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

The positive outlook

[SailorSailor]

TORONTO (Standard & Poor's) May 17, 2002--Standard & Poor's today said it revised its outlook on Husky Energy Inc. to positive from stable. At the same time, the existing triple-'B' corporate credit and senior unsecured debt ratings, and double-'B'-plus preferred securities rating on the Calgary, Alta.- based company were affirmed. "The positive outlook reflects Husky's improved business profile and financial position following the acquisition and integration of the Renaissance assets, and Standard & Poor's expectation of the company's continued growth in the medium to long term. Should Husky achieve its stated growth targets, without a material deterioration to its existing financial profile, a rating upgrade is possible," said Standard & Poor's credit analyst Michelle Dathorne. " Alternatively, if Husky's financial measures deteriorate markedly from their year-end 2001 levels, as the company pursues its growth strategy, a negative rating action could occur," Ms. Dathorne added. Husky benefits from a significant number of low-risk reserve opportunities in its core Western Canadian crude oil properties and good medium-term prospects from its interests in offshore fields on Canada's east coast. These opportunities are expected to result in steady growth in production and reserves between 2002 and 2004. In addition, Husky's conservative financial risk profile is characterized by moderate debt leverage and its improved ability to generate the cash flow necessary to fund both its maintenance and expansionary capital expenditure requirements. Should hydrocarbon prices remain strong between 2002 and 2004, Standard & Poor's expects Husky will generate sufficient cash flow to fund its forecasted capital spending.