TMX group

CALGARY, Dec. 20 /CNW/ - Husky Energy Inc. announced today a capital
expenditure program of $2.85 billion for 2006. The program supports the
completion of Husky's Tucker Oil Sands Project near Cold Lake, Alberta, the
goal of peak oil production from the White Rose field offshore Canada's East
Coast, and the development of upstream assets in Western Canada, as well as
offshore China and Indonesia.
"Husky Energy demonstrated its ability to execute mega projects with the
on-time, on-budget completion of the White Rose Project in 2005," said
Mr. John C.S. Lau, President & Chief Executive Officer, Husky Energy Inc. "Our
2006 capital expenditure program is to ensure the completion of other major
projects in the coming year, including the Tucker Oil Sands Project, a     
130-million litre per year ethanol facility at Lloydminster, Saskatchewan, and
the Clean Fuels Project expansion at our Prince George Refinery."

<<
                               Guidance
($millions)                        2006
                               --------
Upstream
  Western Canada                  1,300
  Western Canada Exploration        200
  Oil Sands                         230
  East Coast                        350
  International                     140
                               --------
                                  2,220
Midstream                           340
Refined Products                    260
Corporate                            30
                               --------
                                  2,850
                               --------
                               --------

Husky plans to invest $2.2 billion in its upstream assets in 2006, with
approximately $1.5 billion in capital spending for Western Canada, exclusive
of oil sands projects. The Western Canada program will focus on natural gas
exploration in Alberta and B.C., the continued long-term development of the
Company's extensive heavy oil assets in Alberta and Saskatchewan, and the
drilling of two wells to appraise the Summit Creek B-44 oil discovery and test
a new prospect in the Northwest Territories. Husky also plans to spend
$100 million to expand production of natural gas from coal (NGC) or coal bed
methane (CBM). In the Horseshoe Canyon Formation in central Alberta, Husky
will tie in 150 net wells, boosting production from 10 million cubic feet per
day of natural gas to 35 million cubic feet per day of natural gas by the end
of 2006.
In the Oil Sands business, Husky will spend $230 million, including
$145 million to finalize construction of the 30,000-barrel per day Tucker Oil
Sands Project near Cold Lake, Alberta. Commissioning of facilities and steam
injection at Tucker is expected by mid-2006, with first oil production by the
end of 2006. Husky has allocated $60 million for an initial development of its
Sunrise Oil Sands Project near Fort McMurray, Alberta. The 200,000-barrel per
day project received regulatory approval in December, 2005. The next phase of
the project will encompass engineering for the upstream element of the
development and further review of upgrading and downstream options. An
additional $25 million will be used to drill resource evaluation wells to
further assess the Caribou Lake and Saleski oil sands leases near Cold Lake
and Fort McMurray.
On Canada's East Coast, Husky plans to spend $350 million in 2006. The
program includes capital to drill and complete a fourth production well on the
White Rose offshore oil field. It is expected this well will boost production
to a peak of approximately 100,000 barrels per day by mid-2006. Husky also
plans to drill a delineation well to further define reserves in the North
Avalon Pool, adjacent to the South Avalon Pool of the White Rose oil field.
Internationally, Husky plans to spend $57 million on its interests in
both the South and East China Seas. Offshore Indonesia, Husky will spend
$75 million to advance engineering and development plans for the Madura BD gas
field.
In the Midstream and Refined Products segments, Husky plans to spend
approximately $340 million and $260 million respectively. The Midstream
program will complete debottlenecking work at the Husky Lloydminster Upgrader,
increasing throughput from 77,000 to 82,000 barrels per day by mid-2006. The
Company plans to spend $90 million to expand its heavy oil pipeline system,
including construction of a connecting line to the Tucker Oil Sands Project
near Cold Lake, Alberta. For the Refined Products segment, the Clean Fuels
Project at the Prince George Refinery will enable the refinery to produce
ultra-low sulphur diesel and will increase overall capacity from 10,000 to
12,000 barrels per day by mid-2006. Husky has allocated $120 million in 2006
for construction of a 130-million litre per year ethanol facility at
Minnedosa, Manitoba. Meanwhile, the Company anticipates its inaugural      
130-million litre per year ethanol facility at Lloydminster, Saskatchewan will
be operational in the second quarter of 2006.
For the year 2006, Husky estimates production of 360,000 to 390,000
barrels of oil equivalent per day. Light oil and natural gas liquids
production is estimated to be 103,000 to 116,000 barrels per day, including
50,000 to 55,000 barrels per day from the White Rose offshore oil field;
medium oil production is estimated to be 29,000 to 32,000 barrels per day;
heavy oil production is estimated to be 115,000 to 120,000 barrels per day;
and natural gas production is estimated to be 680 to 730 million cubic feet
per day.

Husky Energy is a Canadian based, integrated energy and energy-related
company headquartered in Calgary, Alberta. Husky Energy is publicly traded on
the Toronto Stock Exchange under the symbol HSE.

Forward Looking Statements - Certain statements contained in this
release, including statements which may contain words such as "could",
"expect", "believe", "will", "projected", "estimated" and similar expressions
and statements relating to matters that are not historical facts are forward-
looking statements and are based on Husky's current belief as to the outcome
and timing of such future events. Actual future results may differ materially.
Husky's annual report to shareholders and other documents filed with
securities regulatory authorities describe the risks, uncertainties and other
factors, such as changes in business plans and potential delays or changes in
plans with respect to development projects or capital expenditures, drilling
results and changes in estimates of future production that could influence
actual results. Husky disclaims any intention or obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

In this press release, the calculation of barrels of oil equivalent (boe)
is calculated at a conversion rate of six thousand cubic feet (mcf) of natural
gas for one barrel (bbl) of oil based on an energy equivalency conversion
method. Boes may be misleading, particularly if used in isolation. A boe
conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

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