Husky Energy keeps head above water amid low oil prices

Setting a slightly better tone for Q2 oil patch earnings season, Husky Energy reported a second-quarter profit
of $120 million, down 81 per cent from the same quarter a year earlier.

Husky was helped by better results from its refining operations, which contributed $350 million to cash flow in the quarter. It was hurt by lower crude prices and higher taxes.

The corporate tax rate increased from 10 per cent to 12 per cent as of July 1st. Even though the tax increase didn't take effect until the third quarter of the year, Husky wrote off $157 million in Q2 to account for higher taxes in the coming years. 

Husky's production edged higher in the quarter to 337,000 barrels of oil equivalent per day compared with 334,000 boepd a year ago. In its outlook, Husky said it expects approximately 85,000 barrels per day of new production to come online by the end of next year.

Asim Ghosh, Husky's chief executive officer, said the the price environment remains negative.

"It's becoming clear that we have a persistent supply demand imbalance in the oil market. I'm a member of the LL camp, the lower for longer camp." 

Husky is one of three integrated energy companies reporting earnings this week, meaning it produces the oil, refines it and sells it in retail operations. Suncor will report Wednesday and Imperial Oil on Friday. They all have a buffer from those refining operations, which are enjoying good margins over the spring and summer driving seasons.

Husky's shares are higher by 5 per cent in mid-afternoon trading on the TSX.