Husky Energy Inc. says it is looking at getting out of retailing fuels to consumers after 80 years in the business.
The Calgary-based oilsands producer says it is launching a strategic review that could result in it selling its Canadian retail and commercial fuels business and its small Prince George, B.C., refinery.
It says it prefers to focus on its integrated corridor of upstream and downstream assets in Alberta, Saskatchewan and the U.S. Midwest as well as offshore businesses in Atlantic Canada and the Asia Pacific region, adding the decision is not related to its offer that expires next week to buy oilsands rival MEG Energy Corp.
READ MORE: Husky Energy’s hostile takeover bid for MEG Energy now expected to succeed as proposed
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Husky has more than 500 service stations, travel centres, cardlock operations and bulk distribution facilities from British Columbia to New Brunswick. Its myHusky Rewards loyalty program has about 1.6 million members.
The 12,000-barrel-per-day refinery in Prince George processes light oil into gasoline, diesel and other products for nearby regions of B.C. It owns two refineries and is half-owner of a third in the United States.
CIBC analyst Jon Morrison said Tuesday that the expected value of these assets is about $835 million.
“We believe the retail network naturally has a couple strategic buyers that should be interested, while the refinery has a smaller list of potential purchasers given the scale, size and location of the facility,” he said in an email.
READ MORE: Husky Energy trims 2019 capital budget by $300M, criticizes Alberta oil curtailment plan
Spokesman Mel Duvall says Husky started selling fuel to consumers in 1938 shortly after the original owner built a small refinery in Cody, Wyo. The refinery was moved to Lloydminster on the Alberta-Saskatchewan border in 1946.
CEO Rob Peabody says in a news release the businesses are “highly marketable” and will attract strong interest and valuations.
TD Securities Inc. is acting as financial adviser, with Torys LLP as legal adviser.
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