 mmbbls PIIP (petroleum-initially-in-place) with an estimated ultimate recovery of 30 percent under waterflood. Potential exists to improve this recovery with ASP. Facility construction commenced in July 2008 and operations start up is expected in late Q2, 2009. Husky holds a 73.6 percent working interest and is the operator of the project.

In southern Saskatchewan, a new ASP project is being evaluated. The Fosterton field is in the final stages of the reservoir simulation. The Roseray pool has approximately 150 mmbbls PIIP with an estimated ultimate recovery of 48 percent under waterflood. The front-end engineering and design (FEED) for the Fosterton ASP project commenced in December. The project is expected to start up in Q2 2012.

Exploration

Husky has a dedicated exploration team focused on natural gas exploration along the western margin of the Western Canada Sedimentary Basin. Exploration is targeted on the Foothills, Deep Basin and northeastern British Columbia regions. These regions are characterized by multi-zone potential and regional tight gas plays, with higher-than average initial rates and longer-life reserves than the more mature portions of the eastern area of the basin. In the Deep Basin and Northern areas, Husky is targeting Cretaceous sandstone reservoirs at shallow and intermediate depths. The stacked nature of many of these reservoir units allows for a single well to probe multiple targets, reducing exploration cost and risk. High impact potential is also present in deeper, higher-risk, Mississippian and Devonian plays in these areas.

At Bullmoose in northeastern British Columbia, Husky has had several significant discoveries and is looking at increasing its presence in the area. Husky is selectively investing in those opportunities that offer the greatest economic benefit relative to the exploration risk.

Coal Bed Methane

Husky has been successful in extracting coal bed methane from its east central and southern Alberta leases. During the fourth quarter of 2008, Husky participated (50 percent working interest) in approximately 50 coal bed methane wells to achieve a total of approximately 110 wells by the end of 2008.

Western Canada & USA Exploration & Production Fact Sheet