I think Opti will be successful. Once they start production and start generating revs, they will be a good solid company. Up until now, they have just been issuing shares of stock for cash to raise the 2.3 billion as their share of the project so far.
I like their ability to generate a good portion of the energy instead of buying natural gas. They appear to have a good, comprehensive plan to extract the bitumen. The water is recycled but I don't know the net fresh water that is used.
It is hard to compare Opti to Petrobank. Petrobank is much smaller. Their THAI process is much simpler because their end product is still unrefined bitumen. THAI and CAPRI are supposed to partially upgrade the bitumen so it will flow in pipelines with less diluents but it's still bitumen. Opti generates light sweet crude thru a complete extraction and refining process.
Petrobank does have many pluses. It's profitable right now. It growing it's conventional production rapidly so profits should increase. Columbia could turn out to be a monster because of the millions of acres they have tied up. The heavy oil in Columbia is similar to Venezuela. Lots of it. THAI could cheaply extract it. Finally Petrobank has two billion barrels of bitumen to extract from it's own Canada leases. If no one else buys THAI, Petrobank can still use it to extract their own bitumen/heavy oil from Canada and Columbia.
Long range, Petrobank obviously wants to license this THAI process around the globe. Much of the remaining oil in the world is heavy oil. This is a much cheaper and environmentally friendly way to extract it. Again, much simpler than SAGD. Much less capital intensive than Opti.
The tar sands operation of the future could be THAI on the extraction and OPTI processing the bitumen into light sweet. Best of both worlds. I think THAI has many uses globally because it's less capital intensive and can be bootstrapped much easier. In order to use OPTI, you have to spend the 2+ billion up front for all the equipment, processing equipment, etc before you can start extracting. THAI can be started small and the process can be ramped up as cashflow increases.
Petrobank proved a small company can do it. OPTI and NEXEN are not small companies. They are spending 2.3 billion so it better work. Petrobank has probably spent a couple hundred million to get this far and the 3 test wells definitely didn't cost much.
As an investment, I still like Petrobank. Multiple ways to generate revs and profits. If Columbia hits but THAI doesn't work, they can use SAGD and extract the bitumen. If THAI doesn't work, they still have over two billion barrels of bitumen in Canada. If THAI doesn't work, they keep drilling conventional oil wells and increase from 5200 to 10,000bpd in 2007. If all three of Petrobank's rev generators work, this is a $100 stock, maybe more. Minimal ngas, no water used. This has got to be a preferred environmental choice to extract the tarsands. So far the market appears to agree. Pbg is doing better than opti. Bobwins
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