Husky maintains financial discipline, with a focus on generating free cash flow to invest in low-cost growth opportunities and returning cash to shareholders. Our stability and long-term profitability allows us to contribute to the economies of the communities where we operate through jobs, supply contracts, taxes and royalties, and community investments.
Husky employs more than 5,100 people in Canada, the United States and the Asia Pacific region.
Our Integrated Corridor includes thermal production from Lloyd thermal projects, the Tucker Thermal Project and the Sunrise Energy Project, as well as natural gas and associated liquids. This production is integrated with the Downstream business, including the Lloydminster upgrading and refining complex, the Husky Midstream Limited Partnership (of which Husky owns 35 percent and is the operator), and the Lima, Superior and Toledo refineries in the U.S. Midwest.
Offshore production includes operations and exploration in the Asia Pacific region, primarily offshore China and Indonesia, and in the Atlantic region offshore Newfoundland and Labrador.
Contributing to the Economy
Husky delivers essential energy products to the world in a safe and responsible manner, with a focus on financial discipline that generates free cash flow to invest in low-cost growth opportunities, which create jobs and associated activity across the economy, and provides a return to our shareholders.
In 2017 funds from operations were $3.3 billion, up 50 percent from the year before, and we generated free cash flow for the year of $1.1 billion, up 120 percent from 2016. We spent more than $2 billion on capital projects, significantly benefitting the communities where we operate. We established a quarterly cash dividend of $0.075 for the fourth quarter of 2017, delivering on our commitment to return money to shareholders as commodity prices stabilized and free cash flow permitted. Our operating expenses in those communities, including services, materials and equipment, utilities and transportation, were $2.7 billion.
Our integrated business enables us to employ more than 5,100 people in Canada, the United States and the Asia Pacific region, and to contribute strongly to the economies and the communities where we operate.
In addition to providing long-term, well-paid jobs where we operate, these contributions include:
- Employing full-time personnel and contractors, and purchasing goods and services from local businesses, including Indigenous vendors.
- Paying royalties and taxes to municipal, provincial, state and federal governments.
- Paying access fees, taxes and other appropriate payments to Indigenous governments.
- Contributing to community and not-for-profit organizations.
- Paying dividends to our shareholders.
As Husky assesses current and future oil and gas market scenarios, including International Energy Agency reports and data, we believe our strong balance sheet, low cost structure, downstream integration and market diversification position us to compete in a low commodity price environment, and largely eliminates our exposure to WCS discounts resulting from Western Canadian market egress constraints.
Innovation & Advanced Technology
Husky‘s investments in innovation and technology reduce costs, increase resource recovery and improve our environmental performance. We focus on developing and implementing technology that offers the highest potential value for our business, while also learning from our peers from across the energy industry. Husky‘s critical competency networks connect people across business units, exposing them to different technologies we‘re using or evaluating and to encourage innovation in areas such as carbon capture, water management, reservoir recovery, geoscience integration and business analytics.
Recent innovations include a pilot at the Sunrise Energy Project that will use technology to reduce the amount of diluent required to transport bitumen, which in turn frees up pipeline capacity. The technology is expected to reduce CO2 emissions and increase the quality and value of recovered bitumen.
We continue to test and evaluate new CO2 capture technologies at our Pikes Peak South thermal project, while using the CO2 captured at our Lloydminster Ethanol Plant to produce heavy oil.