OPTI Canada Declares 2010 Budget, Sets Aside $92MM for Long Lake

OPTI Canada has approved a $120 million capital program for 2010. OPTI's share of budgeted costs for Phase 1 of the Long Lake Project in 2010 is expected to be approximately $92 million. Completion of the ash processing unit in the Upgrader has been deferred to 2011 in order to manage 2010 capital costs. Phase 1 expenditures will be primarily directed towards sustaining capital for the SAGD operation and other initiatives to ensure the long-term reliability of the Project, including the installation of electric submersible pumps and the drilling of two new well pads. OPTI continues to estimate an average of $8 to $9 per barrel of sustaining capital over the life of the Project.

In 2010, OPTI will invest approximately $23 million in advancing Phase 2 engineering and detailed execution plans with $5 million budgeted for development of Phases 3 through 6. OPTI and its joint venture partner, Nexen Inc., have agreed to defer the sanctioning of Phase 2 to late 2011 in order to gain additional Phase 1 operating experience prior to construction of future phases, as well as to potentially obtain greater clarity on carbon dioxide regulations.

"At the Long Lake Project, plant reliability and performance have improved substantially since the turnaround in September," said Chris Slubicki, President and Chief Executive Officer of OPTI. "While it is early in the ramp-up process, we look forward to a significant ramp-up through 2010 with the reservoir responding to increasing and consistent steam volumes and the Upgrader fully operational and approaching design yields."

Project Update

Progress continues to be made in the ramp-up of the Project. Currently, steam injection is approximately 100,000 bbl/d with bitumen production of approximately 17,000 bbl/d. Average bitumen production for the month of November was approximately 15,200 bbl/d. After the turnaround in the third quarter, the number of well pairs receiving steam has increased to over 70, with 50 well pairs on production as of December 7, 2009. Upgrader on-stream time is increasing and, in November, improved reliability allowed the Project to process 95% of produced and purchased bitumen. The solvent deasphalter and thermal cracking units are now in operation, allowing the Upgrader to transition from gasifying vacuum residue to gasifying asphaltenes. As a result, PSC(TM) yields have increased to approximately 70%. Once this transition is complete we expect PSC(TM) yields to reach approximately 80%.