CALGARY —Crescent Point Energy will be doubling the volume of oil it moves by rail this summer to bypass pipeline constraints and access more markets, the oil producer said.

Crescent Point, which reported a 45 per cent increase in fourth quarter cash flow Thursday, said using the railroad to move Bakken light oil barrels would be a break-even proposition under normal pricing scenarios.

But not enough pipe and large spreads between Canadian crude prices to U.S. benchmark West Texas Intermediate and Europe’s Brent make the economics much friendlier, a company executive said.

“The beauty of once it’s on rail is that it can go anywhere in North America,” Stangl said, during a conference call Thursday. “It allows us to access markets outside of the (U.S. Midwest) market, so we can get to the Gulf Coast, we can get to the east coast, we can get to the west coast, both Canadian and U.S. markets. It really allows us to diversify our pricing and manage pipeline risk.”

Crescent Point, Canada’s fifth largest independent oil producer said it expected to increase rail shipments to 15,000 barrels per day to 16,000 bpd out of the Bakken play, stretching from North Dakota to Saskatchewan, by the summer, from current volumes of about 8,000 barrels per day.

The Calgary-based producer’s fourth quarter results exceeded analysts’ expectations with record cash flow of $381.9 million, compared with $263.2 million a year prior,

“Overall, we saw results as a positive for the company as financials and operations came in ahead of expectations with cash flow per share totalling $1.32 per share,” said Matt Donohue, with UBS Research, in a morning report. “This compares to UBS estimated forecast of $1.25 per share and consensus $1.20 per share.”

Donohue attributed the difference to slightly higher than expected production volumes, stronger pricing and lower royalty charges.

Production during the quarter rose to 82,500 barrels per day from an expected 80,000 bpd.

Also on Thursday, Crescent Point announced it would buy out remaining shares of Reliant Energy for $99 million, boosting its 12 per cent stake in the junior oil and gas producer to 100 per cent.

The deal, which includes $20 million in assumed debt, prompted the company to boost its 2012 average production outlook to 86,500 bpd from 86,000 bpd because of the acquisition.

The company said its 2012 exit production rate also is expected to rise, reaching more than 94,000 barrels of oil equivalent per day from 93,000 boe day.

The company’s capital expenditures budget for 2012 remains unchanged at $1.2 billion.

“This deal was just about one-third of their quarterly cash flow, and I wouldn’t say this was a sizable acquisition,” said Eric Nuttall, the portfolio manager of Canada’s Sprott Energy Funds. He thinks the company could buy more during the year.

The Reliant acquisition is the third buy for the company this year, after taking over several PetroBakken Energy Ltd. assets in February and acquiring Wild Stream Exploration for $770 million in January.

Crescent Point will pay Reliable shareholders 0.00794 of its stock for each share. The deal represents an 18-per cent premium to Reliable stock’s Wednesday close of 30 cents.

The company’s net loss widened to $86.2 million, or 30 cents a share, from $50.9 million, or 19 cents a share, a year ago. The company recorded an unrealized derivative loss of $271.4 million in the quarter.

With files from Reuters

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