Husky Energy Increases Production

Husky Energy Inc. reported net earnings of $126 million ($0.29 per share) in the first quarter of 2002, compared with $192 million ($0.42 per share) in the same quarter of 2001. Cash flow from operations in the same period was $373 million ($0.87 per share), down from $620 million ($1.46 per share) in the first quarter of 2001. Results for 2001 have been restated to reflect the adoption of the recommendations of the Canadian Institute of Chartered Accountants on foreign currency translation. Net earnings in the first quarter of 2002 were down from the same period last year, reflecting lower natural gas prices in the quarter. Earnings were positively impacted by the narrowing of heavy/light crude oil differentials and a lower income tax provision. “The first quarter of 2002 was significant for Husky. Production from the Terra Nova oil field commenced in January and project sanction for the White Rose development project was announced in March,” said John C.S. Lau, President & Chief Executive Officer. “Husky Energy has entered into an era of large-scale projects that provides future growth for the Company. Husky will continue with its strategic growth and focus on financial discipline and earnings.” Terra Nova, the second oil field development in the Jeanne d’Arc Basin, off the east coast of Newfoundland and Labrador, commenced production in January and reached production rates of 125,000 barrels of oil per day. In 2002, the annual average production from Terra Nova is expected to add approximately 11,000 barrels of oil per day net to Husky. On March 28, 2002, Husky and its co-venturer announced their decision to proceed with the development of the White Rose oil field. White Rose will be the third oil field development in the Jeanne d’Arc Basin. “We are pleased to be in the position to move forward with the development of White Rose,” said Mr. Lau. “White Rose will contribute to Husky’s future production growth and will benefit the oil and gas industry in Canada and more particularly in Newfoundland and Labrador”. The Wenchang offshore development project is proceeding on schedule with the floating production storage and offloading (FPSO) vessel successfully completing commissioning and sea trials prior to moving onto location. Production from the Wenchang project is anticipated by the middle of this year, and is expected to add an annual average of approximately 8,000 barrels of oil per day to Husky’s production in 2002. Peak production is expected at 50,000 barrels of oil per day, 20,000 net to Husky.