CALGARY (CP) -- Husky Energy [TSX:HSE] expects to pick up production in the second half of the year, boosted by an early startup of its White Rose offshore project after a wet first six months of the year slowed production.
Husky president and chief executive John Lau said Wednesday the company was behind schedule for the first half, but production has accelerated in the third quarter.
''In particular the White Rose project will start about two months ahead of schedule,'' Lau told a conference call with analysts.
Production in the second quarter averaged 308,900 barrels of oil equivalent per day, down five per cent from the second quarter of 2004, a decline attributed by Lau to ''unseasonably wet weather.''
The company forecasts production for all of 2005 to average between 325,000 and 350,000 barrels of oil equivalent per day, helped by strong growth in natural gas production.
Bob Coward, Husky's vice-president for Western Canada production, said the company drilled only 120 wells in the first six months, but plans 400 wells at Lloydminister in the second half of the year.
''As far as heavy oil is concerned, we were down due to wet weather; we fully expect to get that 8,000 barrels a day back once the road are in good shape,'' he said.
The company has an array of costly plans for oilsands developments, and is moving forward on its C$500-million Tucker plant in northeastern Alberta near Cold Lake. It has also started advance work on the much larger Sunrise plant which could cost C$10 billion or more.
Lau said Tucker is on schedule with commission expected in the middle of next year.
Husky reported Tuesday that it earned C$394 million or C93 cents per share in the three months ended June 30. That compared with a profit of C$229 million or C54 cents per share in the year-ago period.
Quarterly revenue net of royalties was C$2.49 billion, up from C$2.21 billion, as higher prices outweighed lower production.
Merrill Lynch analyst Andrew Fairbanks maintained his ''neutral'' rating on the stock Wednesday, saying that he expects oil prices to decline in the next several quarters.
''We continue to find Husky among the most intriguing stories among the Canadian integrated oils,'' Fairbanks added.
''Nonetheless, given our expectation of second-half commodity price weakness, we remain cautious on the short-term outlook for Husky shares.''
Husky shares, 71% controlled by Hong Kong billionaire Li Ka-shing and his family, closed at C$49.05, off C16 cents on the day. The stock has a 52-week high and low of C$51.25 and C$26.81.
There have been rumours for months that Chinese companies are interested in buying Husky, pushing the company's shares to all-time highs last November.
(c) The Canadian Press 2005