Crescent increases rail use

Crescent Point Energy, Canada’s fifth largest independent oil producer and a leading player in the unconventional resource plays of southern Saskatchewan, is joining the growing lineup of Bakken producers expanding their use of rail to ship production to refineries and markets.

The company said the use of rail will help it avoid pipeline constraints and gain access to more markets across North America, including the U.S. Midwest, Texas Gulf Coast and the east and west coasts of the U.S. and Canada.

It expects to move an average 16,000 barrels per day of light oil by rail this year, double its 2011 volumes, said Trent Stangl, vice president of marketing, saying rail “really allows us to diversify our pricing and manage pipeline risk.”

Crescent Point is joining a growing movement to bypass pipeline bottlenecks that has Canadian Pacific Railway planning to increase its Bakken shipments to 125,000 bpd from 890 bpd in 2008 and 23,150 bpd last year.

Crescent Point confirmed March 15 that it is buying out the remaining 88 percent of Reliant Energy for C$99 million, including debt of C$20 million, to raise its 2012 year-end production by 1,000 boe per day to 94,000 boe per day, adding 4.1 million boe of proved plus probable reserves to its current 425 million boe, weighted 92 percent to oil.

The company’s capital spending for 2012 is unchanged at C$1.2 billion, following its acquisition of Wild Stream Exploration in January for C$770 million and several PetroBakken Energy assets in February.

—Gary Park