Husky finds buyer for Prince George, B.C., oil refinery
All staff will be retained as part of $275M deal
Husky Energy Inc. has found a buyer for it's Prince George, B.C., oil refinery.
The company reached a deal to sell the 12,000 barrel-a-day refinery to Calgary-based Tidewater Midstream and Infrastructure for $215 million up front, followed by up to $60 million over the next two years.
Tidewater says it will retain all staff at the refinery as part of the deal.
The sale is part of Husky's move to get out of retailing fuels altogether, instead focusing on core upstream assets in Alberta, Saskatchewan, Atlantic Canada and the Asia Pacific region.
The Prince George refinery processes light oil into gasoline, diesel and other products for nearby regions of B.C.
In a release announcing the deal, Tidewater said it expects demand for fuel refined in Prince George to grow as large-scale forestry, mining and oil and gas projects are developed in the region.
Husky and Tidewater say they expect the deal to be finalized in the fourth quarter of 2019, assuming it passes regulatory approval.
Tidewater shares fall sharply after deal announced
Shares in Tidewater Midstream and Infrastructure Ltd. fell sharply following the news, dropping as low as $1.00 on the Toronto Stock Exchange, while Husky's shares rose slightly.
"We attribute the reaction to it being an unexpected acquisition for the company in a somewhat new business line," analyst Trevor Reynolds of Acumen Capital wrote in an email, adding there is also concern about its plan to fund the purchase entirely with debt.
Tidewater's core business is processing natural gas and upgrading, transporting and storing petroleum products produced in northern Alberta and B.C.
It has scheduled a conference call for Monday to discuss the deal.
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With files from The Canadian Press
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