Canada's Husky Energy Gains On Higher Refining Margins
April 26 (Reuters) - Oil producer and refiner Husky Energy Inc's first-quarter profit beat analysts' estimates on Thursday as lower Canadian crude prices lifted its U.S. refining margins by 20 percent, offsetting lower production.
Husky, which runs drilling and refining businesses in Canada, the United States and Asia, said its average U.S. refining margin rose to $8.51 per barrel from $7.08 per barrel a year ago.
However, the oil producer lowered its 2018 output forecast, saying it would temporarily cut heavy oil production due to an oil glut in Canada.
Husky now expects production of 310,000 to 320,000 barrels of oil equivalent per day (boepd) in 2018, down from previous forecast of 320,000 to 335,000 boepd.
Transport bottlenecks in Canada have widened Canadian oil's discount compared to U.S. light crude, and Husky said its differentials averaged C$30.69 per barrel in the first quarter, a 59 percent jump compared with last year.
Western Canadian Select (WCS) - the benchmark for heavy crude - has historically traded at a discount of $15 to West Texas Intermediate (WTI).
However, the wider WTI/WCS gap caused Husky's income from its infrastructure and marketing segment to nearly double to C$138 million ($107.6 million) in the quarter.
Husky also blamed the output cut on a slower ramp of up of its offshore BD Project in Indonesia, which started production last year.
The company's net earnings rose to C$248 million, or 89 Canadian cents per share, in the three months ended March 31, from C$71 million, or 66 Canadian cents per share, a year earlier.
Excluding items, Husky earned 24 Canadian cents per share, beating analysts' estimate of 22 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The company's average quarterly production fell to 300,400 barrels of oil equivalent per day (boepd) from 334,000 boepd a year earlier, due to sale of some of its assets in Western Canada in 2017.
($1 = 1.2826 Canadian dollars)
(Reporting by John Benny in Bengaluru; Editing by Amrutha Gayathri)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds