Six places Husky will spend its bigger budget in 2017

Six places Husky will spend its bigger budget in 2017

By Deborah Jaremko

Dec. 13, 2016, 7:02 a.m.

Relevant Husky Press Releases is at:


Husky Energy is raising its capital expenditure forecast for next year, targeting higher-margin projects, the company said today.

Project investments continue to deliver a minimum 10 percent after tax interval rate of return at a WTI price in the low US$40s per barrel, Husky said.

The company will spend up to $2.7 billion next year on growth, fully funded within cash flow from operations. This is up from abut $2 billion this year.

Here’s where Husky will spend the cash.

  1. Lloydminster thermal heavy oil: Husky says it will Increase volumes from the Edam East, Vawn and Edam West Lloyd thermal projects.
    It has also sanctioned three new Lloyd thermal projects with total design capacity of about 30,000 bbls/d at Dee Valley, Spruce Lake North and Spruce Lake Central. Subject to regulatory approval, first production for all three is expected in 2020.
    Additionally, development continues on a 10,000 bbls/day Rush Lake 2 Lloyd thermal project, with first oil scheduled for the first half of 2019.
  2. Oilsands thermal oil: Husky will invest in increasing production at the Tucker SAGD project in the Cold Lake region, where it has recently had success growing volumes to about 20,000 bbls/d. Tucker production is expected to continue to increase in 2017 towards a sustained production level of about 30,000 bbls/day in 2018.
    At Husky’s new Sunrise SAGD project near Fort McMurray, ramp-up to capacity of 60,000 bbls/d has been impacted by water/oil ratios and the disruption of the wildfires earlier this year. Current production is about 35,000 bbls/day.
    Husky says that utilizing existing plant capacity, 14 previously drilled well pairs will be tied in for approximately $50 million net in late 2017. Production will continue to ramp up throughout 2017 with average annual production expected to be in the range of 40,000 to 44,000 bbls/day.
  3. Offshore Indonesia: Husky says the liquids-rich BD field offshore Indonesia is scheduled to ramp up to its full gas sales rate by the second half of 2017, with a fixed-price contract and a net production target of 40 million cubic feet per day (mmcf/day) of gas and 2,400 bbls/d of liquids.
    Four additional gas fields are also being progressed in the Madura Strait. The MDA-MBH and MDK fields will be developed in tandem and are scheduled to come on production in the 2018-2019 timeframe, and a plan of development has been approved for the MAC field, Husky says.
  4. Canada’s East Coast: Two new infill wells are planned in the Atlantic Region, with expected combined net peak production of about 15,000 bbls/d.
    At West White Rose, Husky says engineering design and subsurface evaluation work continues to increase capital efficiency and improve resource capture; the project will be considered for sanction next year.
  5. Western Canada: Husky says it is increasing investment in Western Canada resource plays, with 16 wells slated to be drilled next year.
    This will contribute to an anticipated increase in resource play production to about 36,000 boe/day by the end of the year.
  6. Downstream: At the Lima Refinery, Husky’s crude oil flexibility project has increased heavy crude feedstock processing capacity to around 10,000 bbls/day, with the full scope of the project expected to increase capacity to 40,000 bbls/day in 2018.
    Engineering is also progressing to provide for the expansion of Lloydminster asphalt capacity to 60,000 bbls/day by 2021 to accommodate growing Lloyd thermal volumes; the project will be considered for sanction next year.




About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on December 13, 2016, in economic impact, oil. Bookmark the permalink. Leave a comment.

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