Husky Announces Increase in Production
Husky says its net earnings were positively impacted by a nine percent increase in production, which averaged 288,900 barrels of oil equivalent per day in the second quarter compared to 264,000 barrels of oil equivalent per day in the same quarter last year, higher prices on crude oil production, a foreign exchange gain on the Company's U.S. dollar denominated debt and a lower income tax provision.
"This was the first full quarter of production contribution from Terra Nova," said Mr. John C.S. Lau, President and Chief Executive Officer of Husky. "In addition, first oil was achieved at the Wenchang project in the South China Sea in July which will add oil production and cash flow in the future. We continue to make progress on the White Rose offshore project."
First oil was achieved at the Wenchang offshore project on July 7, 2002. Husky has a 40 percent working interest in Wenchang. The peak production is expected to be 50,000 barrels of oil per day. The project is anticipated to add an annual average 8,000 barrels of oil per day to Husky's production in 2002 and 20,000 barrels of oil per day when it reaches peak production. Production from the Wenchang project has to-date exceeded expectations.
Lloydminster heavy crude oil production increased during the second quarter of 2002 to an average of 76,900 barrels of oil per day from 60,300 barrels of oil per day in the same period in 2001 due to the 2001/2002 drilling program, well optimization program, higher cold production and the acquisition of the Bolney/Celtic properties in the third quarter of 2001.
Husky's production during the second quarter of 2002 averaged 289 mboe/day, an increase of nine percent over the second quarter of 2001. Higher production of light/medium crude oil and NGL was due to production from the Terra Nova oil field, which achieved first oil on January 20, 2002, which offset lower production of light/medium crude oil and NGL from Western Canada. Production from Terra Nova averaged 15 mbbls/day (net to Husky) during the second quarter of 2002. Lloydminster heavy crude oil production increased by 28 percent in the second quarter of 2002 as a result of the 2001/2002 drilling program, well optimization program, higher cold production and the acquisition of the Bolney/Celtic properties in third quarter 2001. Natural gas production increased marginally as new well tie-ins from the winter shallow gas program in northwest Alberta offset natural declines. Light/medium crude oil production from operations in Western Canada decreased during the second quarter of 2002 compared with the second quarter of 2001 as a result of natural declines, higher turnaround and maintenance activity and reduced drilling and workovers as a result of an extended spring breakup.
Development drilling during the second quarter of 2002 resulted in 112 net oil wells (second quarter 2001 - 129 net wells) and 10 net natural gas wells (second quarter 2001 - 17 net wells) in Western Canada with a success rate of 95 percent.
Husky has updated its production forecast for 2002. Husky anticipates that 2002 production will average between 295 and 315 mboe/day. Production of light and medium crude oil and NGL is anticipated to average between 125 and 135 mbbls/day. Lloydminster heavy crude oil production is estimated to average between 77 and 80 mbbls/day. Natural gas production is estimated to average between 570 and 600 mmcf/day.