07/20/2011 07:26 EDT | Updated 09/19/2011 05:12 EDT

OPTI Canada, Oilsands Producer, Sold To China's CNOOC For $2.1-Billion

AFP/Getty File

THE CANADIAN PRESS -- CALGARY - Chinese oil company CNOOC Ltd. is making a major thrust into the Canadian oilsands business by agreeing to purchase struggling Calgary-based oilsands producer Opti Canada Inc. (TSX:OPC) for $2.1 billion.

The announcement early Wednesday comes a week after Opti Canada filed for a court-supervised restructuring designed to transfer ownership of the oilsands developer to creditors.

Opti has been undergoing a strategic review for well over a year, in the hopes a corporate or asset sale would help it address its debt troubles.

Under terms of the agreement, CNOOC Ltd. (China National Offshore Oil Corp.) will pay $1.179 billion to lenders who hold Opti's second lien notes and assume $825-million of first lien notes.

The Chinese company will also pay $37.5 million to backstop parties and $34 million to shareholders.

CNOOC Ltd. is China's largest producer of offshore crude oil and natural gas and one of the largest independent oil and gas exploration and production companies in the world.

It has a 35 per cent stake in the Long Lake oilsands project, which is operated by Nexen Inc. (TSX:NXY), one of Canada's largest oil and gas producers.

The Opti board of directors has voted unanimously in favour of the transaction with CNOOC, saying it is in the best interest of the company.

"CNOOC Ltd. is a technically experienced and well-capitalized company that is equipped to support further development at Long Lake and future expansions in the Canadian oil sands," said Opti president and CEO Chris Slubicki in a statement.

Yang Hua, the CEO of CNOOC, said the transaction strengthens his company's Canadian presence in the oilsands business.

"We believe that upside potential of the assets will facilitate local energy supply and our production growth in the long term."

The sale is expected to close in the fourth quarter of 2011, pending regulatory approvals in Canada and China.

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