Thermal heavy oil dominates increased Husky spending plans in 2018: chart

Image: Joey Podlubny/JWN

Husky Energy plans to spend up to $930 million next year on thermal heavy oil production in Alberta and Saskatchewan, the largest asset investment area of the company’s overall 2018 capital budget of up to $3.1 billion.

That's up from 2017 spending expectations of up to $2.3 billion.

The bulk of Husky’s heavy oil spending in 2018 will be at thermal projects in Saskatchewan targeting conventional heavy oil, while the company also plans to continue ramping up production at its two thermal oilsands projects, Tucker and Sunrise.

Husky plans to bring on 60,000 bbls/d of new thermal Saskatchewan production between 2019 and 2021. This includes the 10,000 bbl/d Rush Lake 2 project, which has been accelerated to come onstream in the first quarter of 2019.

Second to thermal heavy oil projects will be investment in Atlantic light oil, where Husky plans to spend up to $775 million. This includes work on the 75,000 bbl/d West White Rose project, which is currently under construction with first oil expected in 2022.

Husky says that new project funding is contingent on meeting a forecast minimum 10 percent rate of return on US$45 WTI.

The company expects overall production in 2018 to average between 320,000 and 355,000 boe/d, flat with expectations for this year, despite 20,000 boe/d in 2017 asset sales expected to close by year-end.