OPTI Canada costs up, field operating margin improves to C$2 million

By Caroline Salls

Pittsburgh, July 15 - OPTI Canada Inc.'s joint venture operating costs for the first two quarters of 2011 increased, but the company achieved a C$2 million quarterly positive net field operating margin during the second quarter, according to a company news release.

In comparison, the company posted an C$8 million quarterly net field operating margin loss in the first quarter.

OPTI said the operating costs increased as a result of planned and unplanned maintenance and initiatives to increase plant reliability and improve well performance.

According to the release, the company has implemented modifications to increase the capacity of its water disposal and plans to add further capacity later this year.

OPTI said it does not expect to achieve its expected range of Long Lake bitumen production volumes for 2011 based on lower-than-expected production since it made the forecast in November 2010.

The company said multiple initiatives are underway to support the production increases and operational performance improvements at the Long Lake Project.

In addition to these initiatives, and aligned with the objective to expand production from its resource areas, OPTI said it is evaluating where it is most efficient to add steam capacity and strategically place wells.

Effective April 1, the company said it exercised a deferred payment funding option to continue advancing engineering and execution plans for its Kinosis project to the end of May. During the second quarter, the option was further extended to the end of September.

OPTI's proportionate share of deferred costs plus interest to June 30 is roughly C$10 million, the release said.

As of June 30, the company had C$189 million in cash and cash equivalents, as well as $73 million of restricted cash held in an interest reserve account tied to its $300 million of first-lien notes.

OPTI Canada is a Calgary, Alta.-based company focused on developing oil sands projects.

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