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Husky Energy Provide Sunrise Oil Sands Project Update

Husky Energy Husky Energy Inc. is pleased to announce that it has completed front end engineering and design (FEED) for Phase 1 of the Sunrise Oil Sands Project and has obtained necessary approvals from the Government of Alberta, Environment Department and the Energy Resources and Conservation Board (ERCB) to proceed with the project.

"Overall, the cost estimate for Phase 1 has been reduced by more than $1 billion through design optimization," said John C.S. Lau, President & Chief Executive Officer of Husky. "Under the current market environment and the applied facility design for Phase 1, the Sunrise Oil Sands Project has been able to achieve a solid sustainable economic return."

With the FEED work complete and regulatory approval for the amended design in place, Husky is preparing to issue requests for proposals (RFP) for the central plant and field facilities. The first five well pads are being built and site preparation work for the central facilities will be finalized this year. Pending project sanction by Husky and its partner BP, the detailed engineering, procurement, and construction phase of the project is scheduled to begin in the second half of 2010, with Phase 1 production anticipated in 2014.

The Sunrise Oil Sands Project, located 60 km northeast of Fort McMurray, will use Steam Assisted Gravity Drainage (SAGD) technology. Husky estimates that Sunrise contains 3.7 billion barrels of proved, probable plus possible reserves (0.13 billion barrels proved, 1.9 billion barrels probable and 1.7 billion barrels possible, of which Husky has a 50 percent working interest ), as of December 31, 2009. Capital cost for Phase I (60,000 barrels per day) is estimated at $2.5 billion, down from the earlier forecast of $3.8 billion to $4.0 billion under the original design plan. Under current regulatory approvals, production is expected to ramp up to 200,000 barrels per day once all phases have been built and are operational in the 2020 timeframe.

In 2008, Husky and BP formed two 50/50 partnerships, a Canadian oil sands partnership operated by Husky and a U.S. refining LLC operated by BP. The Sunrise Oil Sands Project, jointly owned by Husky and BP, is combining the production of bitumen with existing refining. The integrated project solution is considered to be most cost efficient and represents a responsible approach to resource development and environmental stewardship.

Husky Energy is an integrated energy and energy-related company headquartered in Calgary, Alberta, Canada. Husky Energy is a publicly traded company listed on the Toronto Stock Exchange under the symbol HSE.

Published 20/01/2010

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