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by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery lost 85 cents to $45.83 on the New York Merc, while Brent for November added 16 cents to $49.08 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.25 to WTI ($31.58), unchanged. Natural gas for October added 0.4 cent to $2.577. The TSX energy index lost 3.02 points to close at 170.25.

Husky Energy Inc. (HSE) lost 40 cents to $20.97 on 2.12 million shares, despite an upbeat press release about its heavy oil thermal operations and its Sunrise oil sands project in Western Canada. These are on schedule to add 65,000 barrels a day by the end of next year. (Husky produced a total of 337,000 barrels of oil equivalent a day in the second quarter of this year.) The company pointed to these low-cost projects as evidence of its ability to withstand prolonged low prices, but investors seemed to remain distracted by a recent spate of bad news, which has sent the stock down by nearly $2.50 in the last three weeks. There was a gas leak at Husky's White Rose field offshore Newfoundland at the beginning of the month, as well as a fire at its refinery in Lima, Ohio, this weekend. Even more significantly, over the last week, a shadow fell over Husky's plan to make Atlantic Canada one of its three "growth pillars." Husky has long wanted to explore and develop more of Eastern Canada and Greenland. In late 2012, it awarded a five-year drilling contract to Seadrill Ltd., which had recently hired a South Korean shipyard to build a special rig for drilling in very deep waters and harsh environments. The rig was originally supposed to arrive on the East Coast for Husky's use this year. The shipyard is far behind, however, and last week, Seadrill announced that it had cancelled the construction contract, meaning Husky would not be getting the rig after all. Seadrill then announced this morning that Husky had cancelled their five-year contract. Husky has not made an announcement, so it is unclear whether it plans to find a new rig and drilling company, or simply put those Atlantic plans on hold. It does have two other "growth pillars" -- the Canadian oil sands and Asia-Pacific -- so it does not really need new Eastern Canadian resources. Still, investors might appreciate an update.

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