Opti's parent corporation is Ormat, the Israeli corporation that developed "orcrude"-- otherwise known in Alberta as "co-generation"-- burning the waste gunk from the bottom of a barrel of tar sands bitumen to provide energy. This would eventually be used in much of historical Palestine to develop oil shale and has been using the Long Lake plant as a laboratory to make this production happen. Long Lake officially went commercial in October of last year.
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OPTI sticks to plan to raise cash
DAVID EBNER // VANCOUVER
Globe and Mail
Jun. 27, 2009
Oil sands company OPTI Canada Inc. will push ahead with trying to raise $150-million after the Toronto Stock Exchange took the unusual step of blocking a plan to sell new shares to investors.
OPTI, which is partners with Nexen Inc. in the Long Lake oil sands project, had reached a deal on Wednesday with a group of investment banks to sell 88.25 million shares at $1.70 each. But the offering came at a sizable discount of 35 per cent to the stock's close of $2.60 on Tuesday - and the TSX said it wouldn't approve the sale unless OPTI first conducted a shareholder vote.
OPTI said that it was impractical to take six weeks to organize a shareholder vote while buyers of the new stock waited for a result. So instead it will continue to work with its bankers on the financing, led by TD Securities Inc., Credit Suisse Securities (Canada) Inc. and RBC Dominion Securities Inc.
It is expected that the Toronto Stock Exchange would approve a stock offering without a shareholder vote if the price was no more than 20 per cent below the trading average of the previous five days. It could mean that with the stock now at $2.09, a deal similar to Wednesday's could be completed by early next week.
The TSX order for a shareholder vote surprised OPTI, its lawyers, and its bankers, said chief executive officer Christopher Slubicki, who himself is a veteran investment banker and joined OPTI as CEO earlier this year.
"Did we anticipate this? Absolutely not. It was new territory for all of us," Mr. Slubicki said.
Ordering a shareholder vote on a stock offering is "not terribly common," said Toronto Stock Exchange spokeswoman Carolyn Quick. She wouldn't quantify how often the exchange makes such a decision.
OPTI needs the money to fund its share of the $6-billion Long Lake project. Falling oil prices, and a slow startup of the operation, have crunched OPTI's finances since the economic storm began last September.
The company had been 50-50 partners with Nexen but last December sold 15 per cent of the project to Nexen for an emergency infusion of $735-million, leaving it as the minority partner at 35 per cent.
Shares of OPTI, which traded at about $25 a year ago, cratered to 61 cents in March before surging almost sevenfold to around $4 on takeover speculation, sparked by the appointment of Mr. Slubicki and the oil sands expansion ambitions of France's Total SA.
Work on Long Lake is going slowly and the project remains about three years behind schedule, with full production of 58,500 barrels a day currently predicted for late 2010.
http://www.theglobeandmail.com/report-on-business/opti-sticks-to-plan-to...
