# Husky Energy (HSE)?



## jargey3000 (Jan 25, 2011)

I notice it closed at $10.57 xmas eve. Down from 52wkhigh of $18.05. 
Anyone see this as a buy at these levels? are the bad news/layoff issues behind it?


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## fireseeker (Jul 24, 2017)

There is an existing Husky thread, albeit dormant for several years:

https://www.canadianmoneyforum.com/showthread.php/2034-What-s-up-with-HSE-(Huskey-Energy)/page3

Santa must have been tough on you, Jargey, if you arose with Husky on your mind!
Happy holidays.


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## jargey3000 (Jan 25, 2011)

fireseeker said:


> There is an existing Husky thread, albeit dormant for several years:
> 
> https://www.canadianmoneyforum.com/showthread.php/2034-What-s-up-with-HSE-(Huskey-Energy)/page3
> 
> ...


.....hahaha...i dont own it just wondering if its a xmas buying opp...?
"are there no workhouses?"....:subdued:


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## AltaRed (Jun 8, 2009)

Probably because Husky's name is associated with the NF offshore and is in the NF press a lot. 

It's at best a second tier company. It may be worth playing it as a 'trading' stock at these levels but it is not a buy and hold since it cannot really compete with the heavyweights long term. There will be new cash flow in a few years with some new production and the re-build of the Superior refinery so there will be a bump on stock price then. Beyond that, it is hard to know what a Hong Kong billionaire's controlling interest will mean for this company. It will likely be taken out by someone within 5-10 years when a lot of consolidation will need to start happening in a shrinking industry when global oil demand growth rolls over, but when and by whom* is anyone's guess.

* When Li Ki Shing tires of HSE, my guess is it may be one of the Chinese oil companies that buy his shares and they would then take Husky private. Check back in circa 2025-2030.


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## jargey3000 (Jan 25, 2011)

....good read... tks alta


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## Gator13 (Jan 5, 2020)

I bought Husky (August 2019) & Inter Pipeline (May 2019) 

Li Ki Shing (through CK Infrastucture) made an unsolicited offer for Inter Pipeline in August or September of last year which was rejected by Inter Pipeline. Li Ki Shing is also a major shareholder of Husky and his son sits on the board. I am hoping that one or both of these companies come in to play at some point. Please correct me if anything has changed and my facts are not correct.


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## AltaRed (Jun 8, 2009)

Anyone's guess but I'd hope IPL would remain independent or at least become a regulated common carrier IF taken over by a foreign national. Risky having strategic assets controlled by the Chinese without regulatory oversight.

Note: Some assisted living facilities in BC fell under the control of the Chinese and living conditions are terrible, with minimal BC regulatory oversight. How's that for ethics and moral conscience?


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## Gator13 (Jan 5, 2020)

AltaRed said:


> Anyone's guess but I'd hope IPL would remain independent or at least become a regulated common carrier IF taken over by a foreign national. Risky having strategic assets controlled by the Chinese without regulatory oversight.
> 
> Note: Some assisted living facilities in BC fell under the control of the Chinese and living conditions are terrible, with minimal BC regulatory oversight. How's that for ethics and moral conscience?


Completely agree. China would never allow a Canadian corporation to control a strategic Chinese asset. Control of far too many Canadian assets have been given up already.


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## AltaRed (Jun 8, 2009)

Not surprising Husky is exiting Canada with the all stock takeover by Cenovus. Cenovus is perhaps one of only a few that would have been interested in the whole company. Husky was already begging the Feds to take an equity interest in its latest offshore project due to a capital (cash) shortage. Husky simply wasn't big enough to be a first tier competitor in each of its operating businesses. For those of you who had a position in Husky, I don't know whether this represents a premium for you, depending on what you think of as a new owner of Cenovus shares, but I expect a number of shareholders of both Husky and Cenovus will decide to exit.

I would be surprised whether Cenovus will keep Husky's Canadian downstream. It simply is too small to be competitive and Husky was already looking for an exit


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## nobleea (Oct 11, 2013)

Crazy. Thought Husky was a little more durable than that.
My cost on Husky is probably double the buyout price.


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## scorpion_ca (Nov 3, 2014)

Is it a better deal than the one MEG Energy offered previously?


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## fireseeker (Jul 24, 2017)

scorpion_ca said:


> Is it a better deal than the one MEG Energy offered previously?


It was the other way around.

Husky scraps bid for oil rival MEG Energy, citing Alberta output cuts


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## doctrine (Sep 30, 2011)

RIP Husky. This combined company could look good in a few years but it will take some time to eliminate the redundancies and reduce the debt. Husky has a surplus of refining capacity, and Cenovus has a surplus of production - it is a pretty good fit. The debt holders of both companies will be relieved. This is now quite credibly the definitive #3 in Canada by production and book value, although it still will trade at a discount to IMO by market cap. 

This may also negatively impact MEG because potential suitors have disappeared, and if SU or CNQ come knocking there is less competition. But I think SU will be on the lookout for something soon.

This won't change the outcome of West White Rose, that project is finished - offshore is just not competitive. There is no more money for new projects. 

There is also no money for takeovers - this is all-share, no cash. The universe of oil and gas producers continues to shrink further. Much more is expected.


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## londoncalling (Sep 17, 2011)

Share price down 8.4% on the day. It should also be noted that many others in the energy sector were down as well as the market overall.


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## AltaRed (Jun 8, 2009)

doctrine said:


> RIP Husky. This combined company could look good in a few years but it will take some time to eliminate the redundancies and reduce the debt. Husky has a surplus of refining capacity, and Cenovus has a surplus of production - it is a pretty good fit. The debt holders of both companies will be relieved. This is now quite credibly the definitive #3 in Canada by production and book value, although it still will trade at a discount to IMO by market cap.


Good post, or at least one I can identify/agree with. I think CVE-HSE is a good fit for production, shipping and refining, but I have to think the entity will get rid of the rest of Husky's retail operations.They just are not competitive with PKI, ATD.B et al. Think they will be able to do well.


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## fireseeker (Jul 24, 2017)

londoncalling said:


> Share price down 8.4% on the day. It should also be noted that many others in the energy sector were down as well as the market overall.


HSE was actually up 12% today, thanks to the takeover premium.
CVE was down 8%.


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## :) lonewolf (Feb 9, 2020)

Here is the trade to play oil buy XOP Dec 15 or latter sell April 25 or latter based on opening price dividends factored in

2006 +6.75%
2007 +16.83%
2008 +1.02%
2009 +15.73%
2010 +25.49%
2011 +7.35%
2012 +7.46%
2013 +18.36%
2014 +22.24%
2015 +13.40%
2016 -14.54%
2017 +11.05%
2018 +11.95%
2019 +11.9 %
2020 -45.27%


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## scorpion_ca (Nov 3, 2014)

*Cenovus announces job cuts after acquiring Husky Energy*

The Calgary-based company confirmed that it plans to cut up to 25 per cent of its workforce.

Cenovus said that could affect about 2,150 positions from the 8,600 employees and contractors that make up its workforce.

The majority of the job losses are expected in Calgary.


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## londoncalling (Sep 17, 2011)

fireseeker said:


> HSE was actually up 12% today, thanks to the takeover premium.
> CVE was down 8%.


That's correct I was looking at CVE at the time. My apologies for the error and any confusion it may have caused. thanks @fireseeker


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## gardner (Feb 13, 2014)

Just got the proxy vote notification. I voted in favour -- not that my puny few shares will matter. HSE holders will get 0.7845 of a Cenovus share plus 0.0651 of a Cenovus share purchase warrant. It took me a while to find what the warrant would be. It is for a Cenovus share at an exercise price of $6.54 per share and lasts for five years.

I can't see any advice whether this will constitute a capital event for shareholders, but I imagine not. If there is a required election, I don't see it mentioned.


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## JosephK (Nov 7, 2012)

Just noticed that the takeover resulted in a combination of shares and warrants. Can anyone point me in the direction of an explanation as to how I calculate the cost basis for the shares/warrants for tax purposes?


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## gardner (Feb 13, 2014)

TDDI shows the ACB of the warrants and shares in my account. There was no cash-in-lieu so maybe they adjusted things a little, or else just ripped off the last quarter share somewhere.



> Shareholders of Husky Energy received 0.7845 Cenovus shares for each share they hold and 0.0651 of a Cenovus common share purchase warrant.


I had 306 shares yielding 240.057 CVE + 19.921 Warrants. I received 240 and 19.
The CVE shares and warrants both have book value in the activity report. In my case 99.117% is the shares and 0.883% is the warrants. I am not sure how they worked that out. I suppose the CVE and warrants had an actual value on closing day and they apportioned the book value accordingly:

value-received = 0.7845 * price(CVE) + 0.0651 * price(CVT.WT)
acb(CVE) = acb(HSE) * 0.7845 * price(CVE) / value-received
acb(CVE.WT) = acb(HSE) * 0.0651 * price(CVT.WT) / value-received

In my case I received some HSE via the DRIP that they implemented at one point and I lost track of the book value on those DRIP shares, so I can't even calculate my own ACB exactly. But the fact that the ACBs of the warrants and shares exactly match the ACB they have for my HSE, despite the whole share caculation, means that they must have done SOME voodoo.


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