CALGARY—Husky Energy is assuming oil will be worth US$40 a barrel next year and that future investments will be able to break even with West Texas Intermediate crude at US$30 per barrel—which is below the latest price.
The Calgary-based company is projecting a 2016 capital budget between $2.9 billion and $3.1 billion—about in line with this year—including sustaining and maintenance costs in the range of $2.4 billion and $2.6 billion.
It also says 2015 total capital spending is on track to be within previously announced guidance of $3 billion.
The company says next year’s sustaining and maintenance costs will be 15 to 20 per cent below the historical average of $3 billion but it hasn’t disclosed the level of this spending in 2015.
Husky says the 2016 capital budget includes between $700 million and $800 million on its heavy oil projects and $100 million on oilsands.
It also plans to spend at least $400 million each in its other upstream operations in Atlantic Canada, Western Canada and the Asia Pacific region and $800 million on its North American refineries.
Husky also plans to speed up the sale of some production assets in Western Canada and is considering a partial sale of some midstream assets in the Lloydminster region but not any downstream assets such as the Lloydminster upgrader.