CALGARY, July 29 /CNW/ - OPTI Canada Inc. (OPTI) announced today the Company's financial and operating results for the quarter ended June 30, 2009.

The Long Lake Project (the Project) is the first to use OPTI's integrated OrCrude(TM) process. Our proprietary process is designed to substantially reduce operating costs compared to other oil sands projects while producing a high quality, sweet synthetic crude oil.

"We significantly strengthened our financial position recently with the equity offering that closed earlier this month, and we believe we now have the liquidity we require to reach full production at Long Lake in late 2010," said Chris Slubicki, President and Chief Executive Officer. "The Project is built, operating and as it ramps up we expect to demonstrate the substantial value of our next-generation technology which is anticipated to generate the best netbacks in the industry."

FINANCIAL SUMMARY

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Three months Six months

ended ended Year ended

June 30, June 30, December 31,

In millions 2009 2009 2008

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Net loss $ (9) $ (106) $ (477)(1)

Total oil sands expenditures(2) 22 97 706

Working capital (deficiency) 255 255 (25)

Shareholders' equity $ 1,366 $ 1,366 $ 1,471

Common shares outstanding (basic)(3) 196 196 196

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Notes:

(1) Includes $369 million pre-tax asset impairment provision related to

working interest sale to Nexen.

(2) Capital expenditures related to Phase 1 and future phase development.

Capitalized interest, hedging gains/losses and non-cash additions or

charges are excluded.

(3) On July 14, 2009, OPTI issued an additional 85,720,000 common shares,

which increased the common shares outstanding to 281,749,526. See

"Share Capital".

PROJECT UPDATE

The ramp-up of the Project is progressing and the reservoir continues to perform as OPTI expected, given the amount of steam that has been injected. Steam volumes have been limited by the ability to treat water.

In May, a project to add supplementary heat to the hot lime softeners (HLS) in the water treatment plant was successfully completed. Routine maintenance work to remove deposits which typically build up in water treatment plants was also completed. Steam production increased and in June we have achieved injection rates of approximately 95,000 bbl/d. Gross bitumen production rates reached a peak of approximately 18,000 bbl/d in June. At June 30, 2009, there were 41 of 81 well pairs on production operating with a steam to oil ratio (SOR) that ranges between 4.0 and 5.0. We continue to anticipate a long-term SOR of 3.0.

Bitumen production volumes for the second quarter averaged approximately 14,300 bbl/d (gross). Production volumes in the second quarter were impacted by downtime associated with improvements made to the HLS units.

In mid-July, steam injection rates were intentionally reduced in order to address water chemistry issues in advance of planned maintenance in the third quarter. As a result, average bitumen production volumes for the period July 1 to July 26 averaged approximately 13,000 bbl/d. As these issues are resolved, steam and bitumen volumes have begun to ramp-up again to approximately 69,000 bbl/d and 14,500 bbl/d, respectively.

As previously announced, a project to replace valves and conduct maintenance on the water treatment plant during the third quarter of 2009 is planned to further optimize steam production. We expect the cost of these activities will not be significant but will result in scheduled downtime in the third quarter, impacting bitumen and Premium Sweet Crude (PSC(TM)) production.

As steam generation increases, we expect that all remaining wells will be converted to production mode. We expect steam assisted gravity drainage (SAGD) volumes to increase from current production levels, other than the short-term reduction in the third quarter of 2009 noted above, to full capacity of 72,000 bbl/d of bitumen in late 2010. During the SAGD ramp-up period in 2009 and 2010, we also expect to process third party bitumen.

With respect to the Upgrader, all major units are operational and synthesis gas has been used in SAGD operations, decreasing operating costs by reducing the requirement for purchased natural gas. Upgrader reliability is improving with an on-stream factor of 46% during the second quarter of 2009 compared to 33% in the first quarter of 2009. The PSC(TM) that has been marketed has, on average, been sold at pricing equal to or above pricing for other synthetic crude oils.

Having successfully operated the Upgrader for several months, the Operator intentionally shut down the Upgrader last week to assist in dealing with water chemistry issues impacting steam generation for SAGD operations. When the Upgrader is restarted, we expect to be in a position to start-up the solvent de-asphalter and thermal cracker units. This is expected to take place shortly before or after the planned maintenance in the third quarter. These units will allow the Operator to transition from gasifying vacuum residue, which contains some lighter parts of the barrel, to gasifying asphaltenes, the heaviest part of the barrel. Once this transition is complete we expect the PSC(TM) yields to increase to approximately 80%. In periods when the Upgrader is shut down, we will continue to produce bitumen and blend it with diluent for sale.

While we expect periods of downtime in the ramp-up phase we anticipate that the reliability of operations will continue to improve. We anticipate Upgrader capacity during ramp-up will be capable of processing all of the forecasted SAGD volumes and we expect the Project to reach full capacity of approximately 58,500 bbl/d of PSC(TM) and other products in late 2010.

CAPITAL EXPENDITURES

As Phase 1 of the Long Lake Project is essentially complete the remaining capital costs relate to the completion of the steam expansion project, expected later this year, and the ash processing unit in 2010. The remaining cost to complete these two projects is approximately $34 million net to OPTI, most of which will be incurred in 2010.

The table below identifies historical expenditures incurred by us in relation to the Project, other oil sands activities and other capital expenditures.

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Three months Six months

ended ended

June 30, June 30, Year ended

$ millions 2009 2009 2008

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Long Lake Project - Phase 1

Upgrader & SAGD $ 6 $ 19 $ 480

Sustaining capital 9 30 60

Capitalized operations - 18 32

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Total Long Lake Project 15 67 572

Expenditures on future phases

Engineering and equipment 5 10 64

Resource acquisition and

delineation 2 20 70

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Total oil sands expenditures 22 97 706

Capitalized interest - 29 139

Other capital expenditures - (19) 35

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Total cash expenditures 22 107 880

Non-cash capital charges - - 4

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Total capital expenditures $ 22 $ 107 $ 884

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For the three months ended June 30, 2009 we incurred capital expenditures of $22 million. Our $6 million share of the Phase 1 expenditures for Upgrader and SAGD were primarily related to the ongoing construction of the steam expansion project. Sustaining capital expenditures of $9 million related primarily to engineering and resource delineation for future Phase 1 well pads and SAGD optimization. We discontinued capitalizing our share of the net Upgrader operations on April 1, 2009.

For the three months ended June 30, 2009, we incurred expenditures of $5 million for engineering and $2 million for resource acquisition and delineation for future phases.

RESULTS OF OPERATIONS

Three months and six months ended June 30, 2009

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Three

months Six months

Three months ended Six months ended

ended June 30, ended June 30,

June 30, 2008 June 30, 2008

$ millions 2009 (as revised) 2009 (as revised)

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Revenue $ 34 $ - $ 63 $ -

Expenses

Operating expenses 39 - 67 -

Diluent and feedstock

purchases 20 - 49 -

Transportation 3 - 6 -

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Net field operating

margin (loss) (28) - (59) -

Interest, net 42 (1) 61 (3)

General and

administrative 7 4 13 8

Financing charges 1 1 1 1

Loss on disposal

of assets 1 - 2 -

Foreign exchange

translation loss (gain) (171) (11) (96) 45

Realized loss (gain)

on hedging instruments (11) 3 (35) (4)

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Income (loss) before

non-cash items 103 4 (5) (47)

Net unrealized loss

(gain) on hedging

instruments 137 40 115 (4)

Depletion, depreciation

and accretion 7 1 11 2

Future tax (recovery) (32) (8) (25) (10)

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Net income (loss) $ (9) $ (29) $ (106) $ (35)

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Comparative amounts for the three and six months ended June 30, 2008 have been revised to reflect the retroactive adoption of CICA Handbook section 3064 "Goodwill and Intangible Assets", effective January 1, 2009.

Operational Overview

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Our overall operating results in the second quarter of 2009 and the six months ended June 30, 2009 reflected the inconsistent performance of SAGD and Upgrader operations and relatively low SAGD volumes. During the second quarter, we resolved some of the previously identified water treating issues, which is expected to lead to higher steam volumes and corresponding bitumen volumes. Both HLS units are operating with additional supplementary heat. The operating performance of the Upgrader improved considerably during the second quarter as the Upgrader had an on-stream factor of 46% during the quarter compared to 33% in the first quarter. On-stream factor is a measure of the period of time that the Upgrader is producing PSC(TM) and it is calculated as the percentage of hours the Hydrocracker Unit in the Upgrader is in operation. As previously announced, a project to replace valves and conduct maintenance on the water treatment plant during the third quarter of 2009 is planned, which is expected to increase steam production. We expect that the cost of these activities will not be significant but will result in scheduled downtime in the third quarter, reducing bitumen and PSC(TM) production. As steam generation increases, we expect that all wells will be converted to production mode.

We define our net field operating margin as revenue related to petroleum products and power sales minus operating expenses, diluent and feedstock purchases and transportation costs. See "Non-GAAP Financial Measures". This margin was a loss of $28 million during the three months ended June 30, 2009 as compared with a loss of $31 million in the preceding quarter. Our net field operating margin improved during the second quarter as a result of higher sales volumes and prices for PSC(TM), lower diluent costs as a result of more on-stream time and lower SAGD operating costs. These improvements were offset by the inclusion in our net field operating margin of $16 million for Upgrader operating costs (these costs were capitalized in the first quarter). As most of our SAGD and Upgrader operating costs are fixed, we expect that rising SAGD volumes and an increasing Upgrader on-stream factor will lead to improvements in our net field operating margin. This expected improvement would result in higher PSC(TM) sales and lower diluent costs.

The results of operations for the six month period ended June 30, 2009 include SAGD results for the entire period, as well as Upgrader results from April 1, 2009, which is the date we determined the Upgrader to be ready for its intended use.

Revenue

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For the three months ended June 30, 2009, we earned revenue of $34 million. Our share of PSC(TM) sales averaged 1,700 bbl/day (Q1 2009: 700 bbl/day was included in capitalized operations) at an average price of approximately $65.50/bbl, while our share of Premium Synthetic Heavy (PSH) averaged 4,400 bbl/day (Q1 2009: 7,700 bbl/day) at an average price of approximately $58.50/bbl. During the second quarter we received pricing in-line with or better than other synthetic crude oils. Due to the premium characteristics of our PSC(TM), we expect to increase the premium we receive relative to other synthetic crude oils as production, and therefore the availability of marketed PSC(TM), increases. In the same period, we had power sales of $1 million representing 17,167 megawatt hours (MWh) of electricity sold at an average price of approximately $33/ MWh.

For the six months ended June 30, 2009, we earned revenue of $63 million, which was comprised of $51 million PSH sales, $10 million of PSC(TM) sales and $2 million of power sales. There was no revenue recorded in the three and six month periods ending June 30, 2008 as the facilities were not considered to be ready for their intended use.

Expenses, gains and losses

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(x) Operating expenses

Operating expenses were $39 million for the three months ended June 30, 2009 and $67 million for the six months ended June 30, 2009. For both periods, operating expenses were primarily comprised of natural gas, maintenance, labour and operating materials and services. Operating expenses increased from $28 million in the first quarter to $39 million because we ceased capitalization of Upgrader operations effective April 1, 2009. In the second quarter, operating expenses improved compared to the first quarter as we benefited from lower natural gas costs due to lower prices, as well as reduced maintenance costs related to start-up activities. There were no operating expenses recorded in the corresponding periods in 2008. These costs were capitalized as the facilities were not considered to be ready for their intended use.

(x) Diluent and feedstock purchases

Diluent and feedstock purchases were $20 million for the three months ended June 30, 2009 and $49 million for the six months ended June 30, 2009. Diluent costs in the three months ended June 30, 2009 are lower than the three months ended March 31, 2009 as a result of a higher on-stream factor for the Upgrader and a portion of our PSC(TM) production was used as diluent for our bitumen production. Diluent purchases averaged approximately $69/bbl in the second quarter, while the year-to-date average was approximately $66/bbl. There were no diluent or feedstock purchases included in operations in the corresponding periods in 2008 since these costs were capitalized as the facilities were not considered to be ready for their intended use.

(x) Transportation

Transportation expenses were $3 million for the three months ended June 30, 2009 and $6 million for the six months ended June 30, 2009, primarily related to pipeline costs associated with PSC(TM) and PSH sales. There were no transportation expenses included in operations in the corresponding periods in 2008 since these costs were capitalized as the facilities were not considered to be ready for their intended use.

(x) Net interest expense

Net interest expense was $42 million for the three months ended June 30, 2009 and $61 million for the six months ended June 30, 2009. Interest expense increased in the second quarter as we no longer capitalize interest attributable to the Upgrader. In 2008, $1 million of interest income was earned in the three months ended June 30, 2008, while $3 million of interest income was earned in the six months ended June 30, 2008. There was no interest costs included in expenses in the corresponding periods in 2008, as this cost was capitalized since the facilities were not considered to be ready for their intended use.

(x) General and Administrative (G&A)

For the three months ended June 30, 2009 G&A expenses increased to $7 million from $4 million in the corresponding period in 2008. For the six months ended June 30, 2009, G&A expenses increased to $13 million from $8 million in the corresponding period in 2008. The increase for the three and six month period is due to one-time transition costs related to the re-organization of OPTI after the asset sale to Nexen.

(x) Financing charges

For the three and six months ended June 30, 2009, financing charges were $1 million, which is consistent with the corresponding periods in 2008. Financing charges in 2009 relate to the evaluation of financing alternatives, while financing charges in 2008 relate to issuance of new debt facilities.

(x) Loss on disposal of assets

Loss on disposal of assets was $1 million for the three months ended June 30, 2009 and $2 million for the six months ended June 30, 2009. The loss relates to information technology write offs in the second quarter and costs incurred during the first quarter related to the asset sale to Nexen. There were no asset disposals in the corresponding periods in 2008.

(x) Foreign exchange gain or loss

The gain or loss is comprised of the re-measurement of our U.S.- dollar-denominated long-term debt and cash.