(Adds details on Sunrise costs, executive quote)
July 24 (Reuters) - Canadian oil and gas producer HuskyEnergy Inc, controlled by Hong Kong billionaire LiKa-shing, reported a 4 percent increase in second-quarterearnings on Thursday, helped by an 8 percent rise in production.
Canada's No.3 integrated oil company also said it continuesto see "some cost pressure" at its C$2.7 billion ($2.5billion)Sunrise Energy project in northern Alberta, but declinedto provide a cost update until the specifics were nailed down.
"We have to finalize details with the contractor, so I can'tgive any update on that," said Bob Baird, downstream senior vicepresident, on a conference call, adding: "We are still seeingour return on the project meeting our original expectations."
Husky first said that costs could climb for phase one ofSunrise, which is set to start up later this year, at aninvestor day in June. The project, a joint venture with BP Plc, is set to produce some 60,000 barrels-per-day (bpd).
Shares of Husky, which produces oil and gas in Canada andSoutheast Asia, were up 0.6 percent at C$34.30 around midday onthe Toronto Stock Exchange, as second quarter earnings metanalyst expectations.
The Calgary-based company said its net income rose to C$628million ($586 million), or 63 Canadian cents per share, in thethree months ended June 30 from C$605 million, or 59 Canadiancents per share, a year earlier.
Adjusted earnings of 69 Canadian cents per share matched the average forecast, according to Thomson Reuters I/B/E/S.
Production rose to 334,000 barrels of oil equivalent perday, while average realized prices for crude oil, natural gasliquids and bitumen rose to C$90.33 per barrel from C$77.98.
Husky also owns two refineries North America, holds a 50percent interest in a third, and operates a heavy oil upgraderin Lloydminster, Saskatchewan. Throughput at its refineries andLloydminster upgrader fell to 304,000 bpd from 317,000.
Cash flow from operations, a measure of the company'sability to pay for new projects, rose about 4 percent to C$1.5billion, or C$1.52 per share.($1 = 1.0746 Canadian Dollars) (Reporting by Julie Gordon in Vancouver and Ashutsoh Pandey inBangalore; Editing by Ted Kerr)
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