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February 2019 Corporate Presentation – Husky Energy Inc.

Husky Energy Inc. · Feb 26, 2019 · 54 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. February 2019 Corporate Presentation – Husky Energy Inc. – slide 1
  2. February 2019 Corporate Presentation – Husky Energy Inc. – slide 2
    Value Proposition Resilient and Well Positioned to Capture Upside Growing Funds Flow and Free Cash Improving Cost Structure and Margin Capture Returns- Focused Growth Re-Investment and Dividend 2 • Production and throughput…
  3. February 2019 Corporate Presentation – Husky Energy Inc. – slide 3
    Updated Five-Year Plan (2018-2022) Plan Remains On Track, Using Flat $60 US WTI $B Funds From Operations CAGR ’18A-’22F 6% Key Metrics ’18 ’22F ’18-22F CAGR1 Cash Flow Operating Activities $4.1B $5B 6% Funds from operations…
  4. February 2019 Corporate Presentation – Husky Energy Inc. – slide 4
    Resilience to Unpredictable Commodity Prices Setting Husky Apart Net Debt to Trailing FFO1 (Q4 ’18) Peer Group times Resilience through: • Strong balance sheet • Integrated model • Growing high netback, fixed-price business in…
  5. February 2019 Corporate Presentation – Husky Energy Inc. – slide 5
    Tight Integration Largely Eliminates Differentials Setting Husky Apart Resilience through: xx • Strong balance sheet • Integrated model • Growing high netback, fixed-price business in Asia • High weighting of low sustaining…
  6. February 2019 Corporate Presentation – Husky Energy Inc. – slide 6
    Growing High Netback Business in Asia Setting Husky Apart 6 Resilience through: • Strong balance sheet • Integrated model • Growing high netback, fixed-price business in Asia • High weighting of low sustaining capital assets and…
  7. February 2019 Corporate Presentation – Husky Energy Inc. – slide 7
    Resilience through: • Strong balance sheet • Integrated model • Growing high netback, fixed-price business in Asia • High weighting of low sustaining capital assets and projects • Low earnings break-evens Growing Proportion of Low…
  8. February 2019 Corporate Presentation – Husky Energy Inc. – slide 8
    Resilience through: • Strong balance sheet • Integrated model • Growing high netback, fixed-price business in Asia • High weighting of low sustaining capital assets and projects • Low earnings break-evens Low Break Evens, And…
  9. February 2019 Corporate Presentation – Husky Energy Inc. – slide 9
    W. Canada Bitumen and Heavy Oil – Shielded Through Integration W. Canada Gas Not Exposed to AECO Discount Asia Pacific Gas – Receiving ~5x Current AECO Gas Price Offshore Liquids – Receives World Oil Pricing W. Canada Oil and Gas…
  10. February 2019 Corporate Presentation – Husky Energy Inc. – slide 10
    ESG Performance and Reporting Measuring Performance and Improving Disclosures Water use and availability Air emissions management, including carbon Land use and reclamation Community & Indigenous People’s Engagement Business…
  11. February 2019 Corporate Presentation – Husky Energy Inc. – slide 11
    Two Businesses Each Has Built-in Sustainable Competitive Advantages Integrated Corridor Offshore 11 Asia Pacific Atlantic
  12. February 2019 Corporate Presentation – Husky Energy Inc. – slide 12
    Five-Year Plan Milestones Project Execution in the Integrated Corridor and Offshore
  13. February 2019 Corporate Presentation – Husky Energy Inc. – slide 13
    1.Maintain
  14. February 2019 Corporate Presentation – Husky Energy Inc. – slide 14
    Balance Sheet Low Leverage, Ample Liquidity Net debt $2.9 billion, including $2.9 billion in cash • $4.3 billion in unused credit facilities • Total debt to capital employed: 22.7% (Q4 ‘18) • Debt…
  15. February 2019 Corporate Presentation – Husky Energy Inc. – slide 15
    Capex Program Drives Improving Cost Structure Lowering Operating Costs and Break-Even Oil Price Investment hurdle rate of 10% IRR at $45 US WTI and/or $2.00 per mcf AECO • Investment options in both the Integrated Corridor and…
  16. February 2019 Corporate Presentation – Husky Energy Inc. – slide 16
  17. February 2019 Corporate Presentation – Husky Energy Inc. – slide 17
    Integrated Corridor Optimizing the Entire Value Chain Reserves base (YE ’18) • 2.2 billion boe of proved & probable reserves Production of 241 mboe/day (Q4 ’18) • 133 mbbls/day thermal bitumen • 60 mbbls/day non-thermal oil and…
  18. February 2019 Corporate Presentation – Husky Energy Inc. – slide 18
    Integrated Corridor Growing Higher Quality Production and Increasing Downstream Flexibility Integrated Corridor Upstream Production Profile Thermal Development Western Canada Production Cold & EOR mboe/day Heavy Oil & Bitumen…
  19. February 2019 Corporate Presentation – Husky Energy Inc. – slide 19
    Lloyd Advantage Full Value Chain Netbacks Low cost thermal production • Low cost refining and upgrading • Higher value, diverse basket of finished products1,2 • Higher finished product yield (98%) • Extensive local market demand…
  20. February 2019 Corporate Presentation – Husky Energy Inc. – slide 20
    Sunrise to Toledo “One-Step” Refining, No Upgrading Required 20 • Toledo high-TAN project added processing capacity for all Sunrise crude • Dilbit delivered directly to Toledo • No upgrading cost, no volume lost • High finished…
  21. February 2019 Corporate Presentation – Husky Energy Inc. – slide 21
    Midstream Value Chain Crude Storage and Export Pipeline Capacity to U.S. Capturing Location Differentials Midstream Value Chain (Q4 ‘18) • 75,000 bbls/day capacity on existing Keystone • 3.1 million barrels of storage at Hardisty…
  22. February 2019 Corporate Presentation – Husky Energy Inc. – slide 22
  23. February 2019 Corporate Presentation – Husky Energy Inc. – slide 23
    Maximizing Value From Every Barrel Downstream • Maintain Downstream integration with Upstream production • Insulation from both location and quality differentials • Ongoing investments to increase heavy oil processing capacity •…
  24. February 2019 Corporate Presentation – Husky Energy Inc. – slide 24
    Matching Heavy Processing to Upstream Production 24 0 40 80 120 160 200 240 280 320 \'18 \'19F \'20F \'21F \'22F \'18F \'19F \'20F \'21F \'22F Lloyd / Tucker Thermal Bitumen Keystone Capacity (Available Capacity) Sunrise…
  25. February 2019 Corporate Presentation – Husky Energy Inc. – slide 25
    Flexibility of Feedstock, Product Mix and Markets Downstream Connectivity
  26. February 2019 Corporate Presentation – Husky Energy Inc. – slide 26
  27. February 2019 Corporate Presentation – Husky Energy Inc. – slide 27
    Tightly Integrated Growth Engine Heavy Oil and Oil Sands • 170,000 bbls/day today, growing ~40% to ~240,000 bbls/day by 2022 • Modular, scalable designs lowering operating costs and sustaining capital requirements • Physically…
  28. February 2019 Corporate Presentation – Husky Energy Inc. – slide 28
    Large Inventory of Low Cost Production Thermal Business Thermal Bitumen Production Growth (2018-2022F) 0 25 50 75 100 125 150 175 200 225 \'18 \'19F \'20F \'21F \'22F Thermal Bitumen Production ’18 -’22F 50+% mbbls/day…
  29. February 2019 Corporate Presentation – Husky Energy Inc. – slide 29
    Improving Capital Efficiency & Operating Costs Thermal Business 0 5 10 15 20 25 30 \'14 \'15 \'16 \'17 \'18 Sunrise Tucker Lloyd Thermal Average $/bbl Lloyd Thermal Project Capital Efficiency Improvements Thermal Production…
  30. February 2019 Corporate Presentation – Husky Energy Inc. – slide 30
    60,000 Barrels Per Day Sunrise Energy Project • Reached design capacity of 60,000 bbls/day (total) • Target production per well pair: 800-900 bbls/day • 55 well pairs in Initial Development Area now at 815 bbls per well pair • 14…
  31. February 2019 Corporate Presentation – Husky Energy Inc. – slide 31
    Unlocking Further Potential At Sunrise Next Steps • De-bottlenecking initiatives to create future capacity • Regulatory approvals in place for 200,000 bbls/day (total) • Targeting increased returns with modular approach and…
  32. February 2019 Corporate Presentation – Husky Energy Inc. – slide 32
    Competitive stand-alone business • Flexible short-cycle capital spending profile • Minimal AECO exposure • Pivoting to liquids • Multiple egress options enable growth • Room to run 33 Production Growth Profile mboe/day Legacy…
  33. February 2019 Corporate Presentation – Husky Energy Inc. – slide 33
    Competitive stand-alone business • Flexible short-cycle capital spending profile • Minimal AECO exposure • Pivoting to liquids • Multiple egress options enable growth • Room to run 33 Production Growth Profile mboe/day Legacy…
  34. February 2019 Corporate Presentation – Husky Energy Inc. – slide 34
    Wembley-Montney Appraisal Complete, Moving to Development 34 Wembley position within an established fairway • 50 net developable sections in liquids-rich gas window • Multi-layer pad development potential • Future development…
  35. February 2019 Corporate Presentation – Husky Energy Inc. – slide 35
    Ansell Spirit River Building Towards Full Field Development 35 • Development moving from Wilrich to full Spirit River • Drilling to keep pace with capacity and egress • 350 Spirit River potential drilling opportunities1,2 • Cardium…
  36. February 2019 Corporate Presentation – Husky Energy Inc. – slide 36
    Minimal Exposure To AECO Market Optionality Integration delivers value • Production offsets gas consumption • 160 mmcf/day export capacity to U.S. markets • Forward sales of gas volumes • Gas storage for seasonal sales Positioned…
  37. February 2019 Corporate Presentation – Husky Energy Inc. – slide 37
  38. February 2019 Corporate Presentation – Husky Energy Inc. – slide 38
    Self-Funding, Synchronized Build-Harvest Cycles
  39. February 2019 Corporate Presentation – Husky Energy Inc. – slide 39
    Infill Wells Bridging to West White Rose Active Development Program • ~75,000 bbls/day peak production (52,500 bbls/day Husky W.I.) in 2025 • Low incremental operating costs • Construction of Concrete Gravity Structure and topsides…
  40. February 2019 Corporate Presentation – Husky Energy Inc. – slide 40
    Infill Wells Bridging to West White Rose Active Development Program • ~75,000 bbls/day peak production (52,500 bbls/day Husky W.I.) in 2025 • Low incremental operating costs • Construction of Concrete Gravity Structure and topsides…
  41. February 2019 Corporate Presentation – Husky Energy Inc. – slide 41
    Exploration Short, Mid and Long Cycle Projects 41 Near-term: Near-Field Exploration Success • White Rose A-24 discovery in 2018 • Encountered 85+ metre net pay thickness oil-bearing sandstones • Northwest White Rose A-78 in 2017 •…
  42. February 2019 Corporate Presentation – Husky Energy Inc. – slide 42
  43. February 2019 Corporate Presentation – Husky Energy Inc. – slide 43
    High Netback Production and FFO Stability Asia Pacific Business Delivering >$60 per boe Operating Netbacks Liwan Start Up 1 See Slide Notes and Advisories 0 20 40 60 80 100 0 20 40 60 80 100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2…
  44. February 2019 Corporate Presentation – Husky Energy Inc. – slide 44
    China (Liwan 3-1, Liuhua 34-2 & 29-1) • Q4 2018 production of ~197 mmcf/day (3-1 & 34-2) • Take-or-pay contract 165 mmcf/day (net) • 29-1 field sanctioned, first gas expected in 2020 • $250M US in exploration cost recovery Indonesia…
  45. February 2019 Corporate Presentation – Husky Energy Inc. – slide 45
    Mid-Term Appraisal / Exploration Projects Ongoing Exploration Throughout the Region 45 China Liwan Gas Project Hong Kong Hainan Blocks 15/33 & 16/25 • New discovery on 15/33 • Shallow water • Close proximity to FPSO •…
  46. February 2019 Corporate Presentation – Husky Energy Inc. – slide 46
    Key Metrics ’18 ’22F ’18-22F CAGR1 Cash Flow Operating Activities $4.1B $5B 6% Funds from operations (FFO) $4B $5B 6% Free cash flow (FCF) $0.4B $1.4B 9% Upstream production (mboe/day) 299 410-420 7% Downstream throughputs…
  47. February 2019 Corporate Presentation – Husky Energy Inc. – slide 47
  48. February 2019 Corporate Presentation – Husky Energy Inc. – slide 48
    2019 Guidance Summary Last Updated February 25, 2019 1,2,3,4,5,6 see Slide Notes and Advisories Capital Guidance1 ($ millions) Production Guidance Upstream Crude Oil and Liquids (mbbls/day) Thermal & Oil Sands 730 - 760 Thermal & Oil…
  49. February 2019 Corporate Presentation – Husky Energy Inc. – slide 49
    Price Planning Assumptions 2017 vs. 2018 Five-Year Plan / Stress Case Benchmark Prices – 2018 Base Case 2019 2020 2021 2022 WTI (US $bbl) 60.00 60.00 60.00 60.00 Chicago 3:2:1 ($/bbl US) 16.00 16.00 16.00 16.00 Heavy crude…
  50. February 2019 Corporate Presentation – Husky Energy Inc. – slide 50
    Price Planning Assumptions Other Cases Benchmark Prices – $70 Flat Case 2019 2020 2021 2022 WTI (US $bbl) 70.00 70.00 70.00 70.00 Chicago 3:2:1 ($/bbl US) 16.00 16.00 16.00 16.00 Heavy Crude Differential ($/bbl US) 18.00 18.00 18.00…
  51. February 2019 Corporate Presentation – Husky Energy Inc. – slide 51
    Capacity: 80 mbbls/day • Produces Husky Synthetic Crude (HSB) • Low operating costs Lloyd Complex U.S. Refining & Marketing Pipelines & Storage • 110,000 bbls/day processing capacity • Physically connected to Lloyd and Tucker •…
  52. February 2019 Corporate Presentation – Husky Energy Inc. – slide 52
    Configured to Benefit From IMO 2020 Rule Flexibility to Adjust to Market Conditions Oil-Based Marine Fuel Consumption Refined Products By Facility (Percentage of Throughput) 48% 8% 27% 43% 71% 37% 13% 55% 6% 9% 45% 21% 16%…
  53. February 2019 Corporate Presentation – Husky Energy Inc. – slide 53
    Innovation and Technology Unlocking Further Potential Production Optimization • Diluent reduction module for lower costs, GHG emissions at Sunrise (pilot under construction) • Improved steam utilization and process safety using…
  54. February 2019 Corporate Presentation – Husky Energy Inc. – slide 54

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