March 15, 2012 / 3:55 PM / 8 years ago

UPDATE 1-Crescent Point buys Reliable Energy to boost Bakken output

* Raises 2012 output for the third time

* Acquisition to boost Bakken shale output

* Q4 loss widens on derivatives

* Reliable shares up 15 pct

By Aftab Ahmed

March 15 (Reuters) - Crescent Point Energy said it will buy Reliable Energy for C$79.1 million to further boost output from the oil-rich Bakken shale in southwest Saskatchewan, and raised its 2012 production outlook for the third time this year.

Crescent, Canada’s No.5 independent oil producer and a pioneer in the Bakken shale, bought some PetroBakken Energy Ltd assets in February and acquired Wild Stream Exploration for C$770 million in January.

The Reliable Energy deal prompted Crescent to raise its 2012 production outlook to above 86,500 boe/d from its earlier view of 86,000 boe/d.

Crescent raised its year-end exit production forecast by about 1,000 boe/d to about 94,000 boe/d.

Reliable Energy has proved plus probable reserves of 4.1 million barrels of oil equivalent as of Dec. 31, 2011, and the oil explorer has identified 36 net locations for drilling.

Crescent, which already holds 12.8 percent stake in Reliable, will pay Reliable shareholders 0.00794 of its stock for each share. The deal represents a premium of 18 percent to Reliable stock’s Wednesday close of 30 Canadian cents.

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

Crescent will also assume Reliable’s debt of about C$20 million.

Reliable’s shares rose about 15 percent to 35 Canadian cents on Thursday on the Toronto Venture Exchange.


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

The company’s fourth-quarter production rose 16 percent to 81,210 boe/d.

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