Husky Energy Reports 2004 Third Quarter Results

Husky Energy Inc. reports net earnings of $286 million or $0.70 per share (diluted) in the third quarter of 2004, compared with net earnings of $249 million or $0.56 per share (diluted) in the third quarter of 2003. Cash flow from operations was $576 million or $1.34 per share (diluted) in the third quarter of 2004, compared with $604 million or $1.42 per share (diluted) in the third quarter of 2003. Net earnings in the third quarter were negatively impacted by $115 million due to the Company's crude oil hedge program compared with $3 million negative impact in the third quarter of 2003. Net earnings for the third quarter of 2004 included a net gain on U.S. denominated debt translation of $55 million or $0.13 per share (diluted), compared with $3 million or $0.01 per share (diluted) in the third quarter of 2003.

Production in the third quarter of 2004 averaged 324,800 barrels of oil equivalent per day, compared with 300,200 barrels of oil equivalent per day in the third quarter of 2003, an increase of eight percent. Crude oil and natural gas liquids production for the third quarter was 208,100 barrels per day, an increase of three percent from 202,600 barrels per day in the third quarter of 2003. Natural gas production in the third quarter of 2004 was 700.4 million cubic feet per day, an increase of 20 percent from 585.7 million cubic feet per day in the same quarter of 2003.

Husky continued to make good progress on several major projects. The Company filed an application with the Alberta government for approval of its 200,000 barrel per day Sunrise oil sands project. Husky also awarded a lump-sum contract for the Tucker oil sands project's central plant facilities. Construction for the Tucker project is underway and commissioning is scheduled for the third quarter of 2006. On Canada's East Coast, Husky successfully tested the first production well at the White Rose offshore oil field. Based on pressure measurements and flow rate information during the test, the estimated production capability of the well is between 25,000 and 35,000 barrels per day.

"Husky was pleased to sign its seventh petroleum contract with the China National Offshore Oil Corporation for exploration rights at block 29/26 in the South China Sea during the quarter," said Mr. John C.S. Lau, President & Chief Executive Officer, Husky Energy Inc.

"During the fourth quarter, we expect to have an active winter drilling program in Western Canada," Mr. Lau said.

Husky's net earnings for the first nine months of 2004 were $788 million or $1.83 per share (diluted), compared with $1,098 million or $2.65 per share (diluted) for the same period in 2003. As the Company's revenues are largely denominated in U.S. dollars, the weakening of the U.S. dollar has unfavourably impacted Husky's earnings and cash flow. Cash flow from operations for the first nine months of 2004 was $1,747 million or $4.06 per share (diluted), compared with $1,891 million or $4.44 per share (diluted) for the same period in 2003. Before foreign exchange gains on U.S. denominated debt translation and tax rate changes, Husky's operational results were $710 million in the first nine months of 2004, compared to $776 million in the first nine months of 2003. Due to the Company's crude oil hedge program, net earnings in the first nine months of 2004 and 2003 were negatively impacted by $243 million and $10 million respectively.

Production in the first nine months of 2004 averaged 325,200 barrels of oil equivalent per day, compared with 307,600 barrels of oil equivalent per day in the same period in 2003, up six percent. Total crude oil and natural gas liquids production was 210,800 barrels per day, compared with 208,300 barrels per day in the first nine months of 2003. Natural gas production was 686.5 million cubic feet per day, compared with 595.4 million cubic feet per day in the same period last year.
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