HUSKY NET LOSS C$4.1 BLN
While Husky Energy (TSX: HSE) continues to make progress implementing cost reductions and efficiencies across its operations, it is taking further action to fortify its business in an extended low oil price environment.
"It is evident that the global oil dynamic has experienced a fundamental shift, driven by the resilience in supply," said CEO Asim Ghosh. "Back in 2010, we made the decision to stay diversified, integrated and begin a transition into a low sustaining capital business. In a lower for longer world, our low sustaining capital projects in the Asia Pacific Region, oil sands, heavy oil thermals and Downstream margin business have become even more strategic.
"With our underlying strategy that has stood the test of five years and the decisive steps we are taking, Husky will come out of this cycle with an even stronger, more resilient business that will grow profitably at $40 US WTI oil and $3 Cdn AECO gas," added Ghosh. "We are fortifying the business for today and for the long term."
Fortifying the Business for the Long Term
Husky has taken a number of actions in response to the prolonged low oil price environment and continues to focus on maximizing the margin captured from every barrel produced.
To strengthen the business and the balance sheet for the long term, several parameters have been established. The business planning assumption for the next two years is $40 US per barrel WTI oil price and $3 Cdn per thousand cubic feet (mcf) AECO gas.
In addition, the Company intends to maintain a strong investment-grade credit rating, with no new net debt anticipated.
Based on these parameters, Husky expects to be able to support its sustaining, maintenance and growth capital requirements, further strengthen the balance sheet, be profitable and generate solid returns.
Several initiatives are being implemented in support of the business plan.
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IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.