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

CK discussion on HSE

[onec007]

Think this will shed a lot of light into Husky. Not sure if anyone ever goes on CK Hutchison's earnings discussion but since they pretty much own husky it definitely makes sense for them to discuss HSE's impact on their holding company. Do a find to read HSE related comments https://seekingalpha.com/amp/article/4333285-ck-hutchison-holdings-ltd-ckhuy-q4-2019-results-earnings-call-transcript

[oilandgasmick]

Thanks 007: So if I read that transcript correctly, even with the revised CAPEX of 1.8 Billion, if the WTI price stays around 25 bucks then HSE will have a negative cash flow of 1.0 Billion? Would that negative cash flow of 1.0 B include the dividend payments? If so then you would have to say that there is zero chance of them paying any dividends this year because that negative cash flow of 1.0

[onec007]

I'm trying to understand where the 1.8 billion capex is coming from I thought the revision is 2.4-2.5? Dividend needs to be cut. I think there will be another wave of layoffs coming. The lower for longer thesis looks like it will be staying for much longer than anticipated. Basically I agree most producers will be toast in this price environment especially if this lingers for over a year. SU

[oilandgasmick]

I'm sure MRBB will weigh in on the 1.8 B revised capital number. Yes, my list of survivors and probable survivors is exactly the same as yours. CNQ is carrying 20B in debt so to me they are the least likely on your list to survive and with almost 7B in debt CVE isn't much better. If SU goes under then its truly the end of the Canadian oil industry. SU probably makes more on the

[mrbb]

sorry mick, i have no info relating to the 1.8b  revised capital number but pablo's comment about keeping capex on the downstream and WRR make sense.   These are big scale projects would incur extra cost if to stop halfway and then to restart it back up to later.  Also these 2 pillars are less riskier in term or oil price swing (like downstream) and no pipeline bottleneck and

[pablo87]

Upstream ( which is mostly offshore). Refining budget hasn't changed.

[SQCConsulting]

So what is the potential; difficulty in surviuval based on the press release Total liquidity is $4.9 billion, comprised of $1.4 billion in cash and $3.5 billion in unused credit facilities. In line with its committed credit facilities, Husky is required to maintain debt to capital of no more than 65%, and is well below this threshold with a ratio of 27% with no long-term debt maturities until

[onec007]

We are also assuming that there will be no end to the low oil prices. Eventually the low pricing will ease just like the coronavirus. I know it is DIFFICULT to see pass the headlines. I am definitely concerned and sad that so many businesses are closed and life is on hold which is impacting so many lives financially. The quicker we resolve this the sooner our lives will normalize but even then

[autofocus111]

oncec007 See slide 11 for planned FFO and spending breakdown. Now from slide 19 you see their price assumptions and sensitivities. Inputting $25 WTI (vs 55), FX of 0.70 (vs 75), and 321Crack of $14 (vs 18), then using FFO from slide 11 at assumed prices of ~3.8B, the resulting new FFO comes in at New FFO = 3.8 (planned FFO) - 3.0B (WTI) + 0.5B (FX) - 0.5 (321) = +0.8B. Assuming they cancel all

[onec007]

Assuming that WTI stays around $25 which is possible given April will and beyond will be nasty once SA, UAE and Russia increase production. Your FFO numbers look pretty accurate except I think you've missed out on couple of things regarding how much they will be in the hole. Correct me if I'm wrong but their proposed growth capex is about $500 mil and by reducing dividend of $500 mil will

[pablo87]

Other than the heavy oil business (3rd supply shock in 4-5 years) which I assume they will shut in if prices stay too low, and refining demand that will impact profitability until stocks rebalance, the rest should be profitable. Just spending too much on capex this year but at least spending where they make money. I'm starting to question the value of the integrated corridor esp that husky

[BramptonBradley]

West Rose is shutting down. How will that change your outlook?

[RagingBull3]

Ya, it would be prudent to cut the dividend.    Demand destrucion in oil is very real.   It's going be a while before oil bounces back.... not like all the other times oil went down and then right back up.      

[RagingBull3]

Thanks Onec007.