Nicky Henderson's charge was an odds-on favourite to beat the Jonjo O'Neill-trained Taquin Du Seuil when the pair met at Prestbury Park in November, but in a race run at a crawl, the latter won by a neck in a sprint finish.
Oscar Whisky returned to Cheltenham a month later and made every yard of the running to get off the mark over fences, getting the better of the talented Wonderful Charm.
Taquin Du Seuil was last seen finishing third behind Hinterland in the Grade One Henry VIII Novices' Chase at Sandown.
Walters said: "I spoke to Nicky on Monday and he tells me Oscar is in really good form. We've got Jonjo's horse to beat and I'm sure Tony McCoy [Taquin Du Seuil's jockey] will be hoping the race plays out the same way as it did the last time they met, but it won't, I can assure you. I would imagine we'll have to go and try and make all the running as he did on his last run. It's not his ideal way of running, but Oscar can do that."
The pair feature among four runners in the Grade Two Cheltenham Pony Club Raceday Novices' Chase, better known as 'The Dipper'.
Walters hinted Oscar Whisky is more likely to run in the Jewson Novices' Chase at the Cheltenham Festival than come back in distance for the Arkle.
He said: "I think we'll stick at two and a half miles. That is his best trip. I think we'll just take it one race at a time. As soon as you start making definite plans things seem to start going wrong."
Another of Walters' horses, the part-owned Mountainous, could aim to secure his second National triumph in Wales at Ffos Las in February. The Richard Lee-trained gelding claimed a pulsating renewal of the Coral Welsh Grand National at Chepstow last week, beating Hawkes Point by a head.
Walters is now looking forward to seeing his charge line up in the West Wales National on February 1 at the track he owns.
He said: "He has come out of the race absolutely spot-on and I think he'll probably go to Ffos Las now for a race on Welsh Champion Hurdle day. The handicapper has put him up 12lb for winning the other day, but he has won his big one now and I'm quite happy with that."
Meanwhile, John Quinn has his eye on some of the money available at Musselburgh's valuable meeting with three raiders from his Malton yard making the journey to East Lothian.
The Irishman is double-handed in the £40,000 totepool Mobile Hogmaneigh Hurdle Handicap with Hidden Justice and Zaplamation among 15 declarations for the two-mile feature.
Quinn, who will be at Cheltenham to saddle crack novice hurdler Racing Pulse, said: "Hidden Justice has won two of his three starts over hurdles and he was down the field behind Our Connor in the Triumph Hurdle. He has been training really well but I just wonder how well handicapped he is and that's a question we will find out at Musselburgh.
"Zaplamation is in good form after winning his first two races of the campaign at Wetherby. He'll need to improve again but I'd say he's got to have a chance in a very open race."
Quinn's remaining runner is Triumph Hurdle and Aintree hope Rutherglen, who puts his unbeaten record on the line in the open toteplacepot First Foot Juvenile Hurdle.