Ok, just spent 2 hours going over OPC's numbers. I still believe they are a great investment at the current valuation of $0.70 but some risks do exist. Mainly, their ability to borrow more money, at this stage is very limited and that is why the sale to Nexen for 15% of the project but really, 30% of Opti's assets for 735M dollars.

How they spent that money:

85M was witheld by Nexen to cover Opti's share of JV capital requirements. So they basically have prepaid their share of 2009 capital expenditure.

150M was used to repay and cancel their 150M credit facility which was coming due in June 2009 for review.

400M was used to pay down their 500M LOC to about 86.5M. This LOC has now been reduced to 350M leaving them 263.5M available on this LOC.

They did not say where the other 100M went so I assume their general coffers. If this is the case, they are now sitting on 350M in cash, cash equivalent and receivables.

Operating lease equipments due in 2009 are for 9.4M and 3.25M for a total of 12.65M (based on 35% JV).

Accounts payable are 200M

Other expenses affecting cash in 2008: General&Admin: 17.6M-I assume 2009 will be the same for calculations.

So expenses for 2009 total: 230.25 (+ 85M prepaid to Nexen)

Cash on hand is 350M which should be sufficient but they are also sitting on 263.5M available room on their LOC.

Barring major delays in production, they should be a safe investment for the next 6 months (LOC facility is due Dec 15, 2011)but certain debt covenants can be assessed in the 3rd quarter of 2009.

If production continues to improve, they should have no problems staying within the debt covenants. Please keep in mind that no debt is due to be serviced till Dec 15th 2011.

So IMO, the Risk/Reward at the current valuation of 138M ($0.70 per share) is very good.

If I have made errors, please feel free to correct me.

Shorts have been covering since October 15th and have gone from 11.2M to only 5.4M as of Feb 28th 2009. I expect this number to decrease considerably on the March 15th report as this hard push down to $0.70 was probably orchestrated by them and they are covering at this oversold position.

All of course IMHO and please do your own DD before investing,

Glorieux