Husky Energy Inc. tumbled the most in two years after the Canadian energy company suspended operations on its SeaRose offshore vessel in the Atlantic, after receiving a reprimand for a close call with an iceberg.
An iceberg came with a quarter of a nautical mile of SeaRose on March 29, when it was laden with 340,000 bbl of crude and 84 workers, according to the Canada-Newfoundland and Labrador Offshore Petroleum Board. The board concluded that Husky has “serious issues” with its ice-management systems and organizational decision-making, and the company won’t be permitted to resume operations on the vessel until the body is confident the problems have been addressed.
Shares in the Calgary-based company tumbled 6.6% to C$17.80 at 9:42 a.m. in Toronto after falling 13% earlier, the biggest intraday drop since January 2016. Suspension of operations could affect Husky’s near-term free cash flow and may affect timing of the reinstatement of its dividend, analysts say.
Husky, the Calgary-based oil company controlled by Hong Kong billionaire Li Ka-Shing, said it will take all necessary steps to comply with the board’s order. The SeaRose floating production, storage and offloading vessel accounts for about 27,000 bopd.
“We could have and should have responded differently according to the pre-existing plan, and we will learn from this incident,” CEO Rob Peabody said in a statement.
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