Husky Energy reported several cornerstone strategic initiatives intended to accelerate near-term production and reserve growth and to secure its medium and long-term growth opportunities. At the same time, the Company announced key elements of its financing plan, which is directed towards retaining its investment grade financial profile.

'The initiatives announced today represent the culmination of significant effort and focus to bring forward major projects that will create sustainable shareholder value over the near, mid and long term,' said CEO Asim Ghosh. 'Together, they are a statement of confidence in our business and in the tremendous growth opportunities in our portfolio.'

Strategic Steps for Near-Term Production and Reserve Growth • Western Canada Oil & Natural Gas Asset Acquisition - Furthering its strategy to boost near-term production, Husky has signed an $860 million purchase and sale agreement with ExxonMobil Canada Ltd. to acquire oil and natural gas properties in Alberta and northeast British Columbia. Recent acquisitions will add approximately 33,000 barrels of oil equivalent (boe) per day of production. • 2011 Capital Expenditure and Production Guidance - A $4.86 billion capital expenditure program, including the asset acquisition, has been approved for 2011. This represents an increase of over 20 percent from the 2010 capital expenditure program and will enable the Company to continue its strategy of accelerating near-term production, while providing the funding necessary to advance mid and long-term growth projects. Production guidance achieves the three to five percent annual growth target.

Strategic Steps for Medium-Term Production and Reserve Growth • Sunrise Energy Project Sanction - Phase I of the Sunrise Energy Project in northern Alberta has been sanctioned for development. Sunrise is a premier in-situ oil sands project that will serve as a key pillar of Husky's growth and is an important step in unlocking the full potential of the Company's extensive oil sands portfolio. Contracts for transportation, engineering and construction, valued at approximately $2 billion, will be awarded soon. • South East Asia Asset Retention - Husky will retain its South East Asia assets and is moving forward with its significant growth opportunities in the region. The finalization of a joint-venture development agreement with China National Offshore Oil Corporation (CNOOC) is at an advanced stage and the overall plan of development for the Liwan 3-1 natural gas project is expected to be submitted in early 2011.

Financing Initiatives • Financing - To support its strategic growth initiatives, Husky announces its intent to proceed with a $1 billion equity issue by way of a public common share offering and a private placement to its principal shareholders for their pro rata share of the $1 billion. Further, the Company is taking steps to establish a mechanism to allow common shareholders to choose to receive dividends in cash or shares. Husky's principal shareholders have agreed to take their dividends as shares from Q1, 2011 to the end of 2012, as may be required to provide equity support to retain the investment grade financial profile.

Steps for Near-Term Production and Reserve Growth

Western Canada Asset Purchase Husky has signed a purchase and sale agreement with ExxonMobil Canada Ltd. to acquire oil and natural gas properties in Alberta and northeast British Columbia. The $860 million acquisition will add 21,900 boe per day of production and 113 million boe of proved and probable reserves, based on Husky's reserves estimate.

The ExxonMobil purchase includes 16,300 boe per day of natural gas production, 4,800 barrels per day of oil production and 800 barrels per day of natural gas liquids. Husky's reserve estimate is 104 million barrels of proven oil equivalent and nine million boe of probable reserves, based on an effective date of December 1, 2010. This agreement is subject to regulatory approvals and final closing.

'The properties have very attractive metrics, reflecting our commitment to financial discipline,' said Ghosh. 'They are located in core operating areas where we will be able to leverage our existing infrastructure to create additional shareholder value.'

The purchase of natural gas properties in west central Alberta, announced in September, has now received regulatory approval. The acquisition adds 10,800 boe per day in a core producing area.

These acquisitions will significantly increase Husky's near-term production, adding approximately 33,000 boe per day.

Tags: Husky Energy Inc.