How Do Gas Companies Spin The Increase In Profits

how do gas companies spin the increase in profits

Husky Energy boosts net profits 194 per cent in Q4 as production grows

CALGARY - Husky Energy Inc. nearly tripled its profits in the fourth quarter as the big integrated oil and gas company hiked production and benefited from higher oil prices.

The Calgary-based company (TSX:HSE) said Thursday its fourth quarter profits jumped to $408 million, or 42 cents a share, from $139 million, or 16 cents, a year earlier.

Net revenues soared to more than $5.8 billion from nearly $4.3 billion.

The results missed analyst estimates of 55 cents per share and revenues of $6.3 billion, according to Thomson Reuters.

Production in the quarter grew 14 per cent to 318,900 oil equivalent barrels a day.

"The positive results in the fourth quarter capped a solid year of performance for the company," CEO Asim Ghosh said in a release.

"We were able to capitalize on improved crude oil prices and refining margins by increasing production and by maintaining high operational performance in our upgrading and refining facilities."

For the full year, Husky earned net profits of $2.2 billion, or $2.34 per share, compared with $947 million, or $1.05 a share in 2010. Annual revenues jumped to $23.4 billion from $17.1 billion, while yearly cash flows from operations increased to $5.2 billion from $3.1 billion.

Husky, controlled by Hong Kong billionaire Li Ka-Shing, produces oil and gas in Western Canada, off Canada's east coast and in southeast Asia.

In December, Husky laid out a $4.7-billion budget for 2012, with large chunks of that capital going towards its Sunrise oilsands project, operations in southeast Asia and bread-and-butter oil and gas holdings in Western Canada.

The energy company plans to spend $610 million on Sunrise, part of a joint-venture with British oil giant BP PLC, as construction ramps up and its 2014 targeted startup date approaches. The first phase of Sunrise will produce 60,000 barrels per day and is expected to cost $2.5 billion.

Husky said Thursday the project is on schedule and that drilling costs are trending on budget. More than half of the 49 well pairs for the steam-assisted gravity drainage project are complete.

Just over $1 billion is earmarked for Husky's southeast Asia operations, with its Liwan field set to start production in 2013 or 2014.

Husky had contemplated spinning off its southeast Asian properties into a new publicly traded company, but ultimately decided in late 2010 to keep the high-growth assets in its portfolio.

Husky is also looking to boost its foundation in Western Canada, with $1 billion in capital expenditures planned for the Western Canadian Sedimentary Basin.

Husky also has interests in BP-operated refineries in the United States, and a chain of Husky-branded fuel retail outlets in Canada.

Shares in Husky rose 28 cents to $25.16 in Thursday morning trading on the Toronto Stock Exchange.

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