Husky Energy Delivers Production at the Liwan Gas Project in the South China Sea

Husky Energy Delivers Production at the Liwan Gas Project in the South China 
FOR: Husky Energy Inc. 
MARCH 30, 2014 
Husky Energy Delivers Production at the Liwan Gas Project in the South China
CALGARY, ALBERTA--(Marketwired - March 30, 2014) - Husky Energy (TSX:HSE) and
CNOOC Limited have commenced first production at the landmark Liwan Gas Project
in the South China Sea. 
"Liwan is Husky's largest project to date and places us inside the
door of one of the fastest growing energy markets in the world," said CEO
Asim Ghosh. "It was a massive undertaking and is a great achievement for
deepwater gas production in the Asia Pacific Region." 
Located approximately 300 kilometres southeast of the Hong Kong Special
Administrative Region, the project consists of three fields: Liwan 3-1, Liuhua
34-2 and Liuhua 29-1, which share a subsea production system, subsea pipeline
transportation and onshore gas processing infrastructure.  
The Liwan 3-1 field has started production, with initial natural gas sales
expected to be approximately 250 million cubic feet per day (mmcf/day) gross
and increasing to approximately 300 mmcf/day in the second half of 2014.
Initial sales of condensates and natural gas liquids from Liwan 3-1 are
expected to be approximately 10,000 to 14,000 barrels of oil equivalent per day
(boe/day) gross. 
The Liuhua 34-2 field will be tied into the Liwan infrastructure in the second
half of 2014, subject to final approvals. Production from the Liwan 3-1 field
is scheduled to go offline for approximately six to eight weeks to provide for
the tie-in of the field. 
Following the tie in of Liuhua 34-2, combined gas sales are anticipated to
increase to approximately 340 mmcf/day (gross). Natural gas from both fields
will be processed at the onshore gas terminal at Gaolan and sold to the
mainland China market, with initial gas production covered by fixed-price gas
sales agreements.  
Total gas sales are expected to rise towards a range of 400 to 500 mmcf/day
(gross) with the planned tie-in of the Liuhua 29-1 field in the 2016-2017
Production from Liwan will contribute to the Company's growth this year as
per overall guidance. The startup was achieved during one of the most extreme
weather seasons in recent history in the South China Sea. Husky expects to
achieve the lower end of its Asia Pacific production guidance of 35,000 to
45,000 boe/day. 
Husky holds a 49 percent interest in the Production Sharing Contract (PSC) for
the Liwan Gas Project and operates the deepwater infrastructure. Its partner
CNOOC Limited holds a 51 percent interest in the PSC and operates the shallow
water facilities and onshore gas terminal. The first stage of the US$6.5
billion project connecting the Liwan 3-1 field and work to date to tie in the
Liuhua 34-2 field have been completed on budget.  
The Company continues to advance a rich portfolio of opportunities in the Asia
Pacific Region, including shallow water gas developments offshore Indonesia and
exploration prospects offshore Taiwan. 
--  Husky's working interest in the Liwan Gas Project is 49 percent. 
--  Initial gas sales of approximately 250 mmcf/day (gross) from Liwan 3-1 
is expected to rise to about 300 mmcf/day in the second half of 2014. It 
is then expected to increase to about 340 mmcf/day (gross) following the 
Liuhua 34-2 tie-in and rise to a range of 400 to 500 mmcf/day (gross) 
once Liuhua 29-1 is online.   
--  Husky's share of sales gas from the Liwan project in 2014 is expected to 
be in the range of 20,000-25,000 boe/day, including cost recovery. 
Liquids production net to Husky is expected to be in the range of 5,000-    7,000 boe/day, including cost recovery. 
--  The Liwan 3-1 and Liuhua 34-2 gas sales price is US$11 to $13 per 
thousand cubic feet (mcf) in the initial five contract years, then 
floating referenced to the Guangdong City Gate price thereafter. Natural 
gas liquids will initially be sold to the mainland China market at 
competitive market pricing. 
--  Negotiations are underway for the Liuhua 29-1 gas sales contract. 
--  Husky expects to recover approximately $800 million in exploration costs 
in the first 18 months of production. 
--  Operating costs are expected to be approximately 10 percent of gross 
--  Royalties/taxes are expected to be approximately 20 percent of gross 
Additional background information and photos/video are available at  
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
Certain statements in this news release are forward-looking statements and
information (collectively "forward-looking statements"), within the
meaning of the applicable Canadian securities legislation, 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. The forward-looking
statements contained in this news release are forward-looking and not
historical facts.  
Some of the forward-looking statements may be identified by 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 result",
"are expected to", "will continue", "is
anticipated", "is targeting", "estimated",
"intend", "plan", "projection",
"could", "aim", "vision", "goals",
"objective", "target", "schedules" and
In particular, forward-looking statements in this news release include, but are
not limited to, references to: with respect to the Company's Asia Pacific
Region: expected initial volumes of sales of natural gas, condensates, and
natural gas liquids from the Company's Liwan Gas Project; expected levels
of increase of production volumes by the second half of 2014 and following the
tie-in of Liuhua 34-2 and Liuhua 29-1; scheduled timing of the tie-in of the
Liuhua 34-2 field to the Liwan 3-1 field, including the expected duration of an
associated offline period for the Liwan 3-1 field; anticipated contribution of
production from Liwan to the Company's growth in 2014; the Company's
Asia Pacific production guidance for 2014 and its expectation that it will
achieve production within such guidance range; the Company's expected
share of gas and liquid production from the Liwan Gas Project in 2014; expected
timing of recovery of exploration costs from the project; and expected
operating costs, royalties and taxes as a percentage of gross revenues from the
Although the Company believes that the expectations reflected by the
forward-looking statements presented in this news release 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, 2013
and other documents filed with securities regulatory authorities (accessible
through the SEDAR website and the EDGAR website
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 factors, and the Company's course of action would
depend upon its assessment of the future considering all information then
Investor Inquiries:
Dan Cuthbertson
Manager, Investor Relations
Husky Energy Inc.
Media Inquiries:
Mel Duvall
Manager, Media & Issues
Husky Energy Inc.
INDUSTRY:  Energy and Utilities - Oil and Gas  
-0- Mar/31/2014 02:07 GMT
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