Canada's Husky Energy Inc beat analysts' estimates for quarterly profit on Friday, as it benefited from improved Canadian crude prices following Alberta's output cuts and investment in a number of refineries and pipelines boosted its margins per barrel.
The oil and gas producer, which runs drilling and refining businesses in Canada, the United States and Asia, said average realized prices rose to C$47.20 per barrel of oil equivalent (boe) in the first quarter, from C$40.87 per boe a year earlier.
In December last year, Alberta mandated temporary oil production cuts to deal with a pipeline bottleneck that had led to a glut of crude in storage and deep price discounts on Canadian crude.
Following the move, Canadian heavy crude prices surged to an average $42.53 a barrel in the first quarter, more than doubling from the previous quarter, and up 10 percent from the year-ago quarter. Curtailments have been reduced slightly since January and are expected to ease throughout the year.
Husky's position as an integrated oil producer has helped the company benefit from rising Canadian crude prices due to easing of the oil glut and tightness in global heavy sour oil supply due to decline in Venezuelan, Mexican crude in the market.
"The structural transformation of our business over the past several years is paying off. We are now realizing higher per-barrel margins across the company," Chief Executive Officer Rob Peabody said in a statement.
Husky, which was among the strongest critics of Alberta government's decision, said average quarterly production fell to 285,200 barrels of oil equivalent per day (boe/d) from 300,400 boe/d.
Net income rose to C$328 million ($243.1 million), in the first quarter ended March 31, from C$248 million, a year earlier.
The Calgary-based company said free cash flow in the quarter was down 43 percent to C$147 from a year ago.
Excluding items, the company earned 31 Canadian cents per share beating analysts' estimate of 17 Canadian cents per share, according to IBES data from Refinitiv.
($1 = 1.3492 Canadian dollars)
(Reporting by Arundhati Sarkar; Editing by James Emmanuel and Shailesh Kuber)