Husky Energy keeps head above water amid low oil prices

Setting a slightly better tone for Q2 oil patch earnings season, Husky Energy reporteda second-quarter profit
of $120 million, down 81 per cent from the same quarter a year earlier.

Husky was helped by better results from its refining operations, which contributed $350 million to cash flow in the quarter. It was hurt by lower crude prices and higher taxes.

The corporate tax rate increased from 10 per cent to 12 per centas of July 1st.Even though the tax increasedidn't take effect until the third quarter of the year, Husky wrote off $157 million in Q2to account for higher taxes in the coming years.

Husky's production edged higher in the quarterto337,000 barrels of oil equivalent per daycompared with 334,000boepda year ago.In its outlook, Husky said it expects approximately 85,000barrels per day of new productionto come online by theend of next year.

AsimGhosh, Husky's chief executive officer, said the the price environment remains negative.

"It's becoming clear that we have a persistent supply demand imbalance in the oil market. I'm a member of the LL camp, the lower for longer camp."

Husky is one of three integrated energy companies reporting earnings this week, meaning it produces the oil, refines it and sellsit in retail operations. Suncor will report Wednesday and Imperial Oil on Friday. They all have a buffer from those refining operations, which are enjoying good margins over the spring and summer driving seasons.

Husky's shares are higher by 5 per cent in mid-afternoon trading on the TSX.