Husky Deals Will Stem Production Declines, Ghosh Says
Husky Energy Inc., the Canadian oil company controlled by Hong Kong billionaire Li Ka-Shing, will use a pair of acquisitions to stem declines in output as it completes projects in Alberta’s oil sands and Southeast Asia.
“The task in 2010 was to stabilize the production decline,” Asim Ghosh, Husky’s chief executive officer, said in a telephone interview from Toronto. “In 2011, it’s to integrate the acquisitions so we show modest growth.”
Husky two days ago agreed to buy oil and natural-gas properties in western Canada from Exxon Mobil Corp. for C$860 million ($846.4 million). Ghosh said that acquisition and another made in September that added to Husky’s natural-gas output were made at prices that will boost profit even as prices are depressed by a glut of the fuel in the U.S.
“We don’t see gas prices going down from where they are,” Ghosh said. The company could see “supernormal profit when the price goes up,” he said.
Husky plans to sell C$1 billion in stock to finance its part of an oil-sands project it shares with BP Plc. The share issue was part of a C$3 billion stock and debt offering the company filed last week. Ghosh says the funds will go to developing projects, and the company isn’t anticipating more acquisitions.
“Our plan is not predicated on acquisitions, our plan is predicated on commercializing projects already in our portfolio,” he said. The company will continue to have 70 percent of its output in oil as the new projects are completed, Ghosh said.
Ghosh, who took over as chief executive in June, stopped a plan to spin off assets in Southeast Asia into a separate company. Instead Husky will develop the properties with China National Offshore Oil Corp. to boost production. The company expects compounded growth of 3 percent to 5 percent over the next five years, Ghosh said.
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