Despite lower year-on-year earnings, Husky Energy Inc. said Tuesday it has advanced in its major strategic priorities over the second quarter of 2012, underpinned by good operational and financial results across the company. Net earnings for the quarter were $431 million, or $0.43 per share (diluted), down from $669 million, or $0.71 per share (diluted) in the second quarter of 2011.
“Amidst ongoing global economic uncertainty and commodity price volatility, we continue to progress our business plans,” said CEO Asim Ghosh. “This quarter demonstrates our focus on operational performance and achieving the strategic targets we set out at the end of 2010, as we continue to execute the next stages of our growth pillars.”
Work continued on repositioning and developing the Western Canada and Heavy Oil foundation. First oil was achieved at the 8,000 barrels per day (bbls/day) Pikes Peak South and 3,000 bbls/day Paradise Hill heavy oil thermal projects, which are expected to ramp up by the end of the year. The 3,500 bbls/day Sandall thermal project was sanctioned, with production expected in 2014.
The Company achieved significant milestones across its growth pillars with the completion of the shallow water platform jacket at the Liwan Gas Project in the Asia Pacific Region, the construction of approximately half of the field facilities at the Sunrise Energy Project and the award of contracts to evaluate potential extension options at the White Rose field in the Atlantic Region.
Cash flow from operations of $1,153 million and net earnings of $431 million were achieved, reflecting impacts from the SeaRose and Terra Nova Floating Production Storage and Offloading (FPSO) offstations that were factored into annual production guidance. The SeaRose is expected to return to operations with production ramping up in the third quarter as per schedule. The Terra Nova offstation program began June 8 and is expected to last approximately 21 weeks.
Highlights include the following:
- Cash flow from operations of $1,153 million, or $1.17 per share (diluted), compared to $1,511 million, or $1.67 per share (diluted) in the second quarter of 2011.
- Net earnings for the quarter were $431 million, or $0.43 per share (diluted). This compared to $669 million, or $0.71 per share (diluted) in the second quarter of 2011.
- Total production before royalties for the quarter averaged 281,900 barrels of oil equivalent per day (boe/day), reflecting the SeaRose and Terra Nova FPSO offstation impacts of approximately 34,000 boe/day.
- First oil achieved at both the Pikes Peak South and Paradise Hill heavy oil thermal projects, with a gradual increase to full volumes of 8,000 bbls/day at Pikes Peak South and 3,000 bbls/day at Paradise Hill expected by the end of the year.
- Sanctioned the 3,500 bbls/day Sandall thermal project, with production expected in 2014.
- Completed detailed engineering on field facilities at the Sunrise Energy Project, with completion of approximately 50 percent of field facilities and 30 percent of the Central Processing Facility at the end of the quarter.
- Installed all nine subsea production trees on wells at the Liwan 3-1 gas field, with six associated upper completions installed and flow test rates as expected, and completed construction on the shallow water jacket.