Opti puts itself up for sale or merger

Calgary-based Opti Canada Inc., a junior player in the oilsands, announced Wednesday it was putting itself up for sale or merger.

Cash-strapped Opti, a minority partner in the Long Lake project in northern Alberta, said it is also open to selling assets, offers for raising new capital or getting better terms on its bank credit line.

"Opti believes that the current trading price of its common shares does not reflect the value of its assets," the company said in a statement.

Andrew Potter, an analyst with Swiss bank UBS, said the company might have "a slight preference" towards selling some of its undeveloped properties rather than selling itself outright.

Potter said this would solve Opti's problem of not having enough cash to fund future phases of the Long Lake project and also raise enough cash to survive until oil prices head higher.

Opti shares were trading up 20 cents at $2.10 on the Toronto Stock Exchange Wednesday.

Opti's Long Lake partner, Nexen Inc., in December increased its share to 65 per cent, by buying out an additional 15 per cent stake from Opti.

The two companies put production at the project on hold earlier this year due to problems with water treatment equipment.

Although production has resumed, it is still 80 per cent below capacity because of continuing technical problems and is not expected to make its target date of late 2010 for full production.