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

Legalizing cannabis cost estimate for Red Deer just under $400k

Although the province of Alberta has announced $11.2 million for cannabis legalization,… Continue reading

WATCH: Every square tells a story: Edmonton expert is exploring Red Deer’s quilting history

Community members can bring in family heirloom quilts for documentation

Red Deer-area dads going through divorce are invited to Man Up

Support group formed to focus on positive activities, networking

WATCH: Two weeks away from Canadian Finals Rodeo in Red Deer

In just two weeks, Ponoka’s Shayna Weir will compete with the best… Continue reading

PHOTO: Say goodbye to City Hall Park flowers

A sure sign that winter is on its way is when City… Continue reading

PHOTO: Chew On This! campaign draws attention to national poverty

Lunch bags were being handed out in front of The Hub downtown… Continue reading

Wickenheiser, Pegula reflect NHL’s trend toward diversity

BUFFALO, N.Y. — With a laugh, Kim Pegula’s competitive nature kicked in… Continue reading

Harry and Meghan bring rain to drought-stricken Outback town

DUBBO, Australia — The Duke and Duchess of Sussex were jokingly thanked… Continue reading

TV Review: A Roseanne Barr-less ‘The Conners’ is a triumph

NEW YORK — Can there be a “Roseanne” without Roseanne? The answer… Continue reading

Canadian manufacturing sales fell 0.4 per cent in August: Statistics Canada

OTTAWA — Statistics Canada says manufacturing sales fell 0.4 per cent to… Continue reading

Brian Mulroney joins board of directors of New York-based pot company

NEW YORK — Former prime minister Brian Mulroney is joining the board… Continue reading

Canadians waking up to legalized cannabis: ‘My new dealer is the prime minister’

ST. JOHN’S, N.L. — Canadians across the country woke up to legalized… Continue reading

Most Read