The Tucker project came in at $470-million — under its $500-million budget — with first oil expected to begin next month.
“We have a very good execution team,” Mr. Lau told investment analysts in a conference call late Friday following release of Husky's third quarter results.
“This is due to our project planning and a full understanding of the economics of these oil sands,” he said, adding that negotiating a fixed cost for the central facility was key.
We are also very close to our upgrader. We've built this project with a lot of certainty.”
Tucker, located 30 kilometres northwest of Cold Lake in northern Alberta, is expected to reach peak production of 30,000 barrels a day within 18 to 24 months.
On Thursday, the Calgary-based company reported third quarter profit of $682-million: a 23 per cent jump driven partly by increased output at the White Rose offshore project off the coast of Newfoundland and Labrador.
Husky has a 72 per cent stake in White Rose, which began producing oil in late 2005. That added 75,000 barrels a day to Husky during the recent quarter.
“White Rose recently demonstrated it can handle 125,000 boe/d,” said Andrew Potter of UBS Investment Research.
Husky's next move in the oil sands is the much larger Sunrise project, near Athabasca, Alta.
Engineering work on that development, which has a potential 200,000 barrels a day, is expected to be complete by the third quarter of 2007.
“The company continues to re-evaluate alternatives for the downstream portions of the project,” said Mr. Lau.
That drew kudos from the investment community.
“We believe Husky's downstream solution (for Sunrise) will offer robust economics versus the majority of Alberta oilsands projects,” said Mr. Potter in a research note.
“We are impressed with Husky's recent exploration successes and long term project slate, particularly in the oilsands,” said Andrew Fairbanks of Merrill Lynch.
The Calgary-based company said late Thursday its latest quarterly earnings amounted to $1.61 per diluted share for the period ended Sept. 30. That compared with profit of $556-million or $1.31 per share in the same period last year.
The results easily surpassed analyst expectations of $1.53 share, according to a survey by Thomson Financial.
Controlled by Hong Kong billionaire Li Ka-shing, Husky Energy is one of Canada's major integrated oil companies.
It has oil and natural gas production, a refining network and a string of gasoline stations, primarily in Western Canada. The company also operates off the East Coast and in the Far East.
Sales and operating revenues in the third quarter, net of royalties, rose to $3.4-billion from year-ago $2.6-billion.
Meanwhile, production in the third quarter rose 20 per cent to 364,700 barrels of oil equivalent output a day, compared with 303,200 barrels in the third quarter of 2005.
Total crude oil and natural gas liquids production rose to 253,200 barrels a day from 190,000 barrels last year.
Husky's shares lost 10 cents Friday to close at $68.01 on the Toronto Stock Exchange.
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