CALGARY - Husky Energy (TSX:HSE) is recognizing the impaired value of its assets, resulting in a $4.1-billion net loss in the third quarter and prompting it to consider further actions to help it ride out the oil and gas industry's current downturn.
The Calgary-based company says most of the loss, which was equal to $4.19 per common share, is due to non-cash items that reflect Husky's reduced outlook for longer term oil and gas prices.
Adjusting to exclude $3.8 billion of impairments and a $167 million writedown, Husky's loss for the third quarter was $101 million.
Husky says it's prepared to make additional workforce adjustments if necessary, in addition to 1,400 positions eliminated by the end of the third quarter.
It has also decided to make its January 2016 dividend payment in common shares rather than cash. The dividend rate will continue to be 30 cents per share.
It's also considering the sale of some of its oil and gas properties in Western Canada - but not its heavy oil or oilsands assets.
“It is evident that the global oil dynamic has experienced a fundamental shift, driven by the resilience in supply,” Husky CEO Asim Ghosh said in a statement. “We are fortifying the business for today and for the long term.”
Husky is an integrated oil and gas producer with refinery and retail operations in North America as well as exploration and production in Asia.
A year ago, prior to the collapse of oil and gas prices that began in November, Husky had third quarter net income of $571 million or 52 cents per share on a diluted basis and adjusted earnings of $572 million.
In the second quarter of 2015, ended June 30, Husky had $120 million of net income, or 10 cents per share, and $124 million of adjusted earnings.
Ghosh said Husky took strategic decisions in 2010 that has withstood the test of the lower prices and will come out of the market downturn that's able to grow profitably at West Texas Intermediate crude averaging at US$40 a barrel and a benchmark gas priced at C$3 per thousand cubic feet over the next two years.
In Canada, it's active off Newfoundland's coast, has major production and processing operations in Western Canada and operates gasoline stations.
SAN RAMON, Calif. - Chevron Corp. is cutting up to 7,000 jobs, or 11 per cent of its work force, as it deals with lower oil prices that are cutting deeply into profit.
The company said Friday that it would cut capital and exploratory spending next year by one-fourth, with further cuts in 2017 and 2018 depending on the oil industry's condition then.
“With the lower investment, we anticipate reducing our employee workforce by 6-7,000,” Chairman and CEO John Watson said in a statement. Chevron has 64,700 employees, according to a spokesman.
With lower prices for the oil and natural gas that it produces, Watson said the company was “focused on improving results by changing outcomes within our control.” He said operating and administrative costs were 7 per cent lower than last year, and further reductions are likely.
Watson said the company has raised $11 billion by selling assets in the last two years, and it could generate another $5 billion to $10 billion in sell-off gains by the end of 2017.
Cheaper energy prices were key to 64 per cent drop in third-quarter profit at Chevron, the nation's second-biggest oil company behind Exxon Mobil. Oil prices have fallen from over $100 in June 2014 to under $50 this month.
Chevron said that third-quarter earnings plunged to $2.04 billion, or $1.09 per share, down from $5.6 billion, or $2.95 per share, a year ago. The latest results still beat Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for 79 cents per share.
Revenue fell 37 per cent to $34.32 billion despite an uptick in production. Five analysts surveyed by FactSet expected $27.70 billion.
In morning trading, shares of San Ramon, California-based Chevron were up 15 cents to $90.04. They began the day down 20 per cent since the beginning of 2015, while the Standard & Poor's 500 index rose 1.5 per cent.
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CALGARY - Imperial Oil says its profit for the third quarter fell to $479 million, down 49 per cent from last year as a result of the drop in global crude oil prices.
The Calgary-based company says its net income for the three months ended Sept. 30 was 56 cents per share, down from $1.10 or $936 million in the third quarter of 2014.
Offsetting the price declines was a 26 per cent increase in production volumes, which averaged the equivalent of 385,000 barrels per day in the third quarter - the highest in more than a decade.
Imperial also says its capital and exploration spending was reduced to $1.142 million, down $292 million from a year before.
The company's upstream arm, which includes exploration and production, recorded a $52 million net loss - a decline from the $532 million in profits recorded a year earlier.
Imperial's downstream arm had $454 million in net income, up $111 million from a year earlier, mainly because of the favourable impact of a weaker Canadian dollar.
The chemical business had a record high quarterly profit of $78 million, up from $66 million a year earlier.