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

RUMOR Please dont READ

[PiscesRising]

Newfoundland abuzz with discovery rumor With Newfoundland’s White Rose oil field now in commercial production, interest is shifting to unconfirmed reports that the offshore region may have a new discovery of 200 million to 350 million barrels and to the chances of a fourth project. Unnamed sources, quoted in the National Post, the Hibernia consortium and Newfoundland Natural Resources Minister Ed Byrne have all contributed to speculation that a new reservoir has been found south of the Hibernia field. Three months ago, Newfoundland Premier Danny Williams was reported in Newfoundland media saying he’s heard there was a new pool discovery. But Hibernia operator ExxonMobil was less than thrilled with this flurry of rumors, expressing dismay that reports were appearing while well data was still being compiled. Jim Wright, a professor of earth sciences at Newfoundland’s Memorial University, said a new reservoir of even 200 million barrels would boost Hibernia’s reserves by more than 20 percent and match the White Rose reserves. If Hibernia — currently producing at more than 200,000 barrels per day — can push its recoverable reserves beyond 1 billion barrels the field would enter the same offshore league as Angola, Brazil and the North Sea, he said. A Hibernia spokeswoman confirmed there have been “positive drilling results” in the southern reservoir and drilling is under way to get a better fix on “what this means … (but) we’ve been saying since June that it’s too early to speculate.” Confirmation of a find requires the Hibernia consortium — which also includes Chevron, Petro-Canada, Murphy Oil, Norsk Hydro and the Government of Canada — to file a development application with the Canada-Newfoundland Offshore Petroleum Board. Next in the project line-up is the Hebron Ben Nevis field, with up to 700 million barrels of recoverable reserves (75 percent classified as heavy oil). Chevron, with ExxonMobil, Petro-Canada and Norsk as partners, reactivated the plans in April after taking a more optimistic view about the long-term future of oil prices and the project costs. The partnership hopes to start regulatory reviews in 2006, but needs assurances that the Newfoundland government does not intend to raise royalties as part of a new energy policy. Williams made the industry nervous earlier this year when he said the province’s resources were being given away for a “pittance,” while oil companies were filling their coffers.