Husky Energy, Calgary, will reduce its 2020 capital program by $900 million to $2.3-2.5 billion from the previous $3.2-3.4 billion in response to market conditions and will reduce production where it is cash negative on a variable cost basis at current prices. Additional cost reduction initiatives totaling $100 million this year will include a reduction in well servicing activities on uneconomic production, and a halt in exploration activity.
Spending in the upstream sector is expected to be $1.75–1.90 billion, down from $2.625–2.8 billion previously. Spending in the downstream sector remains unchanged at $475–550 million. The overall budget includes exploration capital and other capital expenditures but excludes asset retirement obligations, capitalized interest, and Superior Refinery rebuild capital.
Total upstream production is now expected to be 275,000–300,000 boe/d, down from the previously guided 295,000–310,000 boe/d, including a curtailment allowance of 5,000 b/d in the year’s first half.
Investment in resource plays and conventional heavy oil projects in Western Canada has been halted. The company will focus on optimizing existing production and lowering costs.
Drilling of sustaining pads at all thermal operations has been suspended.
Lloydminster thermal projects scheduled to be delivered beyond 2020 have been deferred and will be reconsidered as market conditions improve.
In the Asia Pacific region, the development of the Block 15/33 oil field offshore China has been deferred by a year. In Indonesia, development of the MDA-MBH natural gas field has been deferred. Liuhua 29-1 field at the Liwan Gas Project is being advanced as planned, with first production expected by the end of the year.
Husky’s total liquidity is $4.9 billion, comprised of $1.4 billion in cash and $3.5 billion in unused credit facilities and the company has no long-term debt maturities until 2022.