Husky Energy achieves 174% reserves replacement ratio

Source: Husky Energy

Husky Energy Inc. (TSX:HSE) achieved a proved reserves replacement ratio before royalties of 174 percent for the year ended December 31, 2010. The reserves replacement exceeded the Company’s target of 140 percent, and is a reflection of the significant activity undertaken in 2010 to further major projects, grow organic production, and capitalize on attractive acquisition opportunities. 

“We have made significant strides over the past eight months to meet our operational and financial targets,” said Husky CEO Asim Ghosh. “The reserve replacement ratio and the overall growth in our proved reserves is a strong indicator of the wealth of development opportunities in our portfolio. Our growth strategy and comprehensive financing plan will allow us to bring forward the most attractive opportunities to create additional shareholder value.” 

Proved reserves (before royalties) highlights include the following: 

The Company’s reserves life index is 10.3 years, a 15 percent increase over 2009. 

The reserve replacement ratio for 2010 of 174 percent includes the acquisition of properties in west central Alberta, which added 33 million barrels of oil equivalent (boe) of proved reserves, estimated as at December 31, 2010. Other acquisitions added 3 million boe. Excluding acquisitions, the proved reserve replacement ratio was 140 percent. 

Total proved reserves as at December 31, 2010, based on forecast prices, were 1.08 billion boe, an eight percent increase over 2009. 

Proved plus probable reserves were 2.4 billion boe, a four percent increase over 2009. 

In addition to acquisitions, other notable contributions to proved reserves included the Sunrise Energy Project which added 56 million boe andthe Company’s Madura, Indonesia project which added 44 million boe. The Sunrise Energy Project was sanctioned in 2010 and major engineering procurement and construction contracts awarded. Front end engineering of the Madura BD natural gas project was completed and a 20-year extension to the Madura Straits Production Sharing Contract was granted by the Government of Indonesia. 

An independent audit of the Company’s reserves has concluded that Husky’s reserves, in aggregate, are reasonable. 

The 2010 proved reserves do not include additions from the purchase of properties from ExxonMobil Canada Ltd., which closed in February of 2011.

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