Husky Energy Inc. is cutting its capital spending. (File photo by THE CANADIAN PRESS)

Husky Energy Inc. is cutting its capital spending. (File photo by THE CANADIAN PRESS)

Husky Energy cutting capital spending plan for 2020 and 2021 by $500 million

CALGARY — Husky Energy Inc. is cutting its capital spending plan for 2020 and 2021 by $500 million compared with its earlier guidance due to what it called changing market conditions.

The company is reducing its capital spending for 2020 by $100 million to between $3.2 billion and $3.4 billion. The spending plan for 2021 is being reduced by $400 million.

Husky says average upstream production is expected to be in the range of 295,000 to 310,000 barrels of oil equivalent per day for 2020.

The company says its capital spending for 2020 will focus on its Lloyd thermal project portfolio, its Liuhua 29-1 offshore project in China, and construction of the West White Rose Project in the Atlantic region.

The guidance does not include $450 million to $525 million related to the ongoing rebuild of the Superior Refinery, which is expected to be covered by insurance.

Husky based its plan on an oil price assumption of US$55 per barrel of West Texas Intermediate for 2020 and US$60 in 2021.

“The reduction in our capital spending, combined with the start-up of growth projects including the Liuhua 29-1 natural gas field offshore China, two new thermal projects, and the Lima Refinery crude oil flexibility project, has set the stage for significant free cash flow growth beginning in 2021,” Husky chief executive Rob Peabody said in a statement.

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