Husky Energy announces 2020 capital program between $3.2B-$3.4B
Husky Energy's capital program for 2020 will be $3.2B-$3.4B, with average annual Upstream production forecast to be in the range of 295,000-310,000 barrels of oil equivalent per day, inclusive of an allowance for curtailment. The capital program is being reduced by $500M in the 2020-2021 timeframe compared to Husky's May 2019 Investor Day plan, reflecting $100M in reductions in 2020 and $400M in 2021. The oil price assumption for 2020 and 2021 is $55 US WTI per barrel, down from $60 US WTI per barrel in the Investor Day plan, reflecting changing market conditions. At this pricing assumption, the Company's plan generates $500M of free cash flow before dividends in 2020, growing to $1.5B in 2021. Capital spending in 2020 will be directed towards advancing the Lloyd thermal project portfolio, completing Liuhua 29-1, and ongoing construction of the West White Rose Project in the Atlantic region. Capital guidance does not include $450-$525M related to the ongoing rebuild of the Superior Refinery, which is expected to be substantially covered by insurance. 2020 PLAN HIGHLIGHTS: 2020 capital expenditures in the range of $3.2-$3.4B reflect a $100-million reduction compared to the Investor Day plan Average Upstream production range of 295,000-310,000 boe/day; Takes into account reduced capital investment, an allowance of 5,000 barrels per day in the first half of the year for production quotas in Alberta and planned turnarounds; Total Downstream refining and upgrading capacity of 355,000 bbls/day, not including the Superior Refinery; includes 195,000 bbls/day of processing capacity for heavy oil blend; Husky continues to benefit from significant long-term export capacity via multiple pipelines; First oil from the Spruce Lake Central and Spruce Lake North thermal bitumen projects in Saskatchewan, representing 20,000 bbls/day of new production, plus continued advancement of three additional Saskatchewan thermal projects with a combined design capacity of 30,000 bbls/day through 2023; First production from Liuhua 29-1 is expected by the end of 2020, with a target production of 45 million cubic feet per day of gas and 1,800 bbls/day of liquids, Husky working interest; Crude oil flexibility project onstream at the Lima Refinery; heavy oil blend processing capacity increased to 40,000 bbls/day; Ongoing construction at the Superior Refinery, with a return to full operations expected by the end of 2021; Advancing the West White Rose Project, which is about 55% complete with first oil planned around the end of 2022; As at the third quarter, net debt was 1.1 times trailing 12 months funds from operations; total liquidity was $6.4B.