Husky Energy Inc. (Husky) is a Canadian-based energy and energy-related company headquartered in Calgary, Alberta. Husky operates in Western Canada, offshore the East Coast of Canada and holds interests in the South and East China Seas, and Indonesia. Husky employs more than 4,000 people and has a market value of approximately CDN $38 billion.

Husky commenced trading on The Toronto Stock Exchange under the symbol HSE, on 28 August 2000 and is included in the S&P/TSX Composite, S&P/TSX Canadian Energy Sector, and S&P/ TSX 60 indices.

Operations
Husky's operations can be divided into three distinct business segments:

Upstream
Upstream includes the exploration, development and production of crude oil, bitumen and natural gas in Western Canada, offshore the Canadian East Coast, in the South and East China Seas, offshore Indonesia and other international areas. The Western Canadian assets contribute the majority of the Company's earnings and cash flow, providing a strong base to fund Husky's long-term development projects.

Midstream
Midstream operations include the upgrading of heavy crude oil into premium synthetic crude oil, pipeline transportation, gas storage, cogeneration, and the marketing of crude oil, natural gas liquids, sulphur and petroleum coke. Significant assets include the Lloydminster heavy oil upgrader with a processing capacity of 82,000 barrels per day, a 2,050-kilometre pipeline system, a 50 per cent interest in a 215-megawatt cogeneration facility at Lloydminster and a 90-megawatt power generation facility at Rainbow Lake, Alberta, gas storage capacity, treating and gathering systems, and commodity marketing.

Downstream
Downstream comprises the refining, marketing and distribution of gasoline, diesel, asphalt, ethanol and ancillary services in Canada and the United States, and a network of retail outlets. Core assets include the Lima refinery, the Lloydminster asphalt refinery, the Prince George light oil refinery and a network of over 500 retail outlets from the provinces of British Columbia to Ontario and to the Yukon Territory.

Upstream Operations

Western Canada Conventional Production
Husky has oil and gas leases on approximately 7.5 million acres in Western Canada, with plenty of opportunity for new reserve additions from exploration and development.

Heavy Oil
Husky has been a pioneer in the development and production of heavy oil and remains Canada's dominant player. The Company's position is enhanced by synergies with its nearby heavy oil upgrader and asphalt refinery, and leases on 1,100,000 acres of undeveloped and 415,000 acres of developed landholdings.

Oil Sands
The oil sands of northern Alberta are one of Husky's long-term growth areas. The Company has nearly 511,000 acres in the Athabasca, Cold Lake and Peace River areas that contain over 40.9 billion barrels of bitumen in place.

Husky's first two oil sands projects are at Tucker and Sunrise. Construction on the Tucker Oil Sands Project was completed in August 2006, and achieved first oil at the end of 2006. The Tucker Project, is estimated to have a 35 years project life and peak production of more than 30,000 barrels per day. Regulatory approval to develop the Sunrise Oil Sands Project was received in December 2005. Husky estimates that the Sunrise Project could produce 3.2 billion barrels of bitumen over a 40 years life.

Canada's East Coast
Husky is very active in oil and natural gas production and exploration in the Grand Banks, offshore the coast of the province of Newfoundland and Labrador. The Company is the majority owner (72.5 per cent) and operator of the White Rose oil field and has a 12.51 per cent interest in the Terra Nova oil field, as well as in a number of smaller fields in the central part of the Jeanne d'Arc Basin. Husky holds working interests in 15 significant discovery areas in the Basin.

International
Husky's first venture in China was the 2002 acquisition of a 40 percent interest in the Wenchang oil fields located in the western Pearl River Mouth Basin, approximately 300 kilometres south of Hong Kong and 135 kilometres east of Hainan Island. Husky's total acreage in the South and East China Seas has grown to over 5.4 million acres.

In June 2006 Husky Energy reported a significant hydrocarbon discovery at Liwan 3-1-1, in Block 29/26, in the South China Sea. The Liwan 3-1-1 well will be sidetracked for further evaluation of the pay zone and Husky completed a 3-D seismic survey to assess a number of similar structures which were identified on 2-D seismic data. A deep water drilling rig has been secured for a three year term with delivery expected in mid-2008. Based on our current interpretation of the 2-D seismic and the Liwan 3-1-1 well results, the discovery could contain a potential recoverable resource of four to six trillion cubic feet of natural gas and as such, would be one of the largest natural gas discoveries offshore China.

Husky's Madura Strait block is located in the East Java Sea about 40 kilometres northeast of the island of Java and covers an area of 2,794 square kilometres. Husky's production sharing contract in the Madura Strait offers great potential, as it contains the BD and the MDA gas fields along with additional exploration prospects. In June 2006, Husky acquired the East Bawean II Block in the East Java Sea. Husky holds a 100% interest of both blocks and the acquisition of the East Bawean ll Block increases Husky’s total holdings in Indonesia to 7,049 square kilometres or approximately 1.8 million acres.

Midstream Operations

Upgrading
Husky owns and operates a heavy oil upgrading facility at Lloydminster, Saskatchewan which processes heavy oil feedstock into premium quality synthetic crude oil. The Upgrader achieves a very high yield of light synthetic as it uses both coking and hydrocracking. The Upgrader processes the heavy oil into light (32-34^o API), sweet (0.1 per cent sulphur versus conventional light at 0.3 to 0.5 per cent) and low-nitrogen (0.04 per cent) synthetic crude oil, which can be further refined into premium-quality transportation fuels

The Upgrader has achieved throughput capacity of 82,000 barrels of synthetic crude oil per day following the completion of debottlenecking projects in 2007.

Infrastructure
An important component of Husky's heavy oil operations in Lloydminster is its 2,050-kilometre heavy oil pipeline system. As part of its operations, the Company owns, operates and leases natural gas storage capacity, and has a 50 per cent ownership interest in an electricity cogeneration facilities at its Lloydminster heavy oil upgrader and Rainbow Lake natural gas processing plant.

Commodity Marketing and Storage
Husky is a major marketer of both its own and third-party production volumes of crude oil, natural gas, natural gas liquids, sulphur, and petroleum coke. Husky sells natural gas to a large variety of end users across North America, and manages transportation on behalf of third parties.

Downstream Operations

Wholesale, Commercial and Retail Marketing
Husky and Mohawk-branded fuels are marketed through more than 500 retail outlets, travel centres and bulk distributors located in the Canadian provinces of British Columba, Alberta, Saskatchewan, Manitoba and Ontario, and Yukon Territory.

Oil Refining and Ethanol Processing
In 2007, Husky completed the purchase of a 165,000 barrel per day light oil refinery based in Lima, Ohio for USD1.9 billion plus working capital. Options are being examined to convert the refinery to process heavier feed stocks.

The light oil refinery at Prince George, British Columbia produces all grades of unleaded gasoline, seasonal diesel fuels, a propane and butane mix, and heavy fuel oil. Following the completion of the Clean Fuels Project in 2006, refinery throughput increased from 10,000 to 12,000 barrels per day.

Husky plans to become Western Canada's largest producer of ethanol for use in blending with fuel. Ethanol is an oxygenate, derived from grain, that when added to gasoline promotes fuel combustion, raises octane levels and prevents water from freezing in fuel lines. The use of ethanol-blended gasoline reduces emissions from vehicles and thus reducing greenhouse gas emissions. The Company completed its 130 million litres of ethanol per year at Lloydminster, Saskatchewan in June 2006 and a 130-million litre per year facility at Minnedosa, Manitoba at the end of 2007.

Asphalt Refinery and Marketing
Husky owns and operates a 27,000 barrel per day refinery at Lloydminster that processes heavy oil into asphalt, used for paving and building products. The high quality of the asphalt produced at the Lloydminster refinery has allowed Husky to achieve a 35 per cent market share in the western Canadian paving market. 40 per cent of the refinery production is exported to the United States, where demand for high specification asphalt is growing.

Husky Energy Inc.
707-8th Avenue SW
Box 6525, Station "D"
Calgary, Alberta
Canada T2P 3G7
Telephone: (403) 298 6111
Fax: (403) 298 7464
Website: www.huskyenergy.ca

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