OPTI Canada to evaluate financial resources for 2011, seek to delever

By Jennifer Lanning Drey

Portland, Ore., July 15 - OPTI Canada Inc. believes its existing financial resources are sufficient to meet its obligations for the remainder of 2010 and is preparing to evaluate its financial resources for 2011, Travis Beatty, OPTI Canada's chief financial officer, said Tuesday during its second-quarter earnings conference call.

"For 2011, we will be evaluating our financial resources in consideration of current projected net field operating margin, current projected interest costs and the company's expectations for its capital program in 2011," Beatty said.

OPTI Canada had C$117 million of cash and C$150 million available under its revolving credit facility at June 30.

The company's expected remaining cash outflows for 2010 include C$70 million of its C$119 million capital budget and $90 million in interest payments due on its senior notes.

Beatty also noted during the call that OPTI Canada's strategic alternatives review is ongoing. The primary objective is to carry out a transaction that will materially reduce the company's overall leverage and position it for future phase development.

When later asked about a contingency plan to improve liquidity, Beatty mentioned that OPTI Canada will be looking at the potential for additional financial resources for 2011.

"The timing of that is going to depend on where we're at with our strategic alternatives process, as well as the capital markets generally, but it's something we're looking at," he said during the question-and-answer portion of the call.

OPTI Canada has just begun developing its outlook for its 2011 capital programs and will be carefully monitoring its planned ramp-up, he said.

OPTI Canada's debt consists of $1.75 billion of secured notes, $425 million of first-lien notes and C$40 million outstanding on its C$190 million revolving credit facility.

OPTI Canada reported a C$152 million net loss for the second quarter.

Calgary, Alta.-based OPTI Canada is a 35% partner in an oil sands joint venture with Nexen Inc., which owns the remaining 65% stake.

The project, known as the Long Lake Project, continued to ramp up during the second quarter, with consistent and improving operational performance, Chris Slubicki, the company's chief executive officer, said Thursday.

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