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The Husky Energy tower in Calgary, Monday, Feb. 1, 2010.

Jeff McIntosh/THE CANADIAN PRESS

Husky Energy Inc. said Tuesday it's gearing up for a winter exploration program in a relatively new oil play in the Northwest Territories.

Planning is underway for continued evaluation of its Slater River project late this year and early next year, the Calgary-based company said as it released its second-quarter results.

"This is early days. We will have a better sense of this resource after we do our winter exploration plan this upcoming season," CEO Asim Ghosh said on a conference call.

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"It's a sequential process and results are being assessed, but there's much work still to do. In parallel we are continuing consultation with community and officials."

Husky is seeking regulatory approval to build an all-weather access road and other infrastructure in the remote region, as well as further evaluate two vertical wells it drilled last winter.

Also Tuesday, Husky said weaker commodity prices dragged down its second-quarter net earnings.

The Calgary-based firm reported profits of $431-million, or 43 cents per share, which was above expectations of 38 cents per share, according to a survey of analysts by Thomson Reuters.

A year ago, the company posted earnings of $669-million, or 71 cents per share.

Gross revenues declined to $5.63-billion from $6.04-billion in the comparable period. Analysts expected revenues of nearly $6.1-billion.

Production declined to 282,000 barrels of oil equivalent per day from 312,000 barrels.

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"It's been another steady-as-she-goes quarter. The results this quarter showed our continued focus on executing against all of the elements of our plan," Mr. Ghosh told the conference call.

Having refinery interests in the U.S. and Canada helped cushion Husky against swings in oil prices. While it makes less money producing the oil, it makes up for it with lower input costs at its refineries.

"Our focused integration strategy has once again proved its value in helping shield us from a volatile market and the high location discounts that we've been seeing in Canada," said Mr. Ghosh.

Husky, controlled by Hong Kong billionaire Li Ka-Shing, produces oil and gas in Western Canada, off Canada's east coast and in southeast Asia.

The first 60,000-barrel-per-day phase of its Sunrise oilsands project is under construction. The $2.5-billion project, part of a joint-venture with BP PLC, is slated to start up in 2014.

Work on its Liwan natural gas field in the South China Sea is also progressing, with a projected 2013 or 2014 startup.

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Husky had contemplated spinning off its southeast Asian properties into a new publicly traded company, but ultimately decided in late 2010 to keep the high-growth assets in its portfolio.

Husky also has interests in BP-operated refineries in the United States, and a chain of Husky-branded fuel retail outlets in Canada.

Husky shares dipped 44 cents to $24.68 in afternoon trading on the Toronto Stock Exchange.

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