M&A

30 November, 2009

UPDATE 1-Husky buys Lloydminster heavy oil properties

* Acquires heavy oil properties from Penn West

* Daily output of more than 6,000 bpd

* 12 mln barrels proved reserves, 8.5 mln probable

CALGARY, Alberta, Nov 30 (Reuters) - Husky Energy Inc, Canada's No. 3 integrated oil and gas company, (HSE.TO) on Monday acquired heavy oil properties in Alberta and Saskatchewan producing more than 6,000 barrels per day and containing as much as 20.5 million barrels of reserves.

The company, controlled by Hong Kong billionaire Li Ka-shing, bought the properties near Lloydminster, a city on the border of the two provinces, from Penn West Energy Trust (PWT_u.TO). The price was not disclosed.

The company is already a large producer of heavy oil from the region and owns an upgrader there that converts the heavy oil into lighter crude, as well as an asphalt plant.

"This is a strategic acquisition in a region that is a very profitable and highly productive business segment," John Lau, Husky's chief executive, said in a statement. "We will ... take advantage of operational synergies by integrating these assets into the Company's extensive heavy oil operations."

The acquisition, which closed on Monday, includes 16,700 acres of exploration lands. Husky said the properties have 12 million barrels of proven reserves while another 8.5 million barrels are listed as probable reserves.

The sale was announced after markets closed on Monday. Husky shares fell 15 Canadian cents to C$27.70 while Penn West units dropped 25 Canadian cents to C$18.50 on the Toronto Stock Exchange. ($1=$1.06 Canadian) (Reporting by Scott Haggett; Editing by Frank McGurty) ((scott.haggett@thomsonreuters.com; Reuters Messaging: scott.haggett.reuters.com@reuters.net; +1 403 531-1622))

Source: http://www.reuters.com