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

Some good stuff but a few concerns

[oilandgasmick]

The good things in the report are obvious, earnings have bounced back as we thought they would but a few concerns:

No dividend increase despite very solid cash flow numbers.

How did the net debt go up to 3.4B, almost .5B from its low?  Perhaps someone can offer some insight on this number.

[autofocus111]

I'm guessing the increase in net debt is related to this notes offering last month >>>The Calgary, Alberta-based oil and gas producer Husky Energy Inc. priced an offering of $750 million of senior unsecured notes due 2029, with proceeds to be used to pay offcertain outstanding debt securities maturing in 2019, among other general corporate purposes. The notes, which will carry an

[autofocus111]

Debt increased by $917M. Cash increased by $379M. So $538M went somewhere. I guess that's what you're really asking huh.

[oilandgasmick]

Well suffice to say that I can't seem to get a handle on these "net debt" numbers or how they got here and to me FCF and net debt are the key metrics that I look at. My concern is that the company is not living within its means and that is a concern. Someone on the board probably has the answer but I know that I don't.

[mrbb]

I see the new debt is just a bridge loan to help out the CF dip due to atlantic shut down and repairing superior. To me this borrowing is a good sign that husky has high ROR than the 4.4% loan rate of projects to fund. If creditors see them as junk bond, they would have demanded 7-10% ROR.

[oilandgasmick]

But the bridge loan we see here doesn't account for the fairly large increase in debt compared to last year. 3.4B versus 2.9B last year. Is that correct?

[autofocus111]

It would affect net debt, but only if they spent part/all of the proceeds on items other than reducing outstanding debt. And they did spend part... $538M.per the 'net debt' table included in the  earnings release.

[jwallingf]

oilandgasmick: The increase in net debt, as another poster has pointed out, was due to the US$750 million dollar note offering this March. Husky has to roll over about C$1.8 billion in expiring notes this year. They could pay off these notes with cash on hand of C$2.8 billion but I guess they have a better use for it.  There were so many good things in the latest results but investors just

[JTDOUBLE]

Initiating a position here.. Good Report .. Sectoral turn amid summer driving season.. Opec will not meet till June.. Iran sunctions. Venenzuela still a mess.. Civil war in Libya.. a really good ingridients for oil to Gap up!! If this company in states should be trading a lot higher..

[downwithdotcom1]

all good points but TRUMP opened his mouth berating OPEC on friday and will continue to do so as this sells just so well to his base electorate...dwdc

[jwallingf]

And OPEC will just ignore him, dwdc. They'll focus on keeping the price within the Brent $70-$80 range that meets their budget objectives. Judging from today's action, it looks like investors took another look at Husky's results and found more to like. Volume about 19% above the 3 month average.