UPDATE 1-Husky selling part interest in midstream assets for C$1.7 bln

(Adds quote, details of deal, earnings)
By Nia Williams
CALGARY, Alberta, April 25 (Reuters) - Oil and gas producer
Husky Energy HSE.TO reported a first-quarter loss on Monday
and said it has agreed to sell a partial interest in a package
of Canadian midstream energy assets to two Hong Kong-based firms
for C$1.7 billion ($1.34 billion) in cash.
Husky will retain 35 percent interest and remain operator of
the assets, which are located in Alberta and Saskatchewan and
consist of around 1,900 kilometres of pipeline, 4.1 million
barrels of oil storage capacity and other ancillary assets.
The three companies will form a new limited partnership of
which Husky will own 35 percent, Power Asset Holding Ltd
0006.HK will own 48.75 percent and Cheung Kong Infrastructure
Holdings Ltd 1038.HK will own 16.25 percent.
Cheung Kong Infrastructure, like Husky, is controlled by
Hong Kong billionaire Li Ka-shing.
"We set a high bar for this transaction," said Husky chief
executive Asim Ghosh. "It was important to realize full value
for these assets and to maintain operatorship and preserve the
tight integration between our heavy oil production, marketing
and refining assets."
Husky is also marketing around 60,000 barrels per day (bpd)
of non-core assets sales in western Canada and 2,000 bpd of
royalty production.
In its earnings statement, the company reported
larger-than-expected losses from a three-month period in which
benchmark crude prices touched 13-year lows around $26 a barrel.
Husky said its net loss was C$458 million, or 47 Canadian
cents per share, compared with earnings of C$191 million, or 19
Canadian cents, in the first quarter of 2015.
Analysts expected, on average, a first-quarter loss of 26
cents per share, according to Thomson Reuters I/B/E/S.
The company's cash flow from operations fell 48 percent from
the same period a year earlier to C$434 million, or 43 Canadian
cents per share.
Total production fell 4 percent to 341,000 barrels of oil
equivalent per day versus the first quarter of 2015.
Despite persistently low oil prices Husky is ramping up
production at its Sunrise oil sands project in northern Alberta,
a joint venture with BP Plc BP.L , and bringing new thermal
projects online. It said it remains on track to add
55,000-60,000 bpd of new output.
Along with its oil and gas operations in Canada and
Southeast Asia, Husky owns all or part of four refineries in
North America and operates a heavy oil upgrader at Lloydminster,
Saskatchewan.
($1 = 1.2676 Canadian dollars)