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The Long Lake project in Alberta, a joint venture of Opti Canada and Nexen

OPTI Canada Inc. has hired a restructuring specialist, sending markets a startling signal about the financial prospects of the debt-burdened oil sands producer.

Shares in OPTI plunged 28 per cent Tuesday before being halted, as markets pounced on the latest evidence that the company may not stage the hoped-for rebound. The stock closed at 45 cents, down nearly 35 per cent.

Though Canada's oil sands have attracted hundreds of billions of dollars in global investments on the promise of massive crude reserves, OPTI's financial troubles serves as a warning that Fort McMurray's oil remains some of the world's most difficult to extract. The ongoing problems at the company's main asset, a struggling oil sands project named Long Lake, also underscores the fact that not all oil sands are created equal - and that some parts of Alberta's vast deposits of bitumen are far more challenging, and far less profitable, to unlock, even with oil near $100 (U.S.) a barrel.

OPTI said it hired New York's Lazard Frères & Co. LLC, the third investment bank it has brought on board since November, 2009, when it kicked off its so-called strategic review process with Scotia Waterous Inc. and TD Securities Inc. It said it retained Lazard Freres to help in the strategic review that could include asset sales, a sale of the company or other paths.

"Lazard will supplement the strategic review by providing advice on capital structure alternatives to address the company's overall leverage position," OPTI said.

OPTI owns 35 per cent of the Long Lake oil sands project, an expensive venture that has missed a string of production targets, putting additional pressure on the company's weak balance sheet.

"Hiring Lazard is clearly an admission by the company that it is becoming more nervous about its ability to [find]a buyer before it runs out of liquidity," Andrew Potter, an analyst at CIBC World Markets Inc., wrote in a research note.

Analysts and investors expect OPTI to run out of cash near the end of 2011, and say it will have difficultly raising money if the Long Lake project, which is operated by its partner Nexen Inc., does not improve. OPTI reports its fourth-quarter results Feb. 10.

"[OPTI]has to prove to the market that they can meet guidance and every year they haven't," said Dennis da Silva, a resource-fund manager at Middlefield Capital Corp. in Toronto.

Indeed, the Long Lake project reported production of 28,700 barrels per day in July. By December, that had increased to just 29,100, far below the 40,000 to 60,000 that had been promised by the end of 2010.

"If Long Lake production rates fail to improve from current levels there may not be enough asset value in the oil sands leases and upgrader to support any equity value," Randy Ollenberger, an analyst at BMO Nesbitt Burns, wrote in a research note.

He believes Lazard's new assignment means it is "unlikely" that OPTI will be able to sell itself or some of its assets in the "near term."

Nexen, which owns 65 per cent of Long Lake, is not necessarily OPTI's natural buyer, argued Phil Skolnick, managing director of equity research for Canaccord Genuity. Nexen has, in recent discussions, gone to pains to emphasize other parts of its portfolio - such as its North Sea holdings - have shown far better performance. Nexen has also stated publicly that it wants to have a partner on Long Lake.

"Their motto is that we're not the Long Lake company," Mr. Skolnick said.

Further, Jill MacRae, a vice-president at J. Zechner Associates Inc., a money management firm in Toronto, said Nexen may shy away from pouring more cash into a struggling project.

Investors punished OPTI last August, when it took on another $400-million (U.S.) in debt, which brought its total to $2.575-billion. That move was seen as evidence that a long-awaited sale of the company was not imminent, and its shares plunged to near-penny stock levels.

At the time, OPTI chief executive officer Chris Slubicki argued that the new debt bought time for production growth at Long Lake, the troubled oil sands projects whose difficulties in achieving a promised 72,000 barrels per day in bitumen production, have been the source of the company's woes.

"We want to ensure that we have the time to demonstrate the full value of our full project, and that's phase one and future expansions," he said then. "We want to make sure that we are not doing a transaction because we were forced to do one."

OPTI and Nexen officials did not return calls for comment.