Calgary Herald

Oil and gas producer sells some of its assets


Husky Energy Inc. has struck a $1.7-billion deal to sell part of its pipeline business along the AlbertaSas­katchewan border.

The Calgary-based oil and gas producer announced Monday it was selling a 65 per cent interest in the pipeline assets to Cheung Kong Infrastruc­ture Holdings Ltd. and Power Assets Holding Ltd. The two companies, with energy infrastruc­ture assets in China and a handful of other countries, are owned by Husky's controllin­gsharehold­er, Hong Kong billionair­e Li Ka-shing.

The assets include about 1,900 kilometres of pipeline in the Lloydminst­er region, 4.1 million barrels of oil storage capacity at Hardisty and Lloydminst­er, and other ancillary assets.

“We set a high bar for this transactio­n,” Husky chief executive Asim Ghosh said in a release. The company also released its first-quarter

(Cheung Kong Infrastruc­ture Holdings Ltd. and Power Assets Holding Ltd.) have the funding capacity to build the midstream infrastruc­ture requiremen­ts...

earnings Monday, in which Ghosh said the midstream asset sale would be used to strengthen the company's balance sheet.

Husky posted a $458 million net loss in the first quarter compared with net earnings of $191 million during the same period last year. Over the same period, the company's total oil and gas production has fallen as the rout in commodity prices persists.

Factors cited by the company included a $50-million after tax related to its hedging program and an income tax expense of $75 million related to prior years.

In a statement released Monday after markets closed, Husky said its new partners are aligned with expanding its heavy oil business.

"(They) have the funding capacity to build the midstream infrastruc­ture requiremen­ts associated with the planned constructi­on of additional Lloyd thermal projects in Saskatchew­an and Alberta,” it said.

Andy Hunter, deputy managing director of CKI, described the deal as an attractive one for his company which “meets our stringent investment criteria and offers highly predictabl­e revenues and cash flow.”

“The Cheung Kong Group has had investment­s in Canada for around 40 years and finds Canada to have a very good business environmen­t. We will continue to study oil and gas related infrastruc­ture projects and other suitable investment opportunit­ies in Canada in the future,” Hunter added.

Energy companies are selling assets, reducing spending and cutting workers as U.S. crude prices hover above US$40 a barrel almost two years into a slump.

Newspapers in English

Newspapers from Canada