Husky Energy signs gas agreement for Madura BD

Husky Energy Inc. subsidiary Husky Oil (Madura) Ltd. has signed a heads of agreement (HoA) with three companies for gas sales from the Madura BD field offshore Indonesia.

Offshore staff

CALGARY, Alberta -- Husky Energy Inc. subsidiary Husky Oil (Madura) Ltd. has signed a heads of agreement (HoA) with three companies for gas sales from the Madura BD field offshore Indonesia. The companies include PT Parna Raya, PT Inti Alasindo Energy, and PT Perusahaan Gas Negara Tbk (PGN).

The HoA forms the basis of terms for the gas sales agreement (GSA) being finalized by Husky. Husky also is negotiating an extension to the Madura Strait production-sharing contract with the government of Indonesia.

The Madura BD field offshore East Java contains an estimated 515 bcf of natural gas and 23 MMbbl of condensate. Husky says when development is completed, production will reach an estimated 100 MMcf/d of sales gas and 6,500 b/d of condensate.

The natural gas will be processed through a floating production unit and will flow via a 60-km (37-mi) pipeline for delivery onshore East Java. The gas ultimately will be sold to industrial customers in East Java. Condensate will be shipped to markets in southeast Asia by shuttle tanker.

Husky Oil (Madura) Ltd. operates the Madura Strait production-sharing contract and holds 100% working interest in the project.

8/8/2007

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