Business

Husky Energy trims capital spending by $400M

Husky Energy is the latest company in the Canadian oilpatch to report it is trimming 2015 spending in the face of lower oil prices.

Lower oil prices has Calgary company looking for savings from contractors

Husky Energy CEO Asim Ghosh announced cuts in capital spending today, but says the company is looking beyond the downturn in energy prices. (Jeff McIntosh/Canadian Press)

Husky Energy is the latest company in the Canadian oilpatch to report it is trimming 2015 spending in the face of lower oil prices.

Huskey now says its reducing this year's capital budget by as much as $400 million to $3 billion to $3.1 billion. The previoius 2015 plan called for $3.4 billion in spending. 

The Calgary-based company says it's also seeking $400 million to $600 million of operational cost savings, mostly from its suppliers and contractors.

It did not say whether it would cut its workforce.

Husky expects production to begin this year or next on the Sunrise oilsands project in Alberta in Alberta, but has deferred a decision on expanding the White Rose offshore operation off Newfoundland's coast. Production for the year is anticipated to remain at about 325,000 to 355,000 barrels of oil equivalent per day 

It reported a $603-million loss in the fourth quarter, mostly because of asset writedowns and inventory reductions. Excluding writedowns, Husky's net earnings for the quarter was $147 million.

CEO Asim Ghosh said he is positioning the company for beyond the downturn in oil prices.

"By the end of 2016, about half of our total production will be from low sustaining capital projects," he said.

Crude oil has dropped to about $50 US a barrel in the first quarter of 2015 from a peak of $107 US a barrel last year. 

Companies across Canada and the U.S. have been announcing cuts to their capital spending and workforces, but the glut of oil that caused the price drop continues. hu

With files from the Canadian Press

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