Husky Cuts 370 Jobs, Lowers Capital Spending By $500M

Calgary-based Husky Energy (TSX:HSE) has cut 370 jobs as the energy company trims its capital spending for 2020 and 2021 by $500 million.

The job and capital spending cuts are due to changing market conditions, the company said in a written statement. Most of the job cuts at Husky Energy came during a major round of layoffs in October. The job cuts have been made to better align the company’s workforce with lower capital spending plans moving forward.

Husky Energy’s budget for 2020 is to fall by about $100 million to between $3.2 billion and $3.4 billion, while the following year it will drop by an additional $400 million, according to the company. The savings will mainly come from lower spending on cold flow heavy oil projects in Western Canada, but production will increase by about 4% thanks to the start-up of two thermal heavy oil projects near Lloydminster, Saskatchewan that use steam to aid flow from wells.

Average upstream production is expected to be in the range of 295,000 to 310,000 barrels of oil equivalent per day for 2020. That includes about 5,000 barrels of oil per day in the first half of next year expected to be interrupted by the Alberta government's oil curtailment program and planned maintenance activities.

Husky Energy’s capital spending for 2020 will focus on thermal projects, its Liuhua 29-1 offshore natural gas project in China and construction of the West White Rose Project in the Atlantic region. Production is expected to rise about 10% in 2021 as new projects come on stream.

Husky shares began Tuesday down six cents to $9.52