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CORRECTED-UPDATE 1-Husky Energy expects spending to drop by a third in 2015
December 17, 2014 / 1:31 PM / 3 years ago

CORRECTED-UPDATE 1-Husky Energy expects spending to drop by a third in 2015

(Corrects currency to Canadian dollars from U.S. dollar throughout)

Dec 17 (Reuters) - Husky Energy Inc, Canada’s No. 3 integrated oil company, said it expects its capital spending to drop by a third in 2015 compared with 2014, becoming the latest Canadian producer to scale back spending as oil prices fall.

Husky, controlled by Hong Kong billionaire Li Ka-shing, said it would spend about C$3.4 billion ($2.9 billion) in 2015, with about three-quarters going into exploration, development and production.

The company also operates a refinery in Toledo, Ohio in a 50/50 joint venture with BP Plc.

Oil prices have nearly halved since June.

International benchmark Brent crude for February delivery was trading below $59 a barrel on Wednesday, near a 5-1/2 year low, as major oil producers signaled their intent to maintain production levels despite a supply glut.

Husky joins several other Canadian oil producers, including Cenovus Energy Inc, MEG Energy Corp, Athabasca Oil Corp and Tourmaline Oil Corp, in cutting investment plans for next year.

Husky said it would spend about C$5.1 billion on capital projects in 2014, up from the C$4.8 billion it had planned earlier, due to the inclusion of the final costs of its Sunrise Energy oil sands project in Alberta.

The Calgary-based company said in October it had raised cost estimates on the project by nearly 19 percent to C$3.2 billion.

Husky said it expected total production of between 325,000 and 355,000 barrels of oil equivalent per day (boepd) in 2015 as its newer projects ramp up in the latter half of the year.

Production for 2014 is estimated 341,000 boepd.

Up to Tuesday’s close of C$23.36, Husky’s shares had fallen 30 percent this year on the Toronto Stock Exchange. ($1 = 1.1634 Canadian dollars) (Reporting by Narottam Medhora in Bengaluru; Editing by Saumyadeb Chakrabarty and Ted Kerr)

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