Husky Energy posts bigger-than-expected Q3 loss amid oil slump

Husky Energy says it achieved its target of generating over 40 per cent of its production from low-capital projects. Husky photo.

Husky Energy focusing on cutting costs

Oct 27 (Reuters) – Husky Energy Inc, Canada’s No. 3 integrated oil company, reported a bigger-than-expected quarterly loss and joined larger rival Cenovus Energy Inc in trimming its capital budget for the year.

Oil producers have severely curtailed spending in response to a near 60 per cent fall in crude prices since mid-2014.

Click here to watch production manager Dave Kuhnert explain how EndurAlloy™ production tubing has cut Crownquest Operating LLC’s Permian Basin well operating costs and extended well run-times.

Husky said it now expects to spend about C$2 billion ($1.49 billion) this year, below its prior forecast of C$2.1 billion to C$2.3 billion.

The company had previously lowered its capital expenditure plan in January from a forecast of C$2.9 billion to C$3.1 billion.

Husky has achieved its target of generating more than 40 per cent of its production from projects that have low operating costs and capital requirements, Chief Executive Asim Ghosh said in a statement.

“And we have many more such projects in the wings,” said Ghosh on Thursday, a day after announcing that he would retire on Dec. 5 after seven years at the helm.

The company’s shares were down nearly 2 per cent at C$14.96 in afternoon trading on the Toronto Stock Exchange.

Husky’s rival Cenovus Energy also reported a bigger-than-expected third-quarter loss on Thursday and trimmed its 2016 capital spending budget.

Husky’s total production fell about 10 per cent to 301,000 barrels of oil equivalent per day in the third quarter ended Sept. 30.

The Calgary, Alberta-based company said its realized prices for oil and gas fell 16 per cent.

Cash flow from operations shrank to C$484 million from C$674 million.

However, Husky recorded nearly C$1.5 billion in gains related to asset sales, helping it post a quarterly profit of C$1.39 billion, compared with a year-ago loss of C$4.09 billion.

Excluding items, the company lost 10 Canadian cents per share, bigger than analysts’ average estimate of 8 Canadian cents, according to Thomson Reuters I/B/E/S.

(Reporting by Ahmed Farhatha in Bengaluru; Editing by Sriraj Kalluvila, Martina D’Couto and Savio D’Souza)