May 8, 2017 [OPIS] - Husky Energy said on Friday that its first-quarter earnings jumped sharply by C$529 million (US$384.2 million) from a year ago, thanks to an increase in commodity prices, refinery throughputs and margins in Canada and the U.S., production from thermal projects and Liwan gas project.
Husky is an integrated oil company that owns two refineries in the Midwest, one of which is a joint venture with BP. It also owns a light oil refinery in British Columbia.
Net earnings were C$71 million, compared to a loss of C$458 million a year ago.
Total upgrading and refining throughputs averaged 367,000 b/d, compared to 314,000 b/d in the same quarter last year. This contributed to overall capacity utilization of 95.5%.
The Chicago 3:2:1 crack spread averaged US$11.22/bbl compared to US$9.23/bbl in the first quarter of 2016. Average realized U.S. refining margins were US$8.33/bbl compared to US$3.76/bbl a year ago.
Engineering work continued on the proposed asphalt refinery, which would double Husky’s asphalt production capacity. An open house on the project was held in March as part of the regulatory process.
In upstream, Husky’s daily production in the first quarter was 334,000 boe/d, compared with 327,000 boe/d in the fourth quarter of 2016 and 341,000 boe/d in the first quarter of 2016.
Crude and NGL output was 244,000 boe/d, compared with 235,000 boe/d in the fourth quarter of 2016 and 238,000 boe/d in the first quarter of 2016.
Natural gas production was 543,000 boe/d, down from 555,000 boe/d in the fourth quarter of 2016 and 619,000 boe/d in the first quarter of 2016.
The Sunrise Energy Project is now producing 40,000 b/d gross (20,000 b/d net to Husky), with production from 55 well pairs averaging 730 b/d.
WTI prices averaged US$51.91/bbl compared to US$33.45/bbl in the first quarter of 2016.
Average realized pricing for total upstream production was C$41.58 per boe, compared to C$25.02 per boe in the same quarter the year before. This includes average realized gas pricing of C$13.31 per thousand cubic feet (Mcf) for sales gas at Liwan.
Husky’s latest guidance on its projects and refinery turnarounds is mostly unchanged from the previous guidance in December 2016.
A four-week turnaround at the Lloydminster asphalt refinery is underway and expected to be completed the week of May 8.
The Lloydminster Upgrader will undergo a seven-week turnaround beginning in the second quarter.
A five-week partial turnaround is scheduled at the Lima Refinery in the fourth quarter.
Lima refinery’s 40,000 crude flexibility project remains ongoing, with completion set for 2018. So far, this heavy crude processing project is 25% completed, or 10,000 b/d.
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