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Energy Summary for May 15, 2019

2019-05-15 20:27 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery added 24 cents to $62.02 on the New York Merc, while Brent for July added 53 cents to $71.77 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.83 to WTI, unchanged. Natural gas for June lost six cents to $2.60. The TSX energy index added a fraction to close at 153.41.

Li Ka-shing's Husky Energy Inc. (HSE) added 25 cents to $13.55 on 2.46 million shares, after trying to pique the market's interest in its business plans. It has scheduled an investor day in Toronto on Tuesday, May 28. Husky's president and chief executive officer, Rob Peabody, had already told investors during a conference call in February that the company would be holding an investor day during May. As he stated during that call, and as Husky repeated in its date-setting announcement, a highlight of the investor day will be an update on the company's five-year plan.

Husky previously laid out a five-year plan at an investor day last year. The plan has become significantly fuzzier since then, however, due to factors both in and out of Husky's control. Notably, the five-year plan had called for the company to spend $3.7-billion and produce around 325,000 barrels of oil equivalent a day in 2019, but Husky has since set its 2019 guidance at about $3.4-billion and about 298,000 barrels a day, citing (among other things) the Alberta government's mandatory production curtailments. As well, in 2018 and 2019, Husky made and then abandoned a hostile takeover bid for oil sands producer MEG Energy Corp. (MEG: $5.43), raising questions about whether it will pursue further acquisitions in the coming months (although Mr. Peabody has tried to curb such rumours). On top of all that, Husky announced in January that it was considering selling some of its downstream assets, namely its refinery in Prince George, B.C., and a collection of over 500 gas stations (plus other retail bits and bobs). The valuations of these assets have been wide-ranging. Analysts have pegged their possible price tag at anywhere from $675-million to $1.5-billion. All of the above will give investors plenty to talk about at the May 28 investor day.

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