April 27, 2011 / 12:42 PM / in 6 years

UPDATE 2-Opti sees Long Lake oil sands output lagging annual target

* Q1 loss/shr C$0.09 vs loss/shr C$0.15 year ago

* Q1 revenue up 26 pct at C$63 mln

* Sequential production down 9 pct on water treatment issues

* Does not expect to meet 38,000-45,000 bbl/d 2011 output view

* Needs to conclude strategic review to meet 2012 financial commitments (Adds output lag reasons in lead, details on strategic review, long-term debt in para 7)

April 27 (Reuters) - First-quarter loss at Opti Canada narrowed, but the company expects annual output to lag targets due to water treatment and other operational glitches.

While quarterly bitumen production rose 36 percent to 25,500 barrels per day (bbl/d), which led to a smaller quarterly loss, sequential output fell about 9 percent.

The company, which has a 35 percent stake in Nexen Inc’s Long Lake oil sands project, does not expect to meet its 38,000-45,000 barrels per day (bbl/d) production target for 2011.

Nexen, which posted a 43 percent rise in quarterly profit earlier on Wednesday, expects production to increase in the second half of this year. [ID:nL3E7FR296]

Output from the C$6.1 billion ($6.41 billion) Long Lake project, Opti’s main asset, has remained well below its 72,000 bbl/d capacity as Nexen struggles with a series of equipment glitches and reservoir issues at the site.

The company warned last month that production had been hit again because of water treatment problems.

Opti, whose long-term debt was a little over $2.57 billion at the end of 2010, said a conclusion to its strategic review, which began in November 2009, was necessary to meet its 2012 financial commitments.

First-quarter loss narrowed to C$27 million, or 9 Canadian cents a share, from C$41 million, or 15 Canadian cents a share, last year.

Opti’s shares closed at 28.5 cents on the Toronto Stock Exchange on Tuesday. ($1 = 0.952 Canadian Dollars) (Reporting by Gowri Jayakumar in Bangalore; Editing by Prem Udayabhanu)

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