On the heels of its $860-million acquisition of properties from ExxonMobil Canada Ltd., Husky Energy Inc. signalled it is ready to raise $1-billion in equity to both fund the deal and add cash to its coffers to help plan for a comprehensive 2011 capital spending program.
About $700-million of the new financing will be sold via a private placement to the firm's largest shareholders, and the remaining $300-million will be sold to public investors. Husky said it still has not determined how the deal will be brought to market -- whether it will be a bought deal or marketed.
The announced plans for a $1-billion equity raise comes just a few days after Husky filed a new $3-billion base shelf prospectus that allows it to finance using both debt and equity.
On top of Monday's acquisition, Husky is looking to spend about $4.86-billion on capital next year, about a 20 per cent raise over the 2010 program. The new spending will target a few different areas, including plans to tie-in natural gas production if prices increase and construction of facilites for the Sunrise oil sands lease.
Husky also announced it is no longer considering spinning off its South East Asia assets, citing them as "a key pillar" in its growth strategy.
"The board of directors is of the view it is in the best interest of shareholders to continue to build a material business in the resource-rich region, which can leverage the close proximity to major energy markets in Hong Kong and Mainland China," the company said in a statement.
Following soft quarterly earnings this summer, Husky has been on a buying spree. Recent acquisitions will add about 33,000 barrels of oil equivalent per day of production.Report Typo/Error