Husky Energy Inc. reported a net profit of C$186 million on Feb. 24, helped by a gain on asset sales and the reversal of a C$202 million (US$154 million) impairment charge.

Excluding the one-time items, the Canadian oil producer posted a loss of C$6 million, which was smaller than expected, helped by lower production costs and higher margins in its refining operations.

"Strong upstream production and U.S. downstream performance has delivered increased funds," CEO Rob Peabody said on an earnings call. "We are continuing to lower our cost structure and expand our margins."

Husky, controlled by Hong Kong billionaire Li Ka-Shing, said overall E&P operating costs fell 4% to C$13.92 per barrel (bbl) in the quarter.

Average realized U.S. refining margins more than doubled to $9.86/bbl from a year earlier.

The Calgary, Alberta-based company's average production fell 8.4% to 327,000 barrels of oil equivalent per day.

The company reported a net profit of 19 Canadian cents per share. Excluding its one-time items, its loss was 1 Canadian cent per share, compared with the analysts' average estimate for a loss of 2 Canadian cents, according to Thomson Reuters I/B/E/S.

Peabody said the company has focused on fewer oil and gas plays in western Canada and expects to "do some modest portfolio tidy-up throughout this year."

"This has created a more streamlined capital efficient business with reduced reclamation obligations," he said.

Peabody also said production at the company's Tucker thermal oil sands project will ramp up toward 30,000 bbl/d through 2018, from 21,000 bbl/d currently.

Husky is ramping up its operations off the Atlantic coast, including scheduling two more wells for its White Rose asset and two exploration wells for the Flemish Pass Basin in 2017, Peabody said.

Reuters reported on Feb. 24 that Husky is weighing the sale of some of the eastern assets, though Peabody declined to comment on the matter.

Husky recorded a loss of C$69 million, or 9 Canadian cents per share, in the year-earlier quarter.

The company's shares, which had soared 22.6% in value in the 12 months to close on Feb. 23 of C$16.40, last traded at $15.82. (US$1 = C$1.31)