Husky Energy Inc. cumulative redeemable preferred T.HSE.PR.B

WTF?

[autofocus111]

HSE ordered to shut down production off the east coast now because of a failure to follow iceberg saftey rules almost a year ago.

CALGARY, Alberta (Reuters) - Canadian regulators on Wednesday ordered Husky Energy (HSE.TO) to suspend operations on its 27,000-barrel-per-day SeaRose floating production vessel off the coast of eastern Canada after an iceberg came too close to the facility in March 2017.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) made its decision after an investigation found Husky did not follow its own Ice Management Plan when an iceberg came within 0.25 nautical miles of the floating production, storage and offloading (FPSO) vessel.

https://www.reuters.com/article/us-canada-husky-energy-iceberg/husky-ordered-to-halt-atlantic-canada-operations-after-iceberg-close-call-idUSKBN1F631H

[autofocus111]

That's ~15% of their total oil production offline, and premium light oil to boot. They better get this sorted out pronto.

[autofocus111]

Coulda shoulda didn't. Unreal. They already took some of the necessary steps to regain compliance, but I find it hard to believe hey couldn't have worked with regulators to resolve all requirements and completely avoid any suspension of operations leading up to this winter/spring. Unreal. >>>“We could have and should have responded differently according to the pre-existing plan,

[XperiaTee]

from my understanding this is more like 8% of production isnt it? where did you see the 15%, just curious.

[SQCConsulting]

It is only 8%....... Unbelievable...just when there was light at the tunnel. Typical

[Dogsbreakfast4U]

The fact that management did not deem necessary to inform minority shareholders that this incident was under investigation by an outside regulatory body since May 7 is what is most troubling. Perhaps they thought this was not significant enough or perhaps they just didn't care or both! What else are they not telling us?

[Dogsbreakfast4U]

Raymond James cuts Canadian oil and gas producer to "market perform" after regulators order co to suspend ops at SeaRose vessel ** Brokerage gave its highest rating in mid-December ** HSE says to suspend ops of its 27,000 bpd floating production, storage and offloading vessel after an iceberg came too close to facility last year ** Prolonged suspension could cut HSE 2018 free cash

[Scottie99]

This post has been removed in accordance with Community Policy

[autofocus111]

Oops. Yeah you're right. I was looking at Antlantic 35 vs Total 245. Still, a healthy chunk of production and premium light grade not the tar goop. https://huskyenergy.com/news/release.asp?release_id=2198454

[SQCConsulting]

Leverage to postpone re-instatement of the dividend. Not sure its coincidental

[autofocus111]

Only if the shutdown is expected to drag on. I suspect this matter will be rectified quickly since NL is missing out on royalties for their coffers. If anything, given the active incident history, I think this was meant as a shot across the bow to HSE telling management to focus on their safety plans since another major accident like Ocean Ranger is simply not acceptable with the modern techology

[SQCConsulting]

It just seems like an exceptionally punitive measure that it begs more questions as to why they had to go this far. It must be because they failed to listen to them in taking appropriate planning steps immediately after the incident despite several warnings. Not exactly gold star management here.

[SQCConsulting]

UPDATE: Seems directly related to a decision to brace for impact instead of disconnecting and going clear of the berg. Takes a couple of months to re-set the operation if they disconnect and steer clear....so they gambled lives for $. This seems to be the issue. Board had no confidence in their operational decision-making. Hard to argue the contrary.

[pablo87]

It all goes back to governance. The entire board is controlled by LKS and there is NO oil & gas knowhow on it other than the CEO and former CEO.

[pablo87]

I should add, another lack of regulation by the government as to governance. They thought it was ok for the 30% Canadian shareholders not to be represented but now they are putting the Canadian environment at risk as well.

[Olympic]

I have not read the actual CNLOPB order, however, the reported reason for suspension is a loss of confidence. This all smells political ... no tribunal decision can set an arbitrary standard as 'confince me' that would survive judicial review.  As for politics ... CBC is reporting that HSE brass met with regulators yesterday and again today.   I suspect an annoucement is not far

[Olympic]

The CNLOPB Chair and CEO doing a media blitz to justify his position is concerning.  What judge, justice, or tribunal member goes around in the media after rendering a decision to justify it?   Does anyone know the regulations or HSE's protocols ... is this an issue of a rogue manager or of inadquate protocols?  What discrection is awarded the manager?  It is a bit rich to

[SQCConsulting]

Seems arbitrary but that is the point, they believe it was a cost saving decision over lives. They had to know it was within the disconnect range otherwise it pointless. Peabody also admitted it was the wrong decision.

[mrbb]

it's a political statement and grand standing to show who's the boss by the regulator. It seem husky made the correct technical call but a wrong political call because husky did not follow the regulation to shut down even husky saw low to no chance of iceberg hitting the platform. It's like yielding and proceeding on a red stop sign instead of coming to a full stop. No one was killed

[SQCConsulting]

So why did Peabody admit fault and acquiesce to everything....?

[Scottie99]

This post has been removed in accordance with Community Policy

[mrbb]

i may make occasionally grammar error but you scottie has permanent mental retardation. I didn't say husky didn't error in political judgement, i said husky deserve a fine, not driving suspension.  In what jurisdication where 1 get driving rights suspended for running red light or stop sign but did not caused any accidents or damages?  I'm

[mrbb]

hey chicken sh!t, you too scared to reply to me directly? you put me on ignore but like to reply on my post to your posse, you chicken sh!t

[mrbb]

So you are husky basher hyppcrite who continue want to own husky stock but hated the company.   Stupid do what stupid does.

[SQCConsulting]

I am not dissing anyone here...I am just saying that they could not have ordered this without there being a clear violation of the safety protocol. Seems they were doing everything right but failed to disconnect despite the berg being within the established disconnect distance. Its not guess work, its calculated. If this was not the case then Peabody would not have said what he said and the

[autofocus111]

You are absolutely correct. HSE failed to follow their own safety protocol, and now they will likely have to pay a fat fine and will surely face increased scrutiny in their operations going forward.

[mrbb]

although i don't know all the detail exactly, i think it's odd the regulator impose a production shut down order some 10 months later of the suppose infraction which caused no injuries, no environmental nor facilities damage. A monetary fine is more appropriate IMO.    "The C-NLOPB said SeaRose operations will remain suspended until it is confident Husky has

[Olympic]

Some encouraging news reported on Friday ... I can imagine the priority this recieved over the weekend and what further advancement was made in the past 36 hours. (1) "... CNLOPB chair and chief executive officer Scott Tessier says the board is “fairly encouraged” by the company’s response. “It’s still a work in progress, but they’re saying all the right things so far,” Tessier told

[Olympic]

SeaRose resumes production. https://www.cbc.ca/news/canada/newfoundland-labrador/husky-searose-suspension-withdrawn-1.4506408 

[mrbb]

No mention of pending monetary penalty.  Cross our fingers. Hope this is a good lesson for husky with minimal damage.

[SQCConsulting]

Precisely, they lack confidence in management because they were monitoring the ice berg and decided not to disengage and steer clear despite it being within an evacuate range. They even decided to call out "brace for impact" in case it hit. This is what they are questioning...the decision not to disengage and steer clear.

[Dogsbreakfast4U]

Leverage to keep the dividend low. Not a coincidence.