Husky secures Grand Banks for White Rose

Husky Energy has secured Transocean's semisubmersible Grand Banks for ongoing operations in the White Rose area and for continued exploration and delineation drilling.

Offshore staff

NEWFOUNDLAND AND LABRADOR -- Husky Energy has secured Transocean's semisubmersible Grand Banks for ongoing operations in the White Rose area and for continued exploration and delineation drilling. The three-year agreement is valued at approximately $380 million and has provisions for two additional one-year contract extensions.

"Offshore drilling rigs, capable of operating off the East Coast of Canada, continue to be in high demand worldwide," says Mr. John C.S. Lau, president and CEO of Husky Energy. "TheGrand Banks has drilled 18 development wells for the White Rose project and has been drilling in offshore Newfoundland and Labrador since 2002. To move forward with the next phase of White Rose development, Husky is pleased to secure this semisubmersible drilling unit to progress a series of subsea tieback developments."

In other vessels news, Husky has decided to advance the planned maintenance turnaround for the White Rose production vessel, FPSOSeaRose, from the original plan in August 2008 to 1Q 2008. Weather permitting, the vessel will shut-in production on January 23, for approximately two weeks. The turnaround has also been brought forward to address sediment buildup in the low pressure separator, which is curtailing production to approximately 90,000 to 95,000 b/d of oil. Combining the planned turnaround with the cleaning of the low pressure separator, Husky expects that there will be minimal impact on the estimated annual production from White Rose.

According to Husky, the successful exploration and delineation program around the White Rose field has led to the identification of a number of potential satellite tieback developments. The first of these to be developed will be North Amethyst.

Husky completed front end engineering and a glory hole in 2007 to accommodate the subsea facilities for North Amethyst. A development plan was submitted and is presently under review by the Canada-Newfoundland and Labrador Offshore Petroleum Board. Pending government and regulatory approvals, the company plans to begin North Amethyst development drilling in mid-2008.

Regulatory approval was obtained for development of the South White Rose extension in September 2007. Husky is currently evaluating the results of delineation drilling conducted in 2007 for West White Rose prior to submitting a development application for the project.

Husky is also proceeding with a seismic acquisition program offshore Eastern Canada. It includes the acquisition of 2,500 sq km (965 sq mi) of 3D seismic over the White Rose field, the satellite development areas, and portions of five exploration licenses in the Jeanne D'Arc basin. Two of the exploration licenses are operated by StatoilHydro with Husky having a 50% interest.

01/21/2008

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