OPTI Canada Inc.

OPTI Canada Inc.

June 23, 2009 23:59 ET

OPTI Announces Equity Offering, Financial and Project Update

CALGARY, ALBERTA--(Marketwire - June 23, 2009) -


OPTI Canada Inc. (TSX:OPC) ("OPTI" or the "Company") announced today that it has filed a preliminary short form prospectus (the "Prospectus") in Canada in connection with a marketed public offering (the "Offering") of common shares of OPTI (the "Common Shares"). The Company intends to conduct the Offering through a syndicate of underwriters led by TD Securities Inc., Credit Suisse Securities (Canada), Inc., and RBC Capital Markets as joint bookrunners.

The Offering will be priced in the context of the market with the final terms of the Offering to be determined at the time of pricing. The Common Shares will be offered in all of the provinces of Canada and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended, (the "1933 Act") and other such jurisdictions as may be agreed to by the Company and the Underwriters. The Offering is scheduled to close on or about July 9, 2009 and is subject to certain customary conditions and regulatory approvals, including but not limited to the approval of the Toronto Stock Exchange.

OPTI intends to use a portion of the net proceeds from the Offering to fund its remaining $50 million of forecast capital expenditures for 2009. The remainder of the proceeds are expected to be used to fund working capital requirements and a portion may be used to reduce indebtedness under OPTI's $350 million revolving credit facility ("Revolving Credit Facility"). Under the terms of OPTI's Revolving Credit Facility, OPTI may repay amounts owing and, subject to satisfying a number of conditions precedent prior to each borrowing, make new borrowings.

Financial Update

On June 22, 2009, OPTI had financial resources of approximately $360 million consisting of $332 million of cash and $28 million of undrawn funds under the Revolving Credit Facility. Prior to December 31, 2009, OPTI is forecasting approximately $50 million for remaining 2009 capital expenditures, $80 million for the remaining interest payments on its senior secured notes and approximately $40 million for working capital requirements. OPTI expects its financial resources at December 31, 2009 will be approximately $190 million, prior to the impact of net operating cash flow from the Long Lake Project and the net proceeds from this Offering. Based on our current production, operations and commodity price assumptions, OPTI expects that the net proceeds of this offering, together with existing financial resources, will provide sufficient financial resources until full production is reached for the Long Lake Project of 72,000 bbl/d of bitumen by the end of 2010.

OPTI's Revolving Credit Facility debt to EBITDA covenant, which is measured quarterly, commences at the end of the third quarter of 2009. OPTI intends to repay the Revolving Credit Facility (whether temporarily or permanently) to the extent required to satisfy this covenant. With the net proceeds from this offering, assuming production reaches full capacity by the end of 2010, and using the current forward strip pricing for WTI pricing and foreign exchange rates, OPTI expects to be able to meet the covenant as it is currently structured until the maturity of the Revolving Credit Facility. However, to provide greater certainty of meeting this covenant, OPTI plans to seek an amendment to the covenant. OPTI has already commenced discussions with certain key lenders including the administrative agent under its Revolving Credit Facility, and upon completion of this offering, OPTI plans to broaden these discussions to include the other members of OPTI's banking syndicate with the objective of reaching an agreement to defer and amend this covenant prior to it becoming operative.

Project Update

Progress continues to be made in the start-up phase of the Long Lake Project. The Long Lake reservoir is performing as OPTI expected, given the amount of steam that has been injected into the reservoir. Steam injection has been limited to date by the ability to treat water during the ramp-up period. Nexen Inc. (the "Operator") successfully completed a project to add supplementary heat to the hot lime softeners ("HLSs") in the water treatment plant in May 2009. The Operator also recently completed maintenance work on both HLSs to remove deposits which typically build up in water treatment plants and both HLSs are now in operation.

The SAGD plant has resumed ramping up with recent steam injection rates of approximately 95,000 bbl/d and bitumen production rates of approximately 18,000 bbl/d. SAGD production in the second quarter through mid-June has averaged approximately 13,500 bbl/d. As of June 22, 2009 there were 36 wells on production. With inconsistent steam injection, the steam to oil ratio ("SOR") has ranged between 4.5 and 6.0 in the second quarter. OPTI continues to expect a long term SOR of 3.0.

The Operator recently identified a number of small modifications to be made in the third quarter of 2009 to further optimize the water treatment facility. OPTI expects the cost of these modifications will not be significant and will result in a minimal period of down time for bitumen and PSC™ production.

As steam generation increases, the Operator intends to convert all remaining wells to production mode. OPTI expects SAGD volumes to increase from current production to full capacity of 72,000 bbl/d of bitumen in late 2010. During the SAGD ramp-up period in 2009 and 2010, OPTI also expect to process third party bitumen.

All major process units in the Upgrader are operational, and preparation is underway to transition gasifier feed from vacuum residue to ashphaltenes, the final step in OrCrude™ commissioning. OPTI expects this transition to occur shortly, increasing the yield of PSC™. The Upgrader has produced over 600,000 bbls of PSC™ to date. The PSC™ which has been marketed has been sold at pricing equal to or above pricing for other synthetic crude oils. Synthesis gas from the Upgrader has been used in SAGD operations, decreasing operating costs by reducing the requirement for purchased third-party natural gas. During the initial operating period, OPTI expects periods of downtime but anticipates that the stability of operations will continue to improve. OPTI expects Upgrader capacity during ramp-up will be capable of processing all of the forecasted SAGD volumes and OPTI expects the Project to reach full capacity of approximately 58,500 bbl/d of PSC™ and other products in late 2010.

Conference Call

OPTI will host a conference call at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time) on Tuesday, June 23, 2009 to provide a corporate update. Chris Slubicki, President and Chief Executive Officer, and Travis Beatty, Chief Financial Officer, will host the call. To participate in the conference call, dial:

(800) 732-9303 (North American Toll-Free)

(416) 644-3415 (Alternate)

Please reference the OPTI Canada conference call with Chris Slubicki when speaking with the Operator.

A replay of the call will be available until July 6, 2009, inclusive. To access the replay, call (416) 640-1917 or (877) 289-8525 and enter passcode 21309569, followed by the pound (No.) sign.

This call will also be webcast, and can be accessed on OPTI Canada's website under "Presentations and Webcasts" in the "For Investors" section. The webcast will be available for replay for a period of 30 days. The webcast may alternatively be accessed at:


OPTI also announces that it has updated its investor presentation, a copy of which is available http://www.opticanada.com. The presentation contains projected netback information for Phase 1 of the Long Lake Project which updates similar disclosure in OPTI's management's discussion and analysis for the year ended December 31, 2008.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States or any other jurisdiction outside of Canada, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Common Shares offered have not been, and will not be, registered under the 1933 Act, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.

About OPTI

OPTI is a Calgary, Alberta-based company focused on developing major oil sands projects in Canada using its proprietary OrCrude™ process. OPTI's first project, Phase 1 of the Long Lake Project, consists of 72,000 barrels per day of SAGD oil production integrated with an upgrading facility. The Upgrader uses the OrCrude™ process combined with commercially available hydrocracking and gasification. Through gasification, this configuration substantially reduces the exposure to and the need to purchase natural gas. On a 100 percent basis, the Long Lake Project is expected to produce 58,500 bbl/d of products, primarily 39 degree API Premium Sweet Crude with low sulphur content, making it a highly desirable refinery feedstock. Due to its premium characteristics, OPTI expects PSC™ to sell at a price similar to West Texas Intermediate (WTI) crude oil. The Long Lake Project is a joint venture with the Operator, Nexen Inc. OPTI holds a 35 percent working interest in the joint venture. OPTI's common shares trade on the Toronto Stock Exchange under the symbol OPC.

Additional information regarding the Long Lake Project is available at


Forward-Looking Statements

Certain statements contained herein are forward-looking statements, including statements relating to OPTI's financing plans and the use of proceeds from the offering; OPTI's operations, business prospects, expansion plans and strategies; OPTI's plans and expectations concerning the use and performance of the OrCrude™ process and other related technologies; the cost, development and operation of the Long Lake Project and OPTI's relationship with Nexen Inc. Forward-looking information typically contains statements with words such as "intends," "anticipate," "estimate," "expect," "potential," "could," "plan" or similar words suggesting future outcomes. Readers are cautioned not to place undue reliance on forward-looking information because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking information will not be achieved by OPTI. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties. A change in any one of these factors could cause actual events or results to differ materially from those projected in the forward-looking information. Although OPTI believes that the expectations reflected in such forward-looking statements are reasonable, OPTI can give no assurance that such expectations will prove to be correct. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by OPTI and described in the forward-looking statements or information including the risk that OPTI may not be able to satisfy the covenants or conditions of its credit facilities and the potential accelerated repayment of such credit facilities and its senior secured notes. The forward-looking statements are based on a number of assumptions which may prove to be incorrect. In addition to other assumptions identified herein, OPTI has made assumptions regarding, among other things: market costs and other variables affecting operating costs of the Project; the ability of the Long Lake joint venture partners to obtain equipment, services and supplies, including labour, in a timely and cost-effective manner; the availability and costs of financing; oil prices and market price for the PSC™ output of the OrCrude™ Upgrader; foreign currency exchange rates and hedging risks; government regulations and royalty regimes; the degree of risk that governmental approvals may be delayed or withheld; other risks and uncertainties described elsewhere in this document or in OPTI's other filings with Canadian securities authorities.

Readers should be aware that the list of factors, risks and uncertainties set forth above are not exhaustive. Readers should refer to OPTI's current Annual Information Form and revised Management's Discussion and Analysis for the three months ended March 31, 2009 both of which are available at www.sedar.com, for a detailed discussion of these factors, risks and uncertainties. The forward-looking statements or information contained in this document are made as of the date hereof and OPTI undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable laws or regulatory policies.