Contact Information: Husky Energy Inc. - Investor Inquiries Rob McInnis Manager, Investor Relations 403-298-6817 or Husky Energy Inc. - Media Inquiries: Graham White Corporate Communications 403-298-7088 www.huskyenergy.com
CALGARY, ALBERTA--(Marketwire - March 9, 2011) - Husky Energy Inc. (TSX:HSE) is pleased to announce the Company achieved a proved reserves replacement ratio before royalties of 174 percent for the year ended December 31, 2010. The reserves replacement exceeded the Company's target of 140 percent, and is a reflection of the significant activity undertaken in 2010 to further major projects, grow organic production, and capitalize on attractive acquisition opportunities.
"We have made significant strides over the past eight months to meet our operational and financial targets," said CEO Asim Ghosh. "The reserve replacement ratio and the overall growth in our proved reserves is a strong indicator of the wealth of development opportunities in our portfolio. Our growth strategy and comprehensive financing plan will allow us to bring forward the most attractive opportunities to create additional shareholder value."
Proved reserves (before royalties) highlights include the following:
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-- The Company's reserves life index is 10.3 years, a 15 percent increase
over 2009.
-- The reserve replacement ratio for 2010 of 174 percent includes the
acquisition of properties in west central Alberta, which added 33
million barrels of oil equivalent (boe) of proved reserves, estimated as
at December 31, 2010. Other acquisitions added 3 million boe. Excluding
acquisitions, the proved reserve replacement ratio was 140 percent.
-- Total proved reserves as at December 31, 2010, based on forecast prices,
were 1.08 billion boe, an eight percent increase over 2009.
-- Proved plus probable reserves were 2.4 billion boe, a four percent
increase over 2009.
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The reporting of 2010 reserves reflects a transition from disclosure requirements prescribed by the U.S. Securities and Exchange Commission (SEC) to Canadian National Instrument 51-101 rules (NI 51-101).
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2010 Reserves Reconciliation
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Proved Probable TOTAL
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Developed Undeveloped Total
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Start of 2010 (SEC)(1) 667 266 933 1,374 2,307
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Start of 2010 (NI 51-101)(2) 707 297 1,004 1,407 2,411
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Production (105) 0 (105) 0 (105)
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Acquisitions 35 1 36 11 47
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Divestitures 0 0 0 0 0
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Additions 27 143 170 30 200
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Transfers 30 (30) 0 (107) (107)
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Technical Revisions (2) (9) (11) (20) (31)
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Price Revisions (11) (2) (13) (3) (16)
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End of 2010 (NI 51-101)(3) 681 400 1,081 1,318 2,399
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(1) Reserves are based on 12 month average in accordance with U.S.
disclosure requirements using constant pricing as prescribed by the SEC.
(2) Reserves changes reflect transition from SEC to NI 51-101 rules, which
requires the use of forecast prices.
(3) Based on 2010 year-end forecast prices
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In addition to acquisitions, other notable contributions to proved reserves included the Sunrise Energy Project which added 56 million boe and the Company's Madura, Indonesia project which added 44 million boe. The Sunrise Energy Project was sanctioned in 2010 and major engineering procurement and construction contracts awarded. Front end engineering of the Madura BD natural gas project was completed and a 20-year extension to the Madura Straits Production Sharing Contract was granted by the Government of Indonesia.
An independent audit of the Company's reserves has concluded that Husky's reserves, in aggregate, are reasonable.
The 2010 proved reserves do not include additions from the purchase of properties from ExxonMobil Canada Ltd., which closed in February of 2011.
A full reporting of the Company's oil and natural gas reserves data for the year ended December 31, 2010, has been included in the Annual Information Form (AIF), filed with Canadian securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) and may be accessed electronically at www.sedar.com.
Husky Energy is an integrated energy company headquartered in Calgary, Alberta, Canada. Husky Energy is a publicly traded company listed on the Toronto Stock Exchange under the symbol HSE. More information is available at www.huskyenergy.com.
FORWARD LOOKING INFORMATION
Certain statements in this document are forward-looking statements or information (collectively "forward-looking statements"), within the meaning of the applicable securities legislation. 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 result," "are expected to," "will continue," "is anticipated," "estimated," "intend," "plan," "projection," "could," "vision," "goals," "objective" and "outlook") are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. In particular, this document includes forward-looking statements relating to the Company's general strategic plans; the capability of the Company's growth strategy and financing plan to bring forward opportunities to create shareholder value; the Company's reserves life index; and the Company's reserves estimates. Although Husky believes that the expectations reflected by the forward-looking statements presented in this document are reasonable, Husky'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 Husky 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. Husky's Annual Information Form 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 which 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, Husky disclaims any intention or obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. 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.
DISCLOSURE OF OIL AND GAS RESERVES AND OTHER OIL AND GAS INFORMATION
The Company uses the terms barrels of oil equivalent ("boe") and thousand cubic feet of gas equivalent ("mcfge"), which are 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 terms boe and mcfge 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.