"We are consistently hitting our marks as we monetize our extensive portfolio of high-return, long-life projects," said CEO
Net earnings of
Upstream production averaged 326,000 barrels of oil equivalent per day (boe/day) compared to 321,000 boe/day in the first quarter of 2013 and 308,000 boe/day in the fourth quarter of 2013, reflecting additions from the Sandall heavy oil thermal development and the Ansell liquids-rich gas resource project. Highlights Include: -- Cash flow from operations was
$1.5 billion, or $1.56per share (diluted), compared to $1.3 billion, or $1.30per share (diluted) in the first quarter of 2013. -- Net earnings were $662 million, or $0.66per share (diluted), compared to $535 million, or $0.54per share (diluted) in the first quarter of 2013. -- Total Upstream production averaged 326,000 boe/day, compared to 321,000 boe/day in the first quarter of 2013. Oil and liquids production was 74 percent, compared to 72 percent a year ago. -- Achieved first gas at the Liwan Gas Project. -- Initiated production at the 3,500 bbls/day Sandall heavy oil thermal project. Current heavy oil thermal production is now more than 45,000 bbls/day, in line with a target of 55,000 bbls/day by 2016. -- Sanctioned a new 3,500 bbls/day heavy oil thermal project at Edam West, with startup scheduled in 2016. -- Increased production at the Ansell liquids-rich gas resource play to approximately 17,000 boe/day. -- The Sunrise Energy Projectis about 87 percent complete and progressing towards startup in the second half of 2014. -- Commenced gas injection at the South White Rose extension in the Atlantic Region, with first oil planned around the end of the year. FINANCIAL AND OPERATIONAL HIGHLIGHTS Three Months Ended Mar. 31 Dec. 31 Mar. 31 2014 2013 2013 1) Daily Production, before royalties Total Equivalent Production (mboe/day) 326 308 321 Crude Oil and NGLs (mbbls/day) 242 224 232 Natural Gas (mmcf/day) 506 504 537 2) Operating Netback ($/boe) (1) 44.81 34.29 31.78 3) Refinery and Upgrader Throughput (mbbls/day) 289 324 327 4) Cash Flowfrom Operations( 2) (Cdn$ millions) 1,536 1,143 1,283 Per Common Share - Basic ($/share) 1.56 1.16 1.31 Per Common Share - Diluted ($/share) 1.56 1.16 1.30 5) Net Earnings (Cdn $ millions) 662 177 535 Per Common Share - Basic ($/share) 0.67 0.18 0.54 Per Common Share - Diluted ($/share) 0.66 0.18 0.54 6) Adjusted Net Earnings( 2) (Cdn$ millions) 716 412 547 Per Common Share - Basic ($/share) 0.73 0.42 0.56 Per Common Share - Diluted ($/share) 0.73 0.42 0.56 7) Capital Investment, including acquisitions (Cdn $ millions) 1,269 1,537 1,152 8) Dividend Per Common Share ($/share) 0.30 0.30 0.30 (1) Operating netback includes results from Upstream Exploration and Production and excludes Upstream Infrastructure and Marketing. (2) Operating netback, cash flow from operations and adjusted net earnings are non-GAAP measures. Refer to the Q1 MD&A, Section 11, which is incorporated herein by reference.
First quarter production was 326,000 boe/day, compared to 321,000 boe/day in the first quarter of 2013. This reflected additions from the Company's heavy oil thermal projects and the Ansell liquids-rich gas resource project.
Overall production weighting in the first quarter was 74 percent oil and liquids compared to 72 percent in the same period in 2013.
WTI prices averaged
KEY AREA SUMMARY THE FOUNDATION BUSINESS -- Heavy Oil
Production from Husky's heavy oil thermal projects was approximately 41,000 bbls/day during the first quarter.
The 3,500 bbls/day Sandall thermal development was brought online in early 2014. Production from seven wells is now averaging 4,500 bbls/day, reflecting the latest in a series of thermal projects that have produced higher than nameplate capacity in their early stages.
A 3,500 bbls/day thermal project has been sanctioned at Edam West, which is scheduled to be brought on production in 2016.
Work continues on advancing the 10,000 bbls/day
Module construction and site clearing has commenced for two new 10,000 bbls/day thermal developments at Edam East and
Twenty-three horizontal wells were drilled in the first quarter out of a planned 140-well program in 2014, while 73 Cold Heavy Oil Production with Sand (CHOPS) wells were drilled out of a planned 177-well program.
Production from the Company's
Gas Resource Plays
A multi-rig drilling program at the Ansell liquids-rich gas resource play is delivering strong results, with average volumes of 17,000 boe/day from the multi-zone play. Eight horizontal wells were drilled and three horizontal wells were completed in the first quarter.
The four-well pad at Kaybob in the
Drilling has commenced in the Strachan Cardium play, with four liquids-rich horizontal gas wells drilled and four wells completed during the first quarter. Further development drilling is planned later in the year.
Oil Resource Plays
A total of 18 horizontal wells were drilled and 22 wells completed over the first quarter, with drilling activities primarily focused on the Viking, Oungre Bakken and North Cardium oil resource plays.
A four-well pad was placed on production at Wapiti Cardium, with results as expected.
The Company completed an expansion of its pipeline system from the Sandall heavy oil thermal development to the existing gathering system that leads to
Front-end engineering design for the crude flexibility project at the
Work was advanced on a new recycle gas compressor at the partner-operated refinery in
Downstream throughputs were 289,000 barrels per day (bbls/day), compared to 327,000 bbls/day in the first quarter of 2013, which takes into account a planned turnaround at the
Asia Pacific Region
The first of three fields to be developed at the
Short-term customer offtake delays, due to reduced demand from three new gas-fired power plants that are undergoing commissioning/operations startup, will result in some production volumes being deferred.
Husky has signed a Production Sharing Contract on the Anugerah block in the
-- Oil Sands
Twelve stratigraphic wells were drilled and an additional 38 square kilometres of 3-D seismic work was acquired in the first quarter to support additional development. Subject to approvals, the second phase of the Central Plant Facility will be developed in two 70,000 bbls/day stages (each with two 35,000 bbls/day plants), bringing total capacity to 200,000 bbls/day (100,000 bbls/day net to Husky.)
Husky is further extending the utilization of the SeaRose FPSO through near-field satellite developments in the Jeanne d'Arc Basin offshore
Drilling is set to resume on a
Gas injection commenced in the first quarter at the South White Rose extension in the White Rose field, with production equipment scheduled for installation in the third quarter and first oil anticipated around the end of the year.
Construction is continuing on a graving dock to support construction of a fixed wellhead platform at West White Rose. Subject to final approvals, first production is scheduled for the 2017 timeframe.
The Company and its partner have secured the West Hercules drilling rig to begin an exploration and appraisal program in the deepwater
The Board of Directors has declared a quarterly dividend of
A regular quarterly dividend on the 4.45 percent Cumulative Redeemable Preferred Shares, Series 1 (the "Series 1 Preferred Shares") will be paid for the period
Following feedback from investors, the Board of Directors has decided to reinstitute a stock dividend program, which allows shareholders to accept dividends declared on the common shares in cash or in common shares.
Shareholders who would like to accept to receive their dividends in the form of common shares are instructed to inform Husky's transfer agent, Computershare, in prescribed form on or before
A conference call will take place on
Canadaand U.S. Toll Free: 1-800-319-4610 Outside Canadaand U.S.: 1-604-638-5340
Canadaand U.S. Toll Free: 1-800-319-6413 Outside Canadaand U.S.: 1-604-638-9010 Passcode: 2658 followed by the # sign Duration: Available until June 8, 2014
Following the conference call, Husky will hold its Annual Meeting of Shareholders at
The archived webcasts of the meeting and the conference call will be available for approximately 90 days.
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", "could", "aim", "vision", "goals", "objective", "target", "schedules" and "outlook"). In particular, forward-looking statements in this document include, but are not limited to, references to:
-- with respect to the business, operations and results of the Company generally: the Company's general strategic plans and growth strategies; and the Company's 2014 production guidance; -- with respect to the Company's
Asia Pacific Region: expected long-term impact of the Liwan Gas Projecton production earnings and cash flows; anticipated deferral of some production volumes resulting from short- term customer offtake delays; and anticipated timing of exploration activity on the Anugerah block in the East Java Basinoffshore Indonesia; -- with respect to the Company's Atlantic Region: anticipated timing of installation of oil production equipment and of first production at the Company's South White Rose Extension project; scheduled timing of resumption of drilling and first production from the North Amethyst Hiberniaformation well; anticipated timing for a drilling program in the Flemish Pass Basinand of a seismic program for the Bay du Nord discovery; and anticipated timing of production from the fixed wellhead platform at West White Rose; -- with respect to the Company's Oil Sands properties: scheduled timing of start up at the Company's Sunrise Energy Project; -- with respect to the Company's Heavy Oil properties: expected timing of first production and anticipated volumes of production at the Company's Rush Lakethermal project; expected timing of first production and anticipated volumes of production at the Company's Edam West, Edam East and Vawnthermal developments; target production and anticipated timing of achieving target production from the Company's heavy oil thermal developments; and the Company's horizontal and CHOPS drilling program for 2014; -- with respect to the Company's Western Canadian oil and gas resource plays: drilling plans at the Strachan Cardium liquids-rich natural gas play; -- with respect to the Company's Infrastructure and Marketing operating segment: anticipated benefits from and scheduled timing of expansions at the Hardistyterminal; and -- with respect to the Company's Downstream operating segment: the anticipated benefits from and scheduled timing of completion of the Lima, Ohiofeedstock flexibility project and the anticipated processing capacity once reconfiguration is complete; and the anticipated benefits from and scheduled timing of completion of a new recycle gas compressor at the partner-operated Toledo Refinery.
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
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.
Disclosure of Oil and Gas Information
The Company uses the terms barrels of oil equivalent ("boe"), which is calculated on an energy equivalence basis whereby one barrel of crude oil is equivalent to six thousand cubic feet of natural gas. Readers are cautioned that the term boe may be misleading, particularly if used in isolation. This measure is primarily applicable at the burner tip and does not represent value equivalence at the wellhead.
FOR FURTHER INFORMATION PLEASE CONTACT: Investor Inquiries:
Dan CuthbertsonManager, Investor Relations Husky Energy Inc.403-523-2395 Media Inquiries: Mel DuvallManager, Media & Issues Husky Energy Inc.403-513-7602 Source: Husky Energy Inc.