Just days after announcing an undisclosed amount of layoffs, Calgary-based Husky Energy released it third-quarter financial results indicating the company saw its net earnings fall to $273 million compared to net earnings of $545 million in quarter three of 2018.
In a news release on Thursday, Husky said funds from operations were $1 billion compared to $1.3 billion in the third quarter of 2018. Cash flow from operating activities, including changes in non-cash working capital, was $800 million compared to $1.3 billion in the third quarter of 2018. The reductions in funds from operations and net earnings include impacts from lower crude oil prices and lower U.S. refining margins, said the company.
“We achieved all of the milestones for the third quarter as set out at Investor Day in May, and remain on track for the rest of the year,” said CEO Rob Peabody in a statement. “We also saw our work to enhance process safety translate to improved reliability across the business.
“In the integrated corridor, we started up our latest 10,000 barrel-per-day Saskatchewan thermal bitumen project at Dee Valley, which has already reached its nameplate capacity. We began the final tie-in of the Lima Refinery crude oil flexibility project, received permits to commence the Superior Refinery rebuild, and reached an agreement to sell the Prince George Refinery.”
Husky said that in line with the reduced capital program set out at Investor Day in May 2019, earlier this week it “took steps to further align its organization and workforce.”
In the third quarter capital spending of $868 million was directed towards advancing the Saskatchewan thermal portfolio, the Lima crude oil flexibility project, and progressing construction of the Liuhua 29-1 field offshore China and the West White Rose Project in the Atlantic region. Capital expenditure guidance for 2019 remains unchanged at $3.3-$3.5 billion, it said.
Husky added that overall upstream production averaged 294,800 barrels of oil equivalent per day (boe/day), which takes into account the return to full production at the White Rose field in the Atlantic region, mandated production quotas in Alberta and maintenance at the Liwan Gas Project and the BD Project in the Asia Pacific region; production was approximately 310,000 boe/day at the end of the third quarter
Also in the third quarter it said downstream throughput of 356,400 barrels per day (bbls/day) compared to 350,600 bbls/day in the third quarter of 2018. Construction started on the Superior Refinery rebuild project with full operations expected to resume in 2021.
And the company reached an agreement to sell the Prince George Refinery for $215 million in cash plus a closing adjustment for working capital, and a contingent payment of up to $60 million over two years with the sale expected to close in the fourth quarter of 2019 subject to closing conditions.