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Husky currently has 44 MBOPD of thermal projections operating

Calgary based Husky Energy (ticker: HSE) announced today that production has started up at the company’s latest thermal project in Saskatchewan. First oil at the Rush Lake heavy oil thermal project was achieved eight weeks ago. The project is expected to produce 10 MBOPD by the end of the year, according to a company press release.

“Rush Lake joins an expanding lineup of thermal project that are providing solid returns even in a low oil price environment,” said Husky CEO Asim Ghosh. “Our proven thermal formula can deliver these projects with greater costs and execution certainty, rapid ramp ups and low sustaining costs.” Production at the Rush Lake project began two years after the project was sanctioned.

Continuing to add to Husky’s capacity

Husky

Husky Pikes Peak South Thermal Source: Husky

Current production capacity from all of Husky’s thermal projects is approximately 44 MBOPD. Including Rush Lake, HSE plans to add another 34.5 MBOPD of production from steam projects in the next 18 months.

Additional thermal projects in the Lloydminster region, like the Rush Lake project, are currently being evaluated by the company, with three near-term projects under consideration: the 10 MBOPD Edam East project, expected to start in Q3’ 16; the 4.5 MBOPD Edam West, set to start production in Q4’16; and the 10 MBOPD Vawn project set to come onstream in Q4’16.

“These smaller projects are better suited to the Lloydminster region,” a spokesman from Husky explained. “The key difference with our Lloydminster region thermals is they are more bite-sized than the oil sands projects and the oil being produced is lighter than the bitumen in the Fort McMurray region.”

The Rush Lake project uses a steam assisted gravity drainage (SAGD) production process, very similar to the thermal projects in the oil sands. The project will feed directly into the Lloydminster complex where Husky has an oil upgrader, an asphalt refinery and pipeline connections to the Hardisty hub.


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