Husky Energy sheds $1.7B assets, while Precision Drilling reports loss

Husky Energysaid it is selling 65 per centof its ownership interest in some midstream assets in the
Lloydminster region of Alberta and Saskatchewan for $1.7 billion incash.

Husky saidafter the sale to Cheung Kong InfrastructureHoldings Ltd. and Power Assets Holdings Ltd. it will retain a 35 percent interest in the assets and remain the operator.

The assets include about 1,900 kilometres of pipeline in theLloydminster region, 4.1 million barrels of oil storage capacity atHardisty and Lloydminster, and other ancillary assets.

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Husky, one of Canada's largest integrated oil companies, said anew limited partnership is to be formed, with Power Assets holding a48.75 per cent interest, Husky retaining 35 per cent and Cheung KongInfrastructure with a 16.25 per cent.

The announcement came as the company reported its net loss soaredto $458 million, or 47 cents per diluted share, in the first quartercompared with a loss of $69 million, or nine cents per share, in sameprior-year period.

Factors cited by the company included a $50-million aftertaxrelated to its hedging program and an income tax expense of $75million related to prior years.

In a statement released Monday after markets closed, Husky saidits new partners are aligned with expanding its heavy oil business.

"(They) have the funding capacity to build the midstreaminfrastructure requirements associated with the planned constructionof additional Lloyd thermal projects in Saskatchewan and Alberta,"the company said.

Andy Hunter,deputy managing director of CKI, described the dealas an attractive one for his company which "meets our stringentinvestment criteria and offers highly predictable revenues and cashflow."

"The Cheung Kong Group has had investments in Canada for around40 years and finds Canada to have a very good business environment.We will continue to study oil and gas related infrastructureprojects and other suitable investment opportunities in Canada inthe future," Hunter added.

Precision Drilling reports losses

Precision Drilling Corp., meanwhile,hasreported a loss of$19.9 million in its latest quarter compared with a profit of $24.0million last year.

The oilfield services company said the loss amounted to sevencents per share for the quarter ended March 31 compared with aprofit of eight cents in the same quarter last year.

Revenue this quarter totalled $301.7 million, down from $512.1million in the first quarter of 2015, mainly due to lower drillingactivity in the U.S., Canada and internationally.

The company said revenue from its contract drilling services andcompletion and production services segments both fell by 39 per centand 57 per cent, respectively.During the quarter, Precision Drilling saidit received $23million in one-time contract cancellation payments in connectionwith five contracts.

The company said it has been hit by a total of nine contractcancellations since the start of the downturn, which began in late2014.

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