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by Stockwatch Business Reporter
West Texas Intermediate crude for June delivery lost 10 cents to $59.14 on the New York Merc, while Brent for July lost five cents to $70.11 (all figures in this para U.S.). Western Canadian Select traded at a discount of $17.30 to WTI, down from a discount of $16.35. Natural gas for June added one cent to $2.58. The TSX energy index lost 1.62 points to close at 144.59.
Li Ka-shing's Husky Energy Inc. (HSE) reached an intraday high of $12.92 before reversing course and closing at $12.56, down five cents, on 3.51 million shares. The company had no doubt hoped for a better reaction to the new five-year plan that it announced at its investor day in Toronto. The gist of the plan is that spending is down and cash flow is up. Husky now expects to spend an average of $3.15-billion a year from 2019 to 2023, compared with its previous target, set during last year's investor day, of spending $3.5-billion annually from 2018 to 2022. That works out to about $1.7-billion in savings over the previous plan. With these spending cuts, Husky has eased back on its production plans and now expects to surpass 400,000 barrels of oil equivalent a day in 2023 rather than 2022, compared with this year's production target of about 300,000 barrels a day. Despite the lower production target, Husky's free cash flow before dividends is now pegged at $8.7-billion in total from 2019 to 2023, nearly double the prior forecast of $4.8-billion from 2018 to 2022. Husky emphasized that neither its sustaining capital requirements nor its oil price assumptions have changed under the new plan. The cash flow improvements, claimed management, are down to cost cuts, margin improvements and "general operational excellence."
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