CALGARY, ALBERTA–(Marketwired – May 2, 2016) – Husky Energy (TSX:HSE) has reached an agreement on the sale of royalty interests representing approximately 1,700 barrels of oil equivalent per day of expected Western Canada production in 2016 to Freehold Royalties Ltd.
This transaction allows the Company to obtain a greater value on the royalty income stream from these lands as compared to the value potentially received as part of the sale of the underlying assets.
The sale proceeds include $163 million in cash and other considerations, including the transfer to Husky of royalty and working interests in select heavy oil properties in the Lloydminster area. These interests will contribute to the growing Lloyd thermal portfolio.
Growing Higher Quality Production
Over the past six years, Husky has been transitioning its Western Canada business from a legacy basin to one with fewer, more material resource plays. The Company is focusing on core plays, including the Wilrich and Montney.
This transition is part of the Company’s overall strategy to grow higher quality production: maintaining a diversified portfolio, the development of two distinct integrated value chains (the Lloyd and Sunrise Value Chains) and transitioning into a low sustaining capital business.
This is the Company’s second asset sale announcement this year. A $1.7 billion agreement for the partial disposition of an interest in Husky’s midstream assets in the Lloydminster area was reached in April. Husky maintains operatorship of the assets and has a 35 percent equity interest in a newly formed limited partnership.
Proceeds from these transactions will be used to strengthen the balance sheet.
Work continues to advance in regard to the disposition of select oil and natural gas properties in Western Canada.
TD Securities acted as financial advisor to Husky for the royalty interests transaction.
Husky Energy is one of Canada’s largest integrated energy companies. It is headquartered in Calgary, Alberta, Canada and its common shares are publicly traded on the Toronto Stock Exchange under the symbol HSE. More information is available at www.huskyenergy.com.