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Husky Energy, Inc. (HUSKF.PK)

Q3 2012 Results Earnings Call

November 1, 2012 11:00 AM ET


Rob Mcinnis - Investor Relations

Asim Ghosh - Chief Executive Officer

Alister Cowen - Chief Financial Officer

Rob Peabody - Chief Operating Officer

Bob Baird - SVP, Downstream


George Toriolia - UBS

Greg Pardy - RBC Capital Market

Andrew Potter - CIBC

Mike Dunn - First Energy Capital

Jeff Jones - Reuters

Rebecca Pence - Bloomberg News



At this time, I'd like to turn the conference over to Rob Mcinnis, Manager of Investor Relations. Please go ahead.

Rob Mcinnis

Thank you. Good morning everyone, and thank you for joining us today to discuss our 2012 Third Quarter Results. I'm joined today by CEO, Asim Ghosh; Our CFO, Alister Cowan; Our COO, Rob Peabody; and Our Senior Vice President of Downstream, Bob Baird.

Today, we will provide an update on Husky's business strategy and an overview of results followed by a question-and-answer session. Please note that today's comments contain forward-looking information, actual results may differ materially from the expected results because of various risk factors and assumptions that are described in our quarterly release and in our annual filings, which are available on SEDAR, EDGAR and on our website.

I'll now turn the call over to Asim.

Asim Ghosh

Thanks, Rob, and good morning everybody. I'll get into third quarter highlight in a moment, but first I'd just like to take – start off reflecting on our overall performance to date. And I think in summary, our results show that we continue to build operational momentum. For the first nine months of this year and really since we laid out a strategic plan two years ago, we have delivered on our targets consistently.

And we have done this through consistent execution of our business strategy. Strong operational performance from all the segments of our business and within that more specifically, a greater emphasis on heavy oil thermal and resource plays in our foundation that have contributed to a more oily portfolio and also focus on project delivery on key milestones and growth pillars.

A final [follow-on] this is our focused integration strategy what are called our focus integration strategy in the past has helped us to capture more value by offsetting pricing volatility. Overall, we remain on course in executing our business plan and continue to make steady progress in setting the stage for major group projects.

Let me get into some of the operational highlights now for the third quarter. So let me begin with heavy oil. Heavy oil as you'll recollect is a part of our pedigree in Western Canada, and we've demonstrated our leadership in this resource area time and again over the years.

As I've mentioned to you before, we are transitioning this part of our foundation to more thermal production and horizontal drilling to extract greater value, no pun intended there but [joy].

The Pikes Peak South and Paradise Hill thermal projects are both reached their design production rates within two months of first oil and based on their cost efficiency and performance they will be models for our future heavy oil thermal project developments an my colleague Rob Peabody will speak to more of the specifics of these two projects a bit later this morning.

We expect to accelerate more of these long-life projects in the future using this modular approach for cost efficiency. Currently, for example, construction of the Sandall thermal project is progressing, the first production scheduled for 2014.

And in summary again, heavy oil, as you know is one of the building blocks of our foundation and thermal projects are breathing new life into the future of this foundation.

I'll now turn to Western Canada. We continue to develop and evaluate our oil resource play portfolio getting good results at Bakken, Cardium, Viking developments and we are advancing the evaluation early stages yet to the others at Rainbow and on our North West territories plays and in the Investor Day coming up in the beginning of December we will give you an update on these and our liquids-rich gas play portfolio.

I'll now turn to the Atlantic region. We already sent a press release out on this that SeaRose is back on line well ahead of schedule after the execution of a safe and successful turnaround. The maintenance program in Belfast went off without a hitch and it really just didn't happen. It reflected very strong planning and execution. We reconnected and became operational more than three weeks ahead of schedule. Production was ramped back at the steady-state levels by the end of the quarter. Also ahead of schedule but of course we didn't see the benefit of that throughout the quarter so keep that in mind as you look at our overall production levels and oil gas mix.

And we're continuing to moving forward on evaluating potential development concepts the satellite extension program in the White Rose region. And finally Rob will bring you up-to-date on our plans for exploration program in the Atlantic. In the Asia specific region, oil and gas project has made great progress over the past quarter. Overall, the project is by about three quarters complete, as we draw closer to first gas in the 2013 - 2014 times frame, which is the timeframe we had indicated to you earlier.

The shallow water jacket has been launched and installed on the ocean flow in the South China sea and that is the foundation for the central platform from which we'll work with CNOOC our partner to develop the Liwan 3. Construction of the top size component remains on track. We expect it to be floated over to the jacket in the second quarter of next year and more than half of the two, it's about almost 80 kilometer long deep water pipelines had been laid already from the gas field to the central platform area.

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