Husky Energy Announces New Initiatives and 2013 Production

Husky Energy Announces New Initiatives and 2013 Production
Guidance/Capital Expenditure Program 
CALGARY, ALBERTA -- (Marketwire) -- 12/03/12 -- Husky Energy
(TSX:HSE) is on track to deliver another year of strong business and
operational results and is announcing several new initiatives to
build on its momentum.  
"We have consistently executed against our strategy for nine
consecutive quarters," said Husky CEO Asim Ghosh. "This performance
is a result of strong delivery and reliability in all business
segments and our focused integration strategy. Our major growth
projects in Asia Pacific, the Oil Sands and the Atlantic Region are
progressing and continue to meet their milestones. 
"The rejuvenation of our foundation in Heavy Oil and Western Canada
is also well underway with increased production from heavy oil
thermal projects and an emerging focus on oil resource plays." 
New initiatives announced today include: 
Corporate 


 
1   Production in 2013 is expected to be in the range of 310,000 to 330,000 
    barrels of oil equivalent per day (boe/day), compared to estimated      
    average annual production of 301,000 boe/day for 2012.                  
        The Company is on track to meet its five-year compound annual       
        production growth goal of 3-5 percent as set in 2010. A new target  
        has been set for the plan period 2012-2017 at an increased compound 
        annual growth rate of 5-8 percent.                                  
2   The $4.8 billion capital expenditure program for 2013 is comparable with
    the $4.7 billion program in 2012. Approximately 50 percent of Upstream  
    spending will be directed towards the Company's growth pillars.         

 
Foundation 


 
3   The Rush Lake heavy oil thermal project has been sanctioned and the     
    production capacity has been increased to 10,000 barrels per day        
    (bbls/day) compared to the originally planned 8,000 bbls/day. First oil 
    is expected in 2015.                                                    
4   Production from heavy oil thermal is expected to achieve 55,000 bbls/day
    by 2017 with an additional four thermal projects planned to come on     
    stream, including the 3,500 bbls/day Sandall project, now under         
    construction.   
                                                        
5   Two new heavy oil thermal projects, the 8,000 bbls/day Pikes Peak South 
    and 3,000 bbls/day Paradise Hill, came online ahead of schedule in 2012 
    and are currently achieving production levels approximately 40 percent  
    higher than their design rates.                                         

 
Growth Pillars 


 
6   The Liwan Gas Project in the South China Sea is approximately 75 percent
    complete and remains on target for first production in late 2013/early  
    2014.                                                                   
7   Offshore Indonesia, the Company has made four new gas discoveries on the
    Madura Strait Block. The discoveries are being evaluated for potential  
    tie-in to existing nearby infrastructure.                               
8   Substantial cost certainty related to the first phase of the Sunrise    
    Energy Project was achieved in the fourth quarter with the conversion of
    the lump sum contract for the Central Processing Facility. Over 85      
    percent of the $2.7 billion cost estimate for Phase 1 is now fixed and  
    incorporates all significant contract conversions and facility and      
    efficiency design improvements.                                         
9   Work continued in anticipation of sanction of the South White Rose      
    Extension Project in the Atlantic Region, with the excavation of a      
    subsea drill centre. First oil is expected in 2014.                     
10  A five-year contract was awarded for the new-build harsh environment    
    semi-submersible drilling rig, West Mira, to support the Company's      
    exploration and development opportunities in the Atlantic Region.       

 
2012 Operational Highlights 
The Company focused on executing its business plan in 2012 and the
stage is set for the delivery of its major growth projects.
Highlights include the following:  
Heavy Oil 


 
--  The Pikes Peak South thermal project achieved first oil in the second
    quarter and reached its 8,000 bbls/day design rate within two months.
    The project is now realizing production of approximately 11,000
    bbls/day. 
--  The Paradise Hill thermal project achieved first oil in the second
    quarter and is achieving production beyond its 3,000 bbls/day design
    capacity at approximately 4,600 bbls/day. 
--  A single well-pair pilot at Rush Lake is contributing approximately
    1,000 bbls/day of production and has provided the basis for expanding
    the full commercial project to 10,000 bbls/day. 
--  Site grading was completed at the 3,500 bbls/day Sandall thermal
    development and the project remains on track for commissioning in 2014. 
--  Horizontal well production reached 8,000 bbls/day. Thirty-one well pads
    were added in 2012 and 125 wells were drilled. 
--  A CO2 capture and liquefaction project was completed at the Company's
    ethanol plant in Lloydminster. CO2 from the plant is captured and used
    to enhance oil recovery in nearby reservoirs. The innovation provides a
    double benefit by allowing more oil to be recovered while reducing CO2
    emissions.

 
Western Canada 


 
--  The Company is moving forward with the transformation of its foundation
    in Western Canada to resource plays. Development activities are focused
    on six oil resource plays, including the Bakken, Viking, Cardium, Lower
    Shaunavon, Rainbow Muskwa and the Slater River Canol in the Northwest
    Territories. 
--  At Slater River, applications have been filed to construct an all-season
    access road to support further development. Evaluations will continue
    this winter on two vertical wells drilled during the previous season. 
--  Development of the liquids-rich gas Ansell play continued with 17 wells
    expected to be completed by the end of the year. Initial production
    tests were conducted on the Kaybob Duvernay play, delivering strong
    liquids yields.

 
Oil Sands 


 
--  The first phase of the Sunrise Energy Project achieved its major
    construction milestones according to plan and remains on schedule for
    first oil in 2014. 
--  The Sunrise project continues to achieve its major milestones. All
    significant contracts for Phase 1, including the Central Processing
    Facility, have now been converted to lump sum payment. Over 85 percent
    of the project's costs are now fixed and the project is more than 50
    percent complete. 
--  Planning, design and engineering for the next phase of Sunrise
    continues. Regulatory approvals are in place for up to 200,000 bbls/day
    of production. (50 percent W.I.)

 
Asia Pacific 


 
--  The Liwan Gas Project in the South China Sea remains on schedule for
    first gas in late 2013/early 2014. The overall project is now
    approximately 75 percent complete. 
--  The central platform jacket was installed on the seabed in preparation
    for the installation of the topsides portion of the platform in the
    second quarter of 2013. 
--  Offshore Indonesia, the MDA and MBH dual-field development is on track
    for first production in 2014/2015, while first gas from the BD field in
    the Madura Strait Block is anti
cipated in 2015/2016. 
--  In addition, four new gas discoveries were made in the Madura Strait
    Block offshore Indonesia. The discoveries are being evaluated for
    potential tie-in to existing nearby infrastructure.

 
Atlantic Region 


 
--  The SeaRose FPSO offstation program was completed safely, ahead of
    schedule and under budget in the third quarter. An infill well was
    brought online with results as expected. 
--  A new subsea drill centre was excavated in preparation for development
    of the South White Rose extension. Subject to final approvals, first oil
    is anticipated from this project in 2014. 
--  Pre-sanction work continued on the West White Rose development. 
--  To support future drilling and exploration activities, a five-year
    contract was awarded for a new harsh environment semi-submersible rig.
    The West Mira is scheduled for delivery in 2015.

 
Downstream 


 
--  Strong refinery and upgrader throughputs contributed substantially to
    2012 results. The Company's focused integration strategy captured
    additional revenue and reduced risks associated with volatile commodity
    pricing. 
--  A planned turnaround was completed at the Lloydminster Upgrader in the
    second quarter and subsequently the Upgrader achieved record monthly
    production. 
--  A new continuous catalytic reformer is expected to be completed by year-
    end at the Toledo Refinery. The unit replaces three older units and is
    expected to improve operating efficiency, overall operating reliability
    and reduce emissions. 
--  Construction of a 20,000 bbls/day kerosene hydrotreater at the Lima
    Refinery is nearing completion, which will increase jet fuel production
    capabilities and enhance product flexibility. 
--  Storage capacity was expanded at Hardisty with the completion of a
    300,000-barrel storage tank that will further improve the Company's
    ability to take advantage of pricing opportunities. Additional
    throughput capacity has been secured at Patoka, Illinois to increase
    crude grade flexibility and maximize arbitrage capabilities.

 
Production Guidance 
In 2010, the Company set a compound annual production growth target
of 3-5 percent through the plan period 2010-2015 and is on track to
achieve that goal. A new target has now been set for the plan period
2012 to 2017 at an increased compound annual production growth rate
of 5-8 percent.  
Average annual production for 2012 is forecast to be 301,000 boe/day,
which is within the guidance of 290,000 to 315,000 boe/day and
reflects the SeaRose and Terra Nova offstation programs.  
Production in 2013 is expected to be in the range of 310,000 to
330,000 boe/day. The 2013 forecast includes a planned decrease in
natural gas production and an increase in light, medium and heavy oil
production, reflecting the shift in capital to higher netback
opportunities. 


 
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                                                Production Guidance         
                                              2012               2013       
                                                                            
Light / Medium Oil and NGLs (mbbl/day)      95 - 105          110 - 115     
Heavy Oil and Bitumen (mbbl/day)           100 - 110          110 - 120     
                                                                            
Subtotal - Crude Oil and NGL               195 - 215          220 - 240     
                                                                            
Natural Gas (mmcf/day)                     560 - 610          540 - 580     
                                                                            
Total Production (mboe/day)                290 - 315          310 - 330     
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2013 Capital Expenditure Program 
The 2013 capital expenditure program is designed to build on the
momentum achieved over the past two years.  


 
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Capital Expenditure Guidance(1)      Guidance       Forecast       Guidance 
                                         2012           2012           2013 
                                   ($billions)    ($billions)    ($billions)
Upstream                                                                    
  Western Canada Sedimentary                                                
   Basin                                                                    
    (Husky CapEx)                         1.0            1.3            1.2 
    (Husky cash outlay)(2)                0.9            1.3            1.1 
  Heavy Oil                               0.8            0.9            0.9 
  Sunrise (CapEx)                         0.6            0.6            0.5 
    (Cash outlay)(3)                        0              0              0 
  Atlantic Region                         0.5            0.5 
           0.6 
  Asia Pacific                            1.1            0.8            0.8 
Upstream Total (CapEx)                    4.0            4.1            4.0 
                                                                            
Upstream Total (Cash Outlay)              3.3            3.5            3.4 
Downstream (CapEx)                        0.6            0.5            0.7 
    (Cash outlay)(4)                      0.7            0.7            0.8 
Corporate                                 0.1            0.1            0.1 
Total (Husky CapEx)                       4.7            4.7            4.8 
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Total (Cash Outlay)                       4.1            4.3            4.3 
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Notes:                                                                      
                                                                            
(1) All amounts exclude capitalized interest and administration.            
(2) Under joint venture agreements, specified costs on certain developments 
    are shared or assumed b
y partner.                                       
(3) Sunrise capital expenditures paid by Husky partner as per terms of joint
    venture agreement.                                                      
(4) Downstream includes capital expenditures paid by Husky as per joint     
    venture agreement.                                                      

 
Investor Day 
CEO Asim Ghosh and members of the management team will provide
further details on the Company's strategic initiatives and growth
plans at the annual Investor Day, scheduled for 9 a.m. EST December 4
in Toronto, Ontario, Canada. The presentation will be webcast and
posted on www.huskyenergy.com under Investor Relations. 
Husky Energy is one of Canada's largest integrated energy companies.
It is headquartered in Calgary, Alberta, Canada and is publicly
traded on the Toronto Stock Exchange under the symbol HSE and
HSE.PR.A. More information is available at www.huskyenergy.com 
FORWARD-LOOKING STATEMENT 
Certain statements in this document are forward-looking statements
within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended, and Section 27A of the United
States Securities Act of 1933, as amended, and forward-looking
information within the meaning of applicable Canadian securities
legislation (collectively "forward-looking statements"). The Company
hereby provides cautionary statements identifying important factors
that could cause actual results to differ materially from those
projected in these forward-looking statements. Any statements that
express, or involve discussions as to, expectations, beliefs, plans,
objectives, assumptions or future events or performance (often, but
not always, through the use of words or phrases such as "will
likely," "are expected to," "will continue," "is anticipated," "is
targeting," "estimated," "intend," "plan," "projection," "could,"
"aim," "vision," "goals," "objective," "target," "schedules" and
"outlook") are not historical facts, are forward-looking and may
involve estimates and assumptions and are subject to risks,
uncertainties and other factors some of which are beyond the
Company's control and difficult to predict. Accordingly, these
factors could cause actual results or outcomes to differ materially
from those expressed in the forward-looking statements.  
In particular, forward-looking statements in this document include,
but are not limited to, references to:  


 
--  with respect to the business, operations and results of the Company
    generally: the Company's 2013 production guidance, including anticipated
    production by product type; the Company's 2013 capital expenditure
    program, including anticipated spending by business segment; the
    Company's anticipated business and operational results for 2012; the
    Company's forecast capital expenditures for 2012; the Company's
    estimated average annual production for 2012; the Company's anticipated
    compound annual production growth for the plan period 2010-2015; and the
    Company's target compound annual production growth for the plan period
    2012 to 2017; 
 
--  with respect to the Company's Asia Pacific Region: planned timing of
    first production at the Company's Liwan Gas Project; anticipated timing
    of installation of the topsides portion of the platform at the Company's
    Liwan Gas Project; and anticipated timing of first production at the
    Company's MDA and MBH fields and the BD field at the Madura Strait
    Block;
 
--  with respect to the Company's Atlantic Region: anticipated timing of
    first oil at the Company's South White Rose extension project; and
    anticipated timing of delivery of the West Mira semi-submersible rig; 
 
--  with respect to the Company's Oil Sands properties: estimated Phase 1
    costs of the Company's Sunrise oil sands project; and anticipated timing
    of first production from Phase 1 of the Company's Sunrise Energy
    Project; 
 
--  with respect to the Company's Heavy Oil properties: expected timing of
    commissioning at the Company's Sandall thermal project; anticipated
    timing of production at the Company's Rush Lake thermal project;
    anticipated volume of production from heavy oil thermal projects by
    2017; and plans to add additional heavy oil thermal projects; 
 
--  with respect to the Company's Western Canadian oil and gas resource
    plays: drilling plans in Western Canada for the remainder of 2012; the
    planned development activity in Western Canada; and planned evaluation
    of vertical wells at Slater River; and
 
--  with respect to the Company's Downstream business segment; expected
    timing and effects of completion of a continuous catalytic reformer at
    the Company's Toledo refinery; expected timing and effects of completion
    of the kerosene hydrotreater at the Company's Lima Refinery in Ohio;
    anticipated effects of expansion of storage capacity at Hardisty.

 
In addition, statements relating to "reserves" and "resources" are
deemed to be forward-looking statements as they involve the implied
assessment based on certain estimates and assumptions that the
reserves or resources described can be profitably produced in the
future.  
Although the Company believes that the expectations reflected by the
forward-looking statements presented in this document are reasonable,
the Company's forward-looking statements have been based on
assumptions and factors concerning future events that may prove to be
inaccurate. Those assumptions and factors are based on information
currently available to the Company about itself and the businesses in
which it operates. Information used in developing forward-looking
statements has been acquired from various sources including third
party consultants, suppliers, regulators and other sources.  
Because actual results or outcomes could differ materially from those
expressed in any forward-looking statements, investors should not
place undue reliance on any such forward-looking statements. By their
nature, forward-looking statements involve numerous assumptions,
inherent risks and uncertainties, both general and specific, which
contribute to the possibility that the predicted outcomes will not
occur. Some of these risks, uncertainties and other factors are
similar to those faced by other oil and gas companies and some are
unique to Husky.  
The Company's Annual Information Form for the year ended December 31,
2011 and other documents filed with securities regulatory authorities
(accessible through the SEDAR website www.sedar.com and the EDGAR
website www.sec.gov) describe the risks, material assumptions and
other factors that could influence actual results and are
incorporated herein by reference. 
Any forward-looking statement speaks only as of the date on which
such statement is made, and, except as required by applicable
securities laws, the Company undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence
of unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all of such factors and to
assess in advance the impact of each such factor on the Company's
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement. The impact of any one
factor on a particular forward-looking statement is not determinable
with certainty as such factors are dependent upon other fact
ors, and
the Company's course of action would depend upon its assessment of
the future considering all information then available. 
Disclosure of Oil and Gas Information 
Unless otherwise noted, historical production numbers given represent
Husky's share.  
The Company uses the terms barrels of oil equivalent ("boe"), which
is calculated on an energy equivalence basis whereby one barrel of
crude oil is equivalent to six thousand cubic feet of natural gas.
Readers are cautioned that the term boe may be misleading,
particularly if used in isolation. This measure is primarily
applicable at the burner tip and does not represent value equivalence
at the wellhead. 
Note to U.S. Readers 
All currency is expressed in Canadian dollars unless otherwise
directed.
Contacts:
Husky Energy Inc. - Investor Inquiries:
Rob McInnis
Manager, Investor Relations
403-298-6817 
Husky Energy Inc. - Media Inquiries:
Mel Duvall
Manager, Media & Issues
403-513-7602
 
 
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