Husky reports a strong Q3 as thermal output continues to grow
Husky Energy reported a 14% increase in its thermal bitumen production in the third quarter, averaging 117,700 bbl/day. Operating costs across its Lloyd, Tucker and Sunrise facilities averaged $10.54 per barrel.
The company says construction is progressing at its 10,000 bbl/day Rush Lake 2 Central Processing Facility, located in the Lloydminster region along the Alberta/Saskatchewan border. Twelve well pairs are being drilled and first oil is now expected sometime in the first quarter of 2019.
Three other heavy oil thermal projects near Lloydminster (Dee Valley, Spruce Lake North and Spruce Lake Central) remain on track to start production in 2020. Each facility will have a design capacity of 10,000 bbl/day, adding another 30,000 bbl/day of production in total.
An additional 14 thermal bitumen projects with a total design capacity of 110,000 bbl/day remain on the books for potential development sometime in the future.
Production at Tucker reached 24,000 bbl/day in Q3 and continues to ramp up towards its nameplate capacity of 30,000 bbl/day. The company has commenced drilling on a new 15-well pad, which is expected to begin steaming before the end of this year. Tucker is expected to reach its design capacity by the end of next year.
Gross production at Sunrise averaged about 40,500 bbl/day of bitumen in the third quarter, rising to 44,300 bbl/day so far in October. Steaming continues on 14 previously drilled well pairs, with 10 well pairs producing oil and the remaining four expected to begin production by the end of this year. Sunrise is a 50/50 joint-venture with BP.
Overall for the third quarter, Husky produced 318,000 boe/day across all its upstream facilities, generating $891 million in funds from operations. Net profits for the quarter rose to $136 million on $380 million in free cash flow. The company also reduced its 2017 capital spending program from about $2.5 billion to a range of $2.2 to $2.3 billion. Husky says the reduction reflects "increased capital efficiencies" and the deferral of planned maintenance at its Lima Refinery to next year.