Husky posts $4.1B loss

Photo: Contributed - Husky

Husky Energy is recognizing the impaired value of its assets, resulting in a $4.1-billion net loss in the third quarter and prompting it to consider further actions to help it ride out the oil and gas industry's current downturn.

The Calgary-based company says most of the loss, which was equal to $4.19 per common share, is due to non-cash items that reflect Husky's reduced outlook for longer term oil and gas prices.

Adjusting to exclude $3.8 billion of impairments and a $167 million writedown, Husky's loss for the third quarter was $101 million.

Husky says it's prepared to make additional workforce adjustments if necessary, in addition to 1,400 positions eliminated by the end of the third quarter.

It has also decided to make its January 2016 dividend payment in common shares rather than cash. The dividend rate will continue to be 30 cents per share.

It's also considering the sale of some of its oil and gas properties in Western Canada — but not its heavy oil or oilsands assets.

"It is evident that the global oil dynamic has experienced a fundamental shift, driven by the resilience in supply," Husky CEO Asim Ghosh said in a statement. "We are fortifying the business for today and for the long term."

Husky is an integrated oil and gas producer with refinery and retail operations in North America as well as exploration and production in Asia.

A year ago, prior to the collapse of oil and gas prices that began in November, Husky had third quarter net income of $571 million or 52 cents per share on a diluted basis and adjusted earnings of $572 million.

In the second quarter of 2015, ended June 30, Husky had $120 million of net income, or 10 cents per share, and $124 million of adjusted earnings.

Ghosh said Husky took strategic decisions in 2010 that has withstood the test of the lower prices and will come out of the market downturn that's able to grow profitably at West Texas Intermediate crude averaging at US$40 a barrel and a benchmark gas priced at C$3 per thousand cubic feet over the next two years.

In Canada, it's active off Newfoundland's coast, has major production and processing operations in Western Canada and operates gasoline stations.