Oil and gas company Husky says it plans to spin off southeast Asia assets

CALGARY — Husky Energy Inc. (TSX:HSE) plans to spin off its southeast Asian oil and gas assets off into a new company, CEO John Lau said Tuesday after the firm’s annual general meeting.

CALGARY — Husky Energy Inc. (TSX:HSE) plans to spin off its southeast Asian oil and gas assets off into a new company, CEO John Lau said Tuesday after the firm’s annual general meeting.

The new company would have a completely separate board of directors and management team from the Calgary-based energy company, which currently has seven exploration blocks covering nearly 33,000 square kilometres off the Chinese coast.

A decision on where the new company’s headquarters will be located has not been made yet.

“It depends on where we are going to list, because we are always thinking about the company’s base,” Lau said, adding the firm is contemplating a dual listing in Toronto and Hong Kong.

Husky’s Southeast Asia spinoff will continue to work closely with its partner in the region, China National Offshore Oil Co.

Husky has signed 11 production sharing with CNOOC contracts since 2001, which allow the Chinese firm to exercise up to a 51 per cent working interest.

Husky operates the nearly 3,000-square kilometre Liwan deep water field in the South China Sea about 300 kilometres southeast of Hong Kong, which is estimated to contain four to six trillion cubic feet of natural gas.

It also has a 40 per cent interest in the in the Wenchang field southwest of Hong Kong, a full stake in an the East China Sea offshore block near Shanghai, as well as operations in Indonesia’s Madura strait.

Most of Husky’s resources in Southeast Asia have not been booked yet, so the spinoff will have no impact on the Canadian company’s reserves.

The timing of the split will depend on when economic stability returns, said Husky spokesman Graham White.

“We want to be well positioned so that we can execute on it when markets improve, even if that’s in the short term,” he said

“At the same time if markets don’t recover for an extended period of time, we’re also prepared to be disciplined and patient.”

Tristone Capital analyst Chris Feltin said Husky has had a lot of success with exploration in its Liwan property.

“This may be a way for them to fully recognize that value in a standalone entity versus keeping it within a larger integrated oil and gas platform,” he said.

“To split that off from the larger Husky would probably be relatively easy.”

A year ago, EnCana Corp. (TSX:ECA) announced plans to split into separate oilsands and natural gas-focused companies in order to better reflect the value in both sides of the business.

The split has been put on hold for the time being, but the company has said the underlying reasons for the transaction remain valid.

In addition to the Southeast Asian assets, Husky also has leases in the oilsands, offshore oil and gas platforms off Canada’s East Coast, refineries in the United States and Canada and a chain of retail gas stations across Western Canada.

Husky brought in $24.7 billion in sales and operating revenues last year and net earnings of $3.75 billion.

Husky shares rose about 1.75 per cent, or 50 cents, to $29.10 on the Toronto Stock Exchange Tuesday.

Just Posted

Men posing as repo men attempt to steal vehicle in Red Deer County

Two men attempted to steal a utility vehicle from a Red Deer… Continue reading

Red Deerian spreads kindness with one card at a time

One Red Deerian wants to combat bullying by spreading kindness in the… Continue reading

Bowden baby in need of surgery

“Help for Alexis” Go Fund Me account

PHOTO: First Rider bus safety in Red Deer

Central Alberta students learned bus safety in the Notre Dame High School… Continue reading

WATCH: Annual Family Picnic at Central Spray and Play

Blue Grass Sod Farms Ltd. held the Annual Family Picnic at the… Continue reading

Woman has finger ripped off at West Edmonton Mall waterslide

SASKATOON — A Saskatchewan woman says she lost a finger after her… Continue reading

Uncertainty looms over Canada’s cannabis tourism, but ambitions are high

TORONTO — Longtime marijuana advocate Neev Tapiero is ready for the cannabis-driven… Continue reading

Feds mulling safeguards to prevent ‘surge’ of cheap steel imports into Canada

OTTAWA — The federal government extended an olive branch of sorts to… Continue reading

Ontario govt caps off summer session by passing bill to cut Toronto council size

TORONTO — The Ontario government passed a controversial bill to slash the… Continue reading

Updated:Italian bridge collapse sends cars plunging, killing 26

MILAN — A 51-year-old highway bridge in the Italian port city of… Continue reading

Saudi Arabia spat affecting Canadians embarking on hajj, community members say

TORONTO — Members of Canada’s Muslim community say recent tensions between Ottawa… Continue reading

Tug carrying up to 22,000 litres of fuel capsizes in Fraser River off Vancouver

VANCOUVER — The smell of diesel filled the air as crews worked… Continue reading

Nebraska executes first inmate using fentanyl

LINCOLN, Neb. — Nebraska carried out its first execution in more than… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month