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Husky Energy not to extend its offer to purchase MEG

SanRose FPSO (Image credit: Husky Energy)

JAKARTA (RambuEnergy.com) – Calgary, Alberta-based oil and gas company Husky Energy (TSX: HSE) on Thursday (Jan 17) announced that it has decided not to extend its offer for the MEG Energy which expired on Jan. 16 after the minimum tender condition was not met as well as insufficient MEG Board and shareholder support.

Since the offer commenced 105 days ago, there have been several negative surprises in the business and economic environment. These include the Alberta government’s departure from free-market principles which caused uncertainty through the imposition of government-mandated production cuts as well as the continued lack of meaningful progress on Canadian oil export pipeline developments.

“Given the outcome of the tender process, Husky will continue to focus on capital discipline and the delivery of the five-year plan we set out at our Investor Day in May 2018,” said CEO Rob Peabody.

“We are investing in reliable, higher margin production growth that continues to lower the oil price we need to break even. Both our Integrated Corridor and high-netback Offshore businesses receive global pricing and provide insulation from ongoing commodity price volatility.”

Record daily production rates were achieved at the Sunrise Energy Project (62,600 barrels per day (bbls/day) gross) and Tucker Thermal Project (31,700 bbls/day) in the fourth quarter of 2018.

Sunrise has been in operation since 2015, with significant investments made to enhance production over the past three years. Husky continues to work with the Alberta government to mitigate inequities in the curtailment methodology, costs and other unintended consequences.

Husky’s financial priorities are to maintain a strong balance sheet, return cash to shareholders through a dividend and to invest in a deep portfolio of organic projects, which further improves its resiliency and provides for strong and stable free cash flow. (*)

Edited by Roffie Kurniawan (email: roffie.kurniawan@gmail.com)

 

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