Husky Energy Reports Record Earnings and Cash Flow



Husky Energy reports its fourth quarter results of 2005. Husky's net earnings were up 200 percent to $669 million or $1.58 per share (diluted) in comparison with the $225 million or $0.53 per share (diluted) in the fourth quarter of 2004. Cash flow from operations climbed 156 percent to $1.2 billion or $2.82 per share (diluted) in the fourth quarter of 2005, compared with $469 million or $1.11 per share (diluted) in the fourth quarter of 2004.

"Husky's fourth quarter earnings tripled to a record $669 million, mainly due to its strong financial discipline and good project execution in a high commodity prices environment," said Mr. John C.S. Lau, President & Chief Executive Officer, Husky Energy Inc. "Husky's East Coast White Rose project commenced production ahead of schedule and on-budget. Regulatory approval was also received for the 200,000 barrel per day Sunrise Oil Sands project."

Production for the fourth quarter of 2005 averaged 328,500 barrels of oil equivalent per day, compared with 324,600 barrels of oil equivalent per day in the fourth quarter of 2004. Total crude oil and natural gas liquids production for the fourth quarter was 215,900 barrels per day, compared with 208,400 barrels per day for the same period in 2004. Natural gas production for the fourth quarter of 2005 averaged 675 million cubic feet per day, compared with 697 million cubic feet per day for the same quarter in 2004.

For the year 2005, Husky Energy Inc. is pleased to report that net earnings were up 100 percent to a record of $2.0 billion or $4.72 per share (diluted), up from $1.0 billion or $2.37 per share (diluted) in 2004. Cash flow from operations in 2005 was $3.8 billion or $8.93 per share (diluted), compared with $2.2 billion or $5.18 per share (diluted) in 2004. Sales and operating revenues in 2005 were $10.2 billion, compared with $8.4 billion in 2004.

Production averaged 315,000 barrels of oil equivalent per day, compared with 325,000 barrels of oil equivalent per day during 2004. Total crude oil and natural gas liquids production for 2005 was 201,700 barrels per day, compared with 210,100 barrels per day in 2004. Natural gas production was 680 million cubic feet per day, compared with 689 million cubic feet per day in 2004.

During the fourth quarter of 2005, Husky achieved first oil from the White Rose project, ahead of schedule and on-budget. The project execution and completion marked a major milestone for Husky. Approximately 2.4 million barrels of oil have been produced from the White Rose field, with 1.74 million net to Husky. The Company is planning to increase gross production to 100,000 barrels per day during the next six months of 2006.

Husky has been awarded exploration rights to two parcels of land in the Jeanne d'Arc Basin with a work commitment of $36 million. The bids represent the expenditure which Husky commits to make in exploring the parcels during the initial five-year period of a nine-year term exploration licence.

In Western Canada, Husky continues to expand production of coal bed methane. Plans for 2006 include the tie-in of 150 net wells, boosting production from 10 million cubic feet per day to 35 million cubic feet per day by the end of 2006.

In December, Husky received regulatory approval of its commercial application for developing its Sunrise Oil Sands project, near Fort McMurray, Alberta. It is estimated that the Sunrise lease contains original bitumen in place of 10.6 billion barrels, and that approximately 3.2 billion barrels of oil resources will be recoverable over its approximate 40 year project life. Husky, which holds a 100 percent interest in the Sunrise lease, intends to develop the 200,000 barrel per day project in phases. Husky is completing a review of its alternatives for upstream development, upgrading, transportation and marketing of the produced bitumen.

At Husky's Tucker Oil Sands project near Cold Lake, Alberta, facility construction continues on-schedule and on-budget. Husky expects to begin steaming in mid-2006 with first oil achieved by the end of 2006.

In the Northwest Territories, Husky has commenced drilling the Stewart D-57 well. This exploration well is targeting a total depth of 3,100 metres and will evaluate multiple zones. Husky began drilling operations for the Summit Creek K-44 well. The K-44 well will appraise the discovery encountered in the Summit Creek B-44 well.

In the South China Sea, a rig has been secured to drill an exploration well on the deep-water 29/26 Block. Drilling will commence in the second quarter of 2006 to test a large natural gas prospect.

Regarding our midstream and downstream operations, the Lloydminster Upgrader debottleneck project continues on-schedule for completion in the third quarter of 2006. Construction of Husky's 130-million litres per year ethanol plant at Lloydminster is progressing with construction approximately 50 percent complete. Project completion is planned for the second quarter of 2006.

A second 130-million litres per year ethanol plant is being constructed at Minnedosa, Manitoba. Detailed engineering of the new facility is progressing and procurement of major equipment and long-lead items is ongoing. The project is scheduled to be completed by mid-2007.

"Husky's long-term strategy is to continue development of its mega projects. The 2006 outlook for commodity prices continues to be strong and we anticipate Husky will have another promising year," said Mr. Lau.
RELATED COMPANIES