February 26, 2016 / 11:23 AM / 4 years ago

Husky Energy posts smaller-than-expected loss due to costs cuts

CALGARY, Alberta (Reuters) - Husky Energy Inc (HSE.TO), Canada’s No. 3 integrated oil company, posted a smaller-than-expected quarterly loss on Friday as cost cuts help cushion the impact of slumping crude oil prices.

Husky Energy's President and CEO Asim Ghosh addresses shareholders during the company's annual general meeting in Calgary, Alberta, May 7, 2014. REUTERS/Todd Korol

The company posted a loss of C$69 million ($51 million), or 9 Canadian cents per share, for the fourth quarter, compared with a loss of C$603 million, or 65 Canadian cents per share, a year earlier.

The year-ago quarter included a non-cash charge of C$622 million related to the impairment of certain mature assets.

Operating losses were 5 Canadian cents per share, lower than analysts’ estimates of 10 Canadian cents.

“We are now well into what has become one of the largest oil price routs in history,” Husky Chief Executive Officer Asim Ghosh said on a fourth-quarter earnings call with analysts, adding that the company’s strategy was standing it in good stead.

Husky shares were last up 4.8 percent on the Toronto Stock Exchange at C$14.09, boosted by a rally in benchmark crude oil prices. [O/R]

Husky, controlled by Hong Kong billionaire Li Ka-shing, said it is steadily ramping up production at its joint venture Sunrise oil sands project in northern Alberta. The steam-assisted gravity drainage (SAGD) project is producing around 25,0000 barrels per day, although the company said it will not push the pace of new production given low oil prices.

Sunrise is scheduled to hit 60,000 bpd by the end of 2016, and investors are keeping a close eye on whether Husky will meet that target.

“We continue to believe that, although the asset is ramping up slightly slower than some other SAGD projects, it is still too early in the project’s startup to determine if the asset is on track to meet expectations,” AltaCorp Capital analysts said in a note.

Husky has hired financial advisers to help with a previously announced plan to sell some midstream and 55,000 bpd of oil and gas production assets in western Canada. The company said in December that it was looking to sell the assets to strengthen its balance sheet and meet debt obligations.

Last month the Calgary-based company scrapped its dividend, and cut its capital budget and production guidance for the year as it tries to cope with the prolonged slump in crude oil prices.

On Friday’s call the company said it has halted a “modest amount,” less than 1,000 bpd of uneconomic conventional heavy crude production in the Lloydminster region.

Additonal reporting by Anet Josline Pinto in Bengaluru; Editing by Savio D'Souza and Cynthia Osterman

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