(Adds details, background, compares with analysts' estimate)
July 22 (Reuters) - Husky Energy Inc HSE.TO , Canada's No. 3 integrated oil company, reported a smaller-than-expected quarterly loss as the focus on fewer, more efficient resource plays helped reduce production costs.
Production operating costs fell about 12 percent to $10.79 per barrel in the second quarter from a year earlier, as the company benefits from its six-year long effort to transform its business by investing in projects with lower costs.
More than 40 percent of the company's production is expected to come from low break-even projects, by the end of this year, up from just 8 percent in 2010, when it began the turnaround, the company said in June. has also sold non-core assets, including royalty interests in Western Canada, for about C$1.2 billion.
Overall earnings break-even is expected to be sub-$40 WTI by the end of 2016, as several key projects are up and running, including the 30,000-barrel-per-day (bpd) Sunrise in Alberta and the Edam East thermal project in Saskatchewan, the company said on Friday.
U.S. benchmark crude CLc1 closed at $44.75 per barrel on Thursday.
Total production fell about 6 percent to 316,000 barrels of oil equivalent per day (boepd) in the three months ended June due to planned maintenance and the Fort McMurray wildfire in Alberta, the company said.
Several oil producers and pipeline operators curbed activities due to the wildfires that began on May 1, forcing more than 1 million barrels of capacity offline.
However, Calgary-based Husky said it expected annual production at the low end of its previous forecast of 315,000-345,000 boepd.
The company's cash flow from operations more than halved to C$488 million in the latest quarter.
Husky reported a loss of C$196 million ($149.4 million), or 20 Canadian cents per share, in the three months ended June, compared with a profit of C$120 million, or 10 Canadian cents per share, a year earlier. items, the company's loss was 9 Canadian cents per share, according to Thomson Reuters I/B/E/S. Analysts' on average had estimated a loss of 21 Canadian cents per share.
($1 = 1.31 Canadian dollars)