Husky Energy (TSX:HSE) today announced it has reached an
agreement for the sale of its Prince George Refinery to Tidewater
Midstream and Infrastructure for $215 million in cash plus a
closing adjustment for inventory, and a contingent payment of up to
$60 million over two years.
Husky previously announced it was considering
selling the Prince George Refinery to focus on its Integrated
Corridor and Offshore businesses. The Integrated Corridor is a
series of physically-linked assets that includes upstream thermal
crude production, storage, committed pipeline capacity and
refineries. The Integrated Corridor is designed to maximize margin
capture, access to markets and optionality. The Offshore business
focuses on oil and gas production off Canada’s East Coast and in
the Asia Pacific region.
“We continue to deliver on Husky’s five-year
plan outlined at our Investor Day in May, with an ongoing focus on
capital discipline, consistent execution and increased margins,”
said CEO Rob Peabody. “The plan is aimed at further enhancing the
resiliency of the Company.”
Proceeds of the sale will be used in accordance
with Husky’s funding priorities, which include maintaining the
strength of the balance sheet and returning value to
shareholders.
Tidewater is retaining all Refinery staff.
The transaction is expected to close in the
fourth quarter of 2019, subject to regulatory approvals.
The 12,000 barrel-per day Prince George
Refinery, located in Prince George, B.C., processes light oil into
low-sulphur gasoline and ultra-low sulphur diesel, along with other
products. As part of the sale, Husky will enter into a five-year
offtake agreement with Tidewater for refined products from the
Prince George Refinery.
The strategic review of Husky’s retail and
commercial fuels business continues to progress.
TD Securities Inc. is acting as financial
advisor, with Torys LLP as legal advisor.
Investor and Media
Inquiries:
Leo Villegas, Senior Manager, Investor Relations
403-513-7817
Mel Duvall, Senior Manager, Media &
Issues403-513-7602
FORWARD-LOOKING STATEMENTS
Certain statements in this news release are
forward-looking statements and information (collectively,
“forward-looking statements”), within the meaning of the applicable
Canadian securities legislation, Section 21E of the United States
Securities Exchange Act of 1934, as amended, and Section 27A of the
United States Securities Act of 1933, as amended. The
forward-looking statements contained in this news release are
forward-looking and not historical facts.
Some of the forward-looking statements may be
identified by statements that express, or involve discussions as
to, expectations, beliefs, plans, objectives, assumptions or future
events or performance (often, but not always, through the use of
words or phrases such as “will likely result”, “are expected to”,
“will continue”, “is anticipated”, “is targeting”, “estimated”,
“intend”, “plan”, “projection”, “could”, “aim”, “vision”, “goals”,
“objective”, “target”, “schedules” and “outlook”).
In particular, forward-looking statements in
this news release include, but are not limited to, references to:
the contingent payment of up to $60 million over two years; the aim
of the Company’s five-year plan; the anticipated use of proceeds of
the sale; the expected closing date of the transaction; and the
entering into of an offtake agreement.
Although the Company believes that the
expectations reflected by the forward-looking statements presented
in this news release are reasonable, the Company’s forward-looking
statements have been based on assumptions and factors concerning
future events that may prove to be inaccurate. Those assumptions
and factors are based on information currently available to the
Company about itself and the businesses in which it operates.
Information used in developing forward-looking statements has been
acquired from various sources, including third-party consultants,
suppliers and regulators, among others.
Because actual results or outcomes could differ
materially from those expressed in any forward-looking statements,
investors should not place undue reliance on any such
forward-looking statements. By their nature, forward-looking
statements involve numerous assumptions, inherent risks and
uncertainties, both general and specific, which contribute to the
possibility that the predicted outcomes will not occur. Some of
these risks, uncertainties and other factors are similar to those
faced by other oil and gas companies and some are unique to the
Company.
The Company’s Annual Information Form for the
year ended December 31, 2018 and other documents filed with
securities regulatory authorities (accessible through the SEDAR
website www.sedar.com and the EDGAR website www.sec.gov) describe
some of the risks, material assumptions and other factors that
could influence actual results and are incorporated herein by
reference.
New factors emerge from time to time and it is
not possible for management to predict all of such factors and to
assess in advance the impact of each such factor on the Company’s
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement. The impact of any one
factor on a particular forward-looking statement is not
determinable with certainty as such factors are dependent upon
other factors, and the Company’s course of action would depend upon
management’s assessment of the future considering all information
available to it at the relevant time. Any forward-looking statement
speaks only as of the date on which such statement is made and,
except as required by applicable securities laws, the Company
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events.