Husky Energy saw a $304 million net loss this past quarter as they recovered from crashing oil prices in the spring.
Revenues were $2.38 billion, half of what they were in the same quarter last year.
The company listed a capital expenditure of $310 million to safely ramp-down activities at the West White Rose Project in Newfoundland and Labrador and the Superior Refinery.
Expenditures also come from the completion of the 10,000-barrel a day Spruce Lake Central project which began steaming in mid-June. First oil at the facility is expected to happen in the third quarter.
Husky continued full operations at the Lloydminster Asphalt Refinery during the quarter due to strong asphalt pricing. Throughput at the facility was 28,200 barrels a day, compared to 26,100 barrels a day in the same quarter in 2019.
Overall quarterly production fell to 247,000 barrels of oil equivalent per day as Husky shut-in production. Throughput at the Lloydminster Upgrader was 65,700 barrels a day which was down from 73,400 barrels a day in the same period in 2019.
Production at the upgrader were cut back early in the second quarter, but was brought back up when demand increased.
CEO Rob Peabody says they cut production in the second half of March and avoided selling at low heavy crude oil prices.
“Then entered May at a low production rate limiting sales at the unfavourable May index price. As the May spot contract prices improved we were able to substantially increase production and sell into this rising spot market capturing the wide spread between May spot and index pricing.”
CFO Jeff Hart says the company changed their operating model by centralizing and optimizing operations to create savings.
“Looking forward, our number one financial priorities in the coming months is to maintain the strength of the balance sheet. Additionally, we are continuing to work on lowering operating costs in ongoing capital sustaining requirements and have identified $150 million in cost efficiencies.”
Peabody says they are watching demand closely and calibrate based on the demand to avoid overproduction.
“We are being cautious not to outstrip physical demand and continue to pace our throughput with our product liftings. We expect the path forward to be bumpy and we’ll continue to respond rapidly.”
The six-week turnaround at the Lloydminster upgrader is still planned for the third quarter. A four-week turnaround is also scheduled for the end of the third quarter at the Tucker thermal project near Cold Lake.