TORONTO/CALGARY — Canadian oil and gas producer Husky Energy Inc is weighing paring down its stakes in some of its Eastern Canadian offshore assets, in a move that could fetch as much as several billion dollars, people familiar with the talks told Reuters.
The company, which is controlled by Hong Kong billionaire Li Ka-shing, finds the assets less attractive in a low oil price environment, making it challenging to generate profits, the people said. Husky could invest the sale proceeds in South America, Africa or Asia, the people added.
The sources cautioned that the talks are at an early stage and Husky may decide not to proceed with the divestitures if it does not get attractive offers.
When asked about the potential sale on the company’s earnings call, Chief Executive Rob Peabody said Husky’s Atlantic operations were an important part of its portfolio and declined to comment on what he said was speculation.
Husky’s offshore assets include White Rose, seen as its crown jewel in the region, as well Flemish Pass and Terra Nova. Husky could potentially sell down stakes in Terra Nova, where it has a 13 per cent working interest, and Flemish Pass, but is also considering paring down ownership in White Rose, the people added.
Offshore projects started to fall out of favour with some producers during the energy downturn as they often require a greater investment, making it harder for companies to make the financial dynamics work.
Husky began producing oil from the Atlantic region in 2005. Production averaged 34,300 barrels per day in the fourth quarter.
© Thomson Reuters 2017