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Husky Energy to sell assets for $1.7 billion

Staff writer |
Husky Energy has struck a deal to sell oil and gas processing assets for $1.7-billion as the company seeks cash to weather the collapse in oil prices.

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Husky said it would retain a 35-per-cent interest in the assets, which include 1,900 kilometres of pipelines plus storage assets and are located mainly in the Lloydminster region of Alberta and Saskatchewan.

Under a new limited partnership, Hong Kong-based Cheung Kong Infrastructure Holdings will hold 16.25 percent and Power Assets Holdings Ltd. will own 48.75 percent.

The sale comes as Calgary-based Husky, controlled by Hong Kong billionaire Li Ka-shing, reported a net loss for the first quarter of $458-million.

“This transaction unlocks significant value and supports our objective of strengthening the balance sheet,” Husky chief executive officer Asim Ghosh said in a statement.

Husky’s net loss compares to earnings of $191-million or 19 cents a share in the same period a year ago.

In the quarter, the company said production averaged 341,000 barrels of oil equivalent per day versus 356,000 barrels a year ago. Husky is still seeking buyers for oil and gas assets producing about 60,000 barrels a day in Western Canada.

Husky also said it could take legal action against China’s CNOOC Ltd. over possible changes in the Guangdong gas market, which it said could lead to lower prices. The two companies are partners in the Liwan deepwater gas in the South China Sea.

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