Husky Energy raises capital spending

Husky Energy Inc. has raised its 2010 capital budget by 29 per cent as it aggressively seeks ways to add near-term production growth.

CALGARY — Husky Energy Inc. has raised its 2010 capital budget by 29 per cent as it aggressively seeks ways to add near-term production growth.

The Calgary-based integrated oil and gas producer had earlier planned to spend $3.1 billion this year, but bumped that to $4 billion. It spent $986 million on capital projects during Q3.

Husky will be selective in picking acquisitions that fit with infrastructure it already has, CEO Asim Ghosh told analysts Thursday after the company reported weaker quarterly profits, but a revenue jump.

“We are not, as we execute our acquisition plan, interested in trading dollars for barrels. In other words, I’m not interested in just getting production for the sake of headline production,” he said.

“We are interested in financially accretive production, acquisitions that offer an attractive rate of return.”

In September, Husky bought natural gas properties in west-central Alberta from Talisman Energy Inc. (TSX:TLM) for an undisclosed price.

Husky reported profits of $257 million or 30 cents a share in the third quarter, down from $266 million or 31 cents last year. Revenues increased to $4.4 billion in the quarter from $3.9 billion last year.

Adjusted earnings per share were 31 cents in the latest period.

Analysts polled by Thomson Reuters were on average expecting earnings of 33 cents per share.

Husky shares rose nearly two per cent to $26.04 on the Toronto Stock Exchange.

Husky, majority owned by Hong Kong billionaire Li Ka-Shing, is active in Western Canada, off Canada’s East Coast and in Southeast Asia.

It has said it plans to spin off its Asian assets into a new company, but Ghosh said Thursday his company’s board of directors is still weighing that option.

“That is an important decision, a strategic decision for the company. And the work of the board is still underway,” he said.

“When the rigorous review is done, we’ll be in a position to share the results with you.”

In the oilsands, Husky has a joint venture with BP PLC (NYSE:BP), in which the two companies will evenly split production from Husky’s Sunrise properties and BP’s U.S. refineries.

Husky expects to give the go ahead to Sunrise this year.

Husky, which employed nearly 4,300 people at the end of last year, also has a string of fuel retail outlets.

Ghosh, who has a track record of growing small startups into hefty enterprises, took the helm of Husky on June 1. His predecessor, John Lau, ended his 17-year run as top boss in order to move to Hong Kong and head up Husky’s growing Asian business.