Husky Energy Inc. is considering selling its network of gas stations in Canada and a small refinery in a cash-raising effort similar to that by some of its major integrated-oil-company rivals.
Husky said it is undertaking a strategic review of its 500 retail, card-lock and bulk-fuel outlets as well as its Prince George, B.C., refinery.
The review is unrelated to the company’s $3.3-billion unsolicited takeover bid for oil sands producer MEG Energy Corp., which is to expire next week. Husky, in a statement, did not give a timeline for the review or the amount it hoped to raise.
“We do expect the businesses to attract strong interest, but we aren’t specifying what our internal threshold for doing a deal would be,” Husky spokesman Mel Duvall said.
The company is considering jettisoning the assets, which extend to New Brunswick from B.C., so it can concentrate on its Alberta, Saskatchewan and U.S. production and refining businesses as well as exploration off Canada’s East Coast and in the South China Sea, it said. The refinery processes 12,000 barrels a day, making it one of Canada’s smallest.
Chevron Corp. and Imperial Oil Ltd. are among other integrated oil companies that have unloaded Canadian downstream assets in recent years.
In 2017, Parkland Fuel Corp. paid $1.5-billion for Chevron’s 129 gas stations and Burnaby, B.C., refinery. That followed Imperial’s sales of Esso-brand retail outlets to Alimentation Couche-Tard, 7-Eleven Canada, Parkland Fuel and others. The idea was to raise cash for the major oil companies’ other operations.
Husky has hired Toronto-Dominion Bank as financial adviser and Torys LLP as legal adviser in its strategic review.
Husky’s unsolicited cash-and-stock bid for MEG Energy expires Jan. 16. MEG has urged its shareholders to reject the offer, criticizing it as undervaluing the company and its prospects.
However, MEG has yet to convince a rival bidder to come forward with a richer offer, and there is no indication that Husky will put more money its overture. The company, majority owned by companies in the empire of Hong Kong billionaire Li Ka-shing, looks poised to win the takeover.
Indeed, Husky offer has allowed MEG’s shares to remain relatively strong while most Canadian energy stocks have fallen sharply in recent months, partly due to record discounts on Canadian heavy oil in October and November.