Whitecap Resources strikes deal to buy Husky oil assets for $595 million

CALGARY – Husky Energy Inc. (TSX:HSE) has announced a deal to sell a portfolio of oil-producing assets in southwest Saskatchewan to Whitecap Resources Inc. (TSX:WCP) for $595 million in cash.

Calgary-based Husky has been selling non-core assets this year to reinforce its balance sheet in light of low commodity prices.

Last week Husky, known for heavy oil production in Western Canada, refineries and gas stations, as well as production in Asia and off the East Coast of Canada, announced the sale of oil and gas royalty interests to Freehold Royalties Ltd. for $163 million.

In April, it agreed to sell a 65 per cent ownership interest in pipeline and storage assets for $1.7 billion to units controlled by its largest shareholder, Hong Kong billionaire Li Ka-Shing.

Calgary-based Whitecap said it will fund the acquisition through existing credit and by issuing shares worth $470 million through a consortium of banks.

The assets being sold produce about 11,600 barrels of oil equivalent per day, almost all of it medium gravity oil, from an area about 15 kilometres west of Swift Current, Sask. Whitecap produced an average of 43,000 barrels of oil equivalent a day in the first quarter of 2016, about three-quarters oil and natural gas liquids.

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