Growth Evolution - Crescent Point Energy€¦ · company in 2001, and through conversion to a trust in 2003, ... (“Innova”) for $400 million in October and Pilot Energy Ltd. (“Pilot”)

Growth & EvolutionCrescent Point Energy Trust • Annual Report 2007

Crescent Point’s business plan has remained consistent since 2001, the three key

elements of which are a strong balance sheet and effective risk management, a

defined acquisition strategy and the application of exploitation and development

methods to maximize potential from existing focus areas.

In 2007, the success of this strategy led to an 86 percent increase in net asset

value (“NAV”) per unit, an 85 percent increase in year end reserves, year end

production of 33,351 boe/d and a low risk development drilling inventory of

13 years.

Crescent Point’s exploitation strategy evolved in 2007 to include significant Crown

and freehold land acquisitions and step out drilling successes that significantly

expanded the size of the southeast Saskatchewan Bakken light oil resource play.

Crescent Point also evolved to assume a leadership role in its sector with the

implementation of corporate governance Bill 198. The Trust joined the Board

of Governors for the Canadian Association of Petroleum Producers (“CAPP”)

and played a prominent role in preparing industry responses to the federal

trust taxation legislation and to changes in the Alberta royalty system. The Trust

was also named Alberta’s Best Workplace for Benefits, Perks and Incentives as

awarded by AlbertaVenture Magazine.

With a proven management team, a strong balance sheet and a focused reserve

base, Crescent Point is well positioned for sustained growth in value over the

coming years.

Focusing On Our Evolution

01 Financial and Operating Highlights

02 President’s Letter to Unitholders

08 Operations

14 Reserves

17 Land Holdings

18 Risk Management & Hedging Strategy

19 Corporate Governance

20 Environment, Health & Safety

21 Management’s Discussion and Analysis

45 Management’s Responsibility for Financial Reporting

46 Auditors’ Report

47 Consolidated Financial Statements

50 Notes to Consolidated Financial Statements

IBC Corporate and Investor Information

TABLE OF CONTENTS

NOTICE OF ANNUAL GENERAL MEETINGThe Annual General Meeting of unitholders of Crescent Point Energy Trust will be held on Friday, May 30, 2008 at 10:00 a.m. in the Lecture

Theatre Room of The Metropolitan Conference Centre of Calgary, 333 – 4th Avenue SW, Calgary, Alberta. Unitholders are encouraged to

attend the meeting and those unable to do so are urged to complete, sign and return their form of proxy mailed with this report.

ORGANIZATION DEFINITION

Throughout the Annual Report, Crescent Point Energy Trust and its subsidiaries, predecessor companies and related entities are referred to as “Crescent Point”, or the “Trust”.

VOLUME REPORTING

Barrel of oil equivalent (“boe”) figures for the periods presented throughout this report are expressed at a conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil. This conversion ratio approximates relative heating values, and is the generally accepted ratio used by Canadian oil and gas companies, oil and gas trusts and investment analysts.

Proven Track Record of Growth

NAV PER UNIT & ENTERPRISE VALUE

0

700

1,400

2,100

2,800

3,500

$0.00

$8.40

$16.80

$25.20

$33.60

$42.00

Enterprise ValueNAV per unit at 5 percent

Ente

rpri

se V

alue

($M

M)

NAV

per

uni

t ($

/uni

t)

2003

2004

2005

2006

2007

2003

2004

2005

2006

2007

$m

illio

ns

0

72

144

216

288

360

2003

2004

2005

2006

2007

(boe

/d)

0

5,000

10,000

15,000

20,000

25,000

30,000

2003

2004

2005

2006

2007

(pro

ved +

pro

bab

le)

mm

boe

0

36

72

108

144

180

CASh FLow GRowTh ($mm) PRodUCTIoN GRowTh (boe/d) RESERVES GRowTh (mmboe)

AR | 07 Crescent Point Energy Trust �

FINANCIAL AND OPERATING HIGHLIGHTS($000s except trust units, per trust unit and per boe amounts) 2007 2006 % Change

Financial

Cash flow from operations (1) 355,910 189,135 88

Per unit (1) (2) 3.51 2.98 18

Net income (loss)(3) (32,167) 68,947 (147)

Per unit (2) (3) (0.32) 1.05 (130)

Cash distributions 245,108 150,277 63

Per unit (2) 2.40 2.40 -

Payout ratio (%) (1) 69 79 (10)

Per unit (%) (1) (2) 68 81 (13)

Net debt (1) (4) 650,088 227,905 185

Capital acquisitions (net) (5) 1,068,406 507,929 110

Development capital expenditures 227,923 109,995 107

Weighted average trust units outstanding (mm)

Basic 100.7 61.5 64

Diluted 102.1 63.6 61

Operating

Average daily production

Crude oil and NGLs (bbls/d) 24,349 17,417 40

Natural gas (mcf/d) 22,610 19,833 14

Total (boe/d) 28,117 20,723 36

Average selling prices (6)

Crude oil and NGLs ($/bbl) 67.33 60.03 12

Natural gas ($/mcf) 6.52 6.33 3

Total ($/boe) 63.55 56.52 12

Netback ($/boe)

Oil and gas sales 63.55 56.52 12

Royalties (11.59) (11.90) (3)

Operating expenses (9.25) (9.18) 1

Transportation (1.73) (1.35) 28

Netback prior to realized financial instruments 40.98 34.09 20

Realized loss on financial instruments (0.96) (4.01) (76)

Netback 40.02 30.08 33

(1)Cashflowfromoperations,payoutratioandnetdebtaspresenteddonothaveanystandardizedmeaningprescribedbyGAAPand,therefore,maynotbe comparablewiththecalculationofsimilarmeasurespresentedbyotherentities.

(2) Theperunitamounts(withtheexceptionofperunitdistributions)aretheperunit–dilutedamounts.Thenetincomeandcashflowperunit–diluted amountsexcludethecashportionofunit-basedcompensation.

(3) NetincomefortheyearendedDecember31,2007was$73.3million,excludingunrealizedfinancialinstrumentlossesof$105.4million.

(4) Netdebtincludesworkingcapitalandlongterminvestments,butexcludestheriskmanagementliabilitiesandassets.

(5) Capitalacquisitionsrepresenttotalconsiderationforthetransactionsincludingbankdebtandworkingcapitalassumed.

(6) Theaveragesellingpricesreportedarebeforerealizedfinancialinstruments.

2003

2007wastheTrust’smostsuccessfulyeartodateandrepresentsasixthstraightyearofsolidyearoveryeargrowth inreserves,production,cashflowandnetassetvalue.

TheTrustincreaseditsnetassetvalue(“NAV”)perunitby 86percentandcorporateyearendreservesby85percent,grewitslowriskdevelopmentdrillinginventorytomorethan13years,establishedandconsolidatedadominantpositioninthelargestconventionallightoildiscoveryinwesternCanadainmorethan50years,andprovidedtoitsunitholdersatotalreturnof55percent,thehighestintheoilandgasincometrustsector.

2007alsomarkedseveralmilestonesintheevolutionoftheTrust.CrescentPoint’senterprisevaluevaultedto$3.5billionbyyearend2007from$1.5billionattheendof2006.Averageproductiongrewby36percentyearoveryear,exitingtheyearabovethe30,000boe/dthresholdforthefirsttimeat33,351boe/d.CrescentPoint’sannualcapitaldevelopmentbudgetexceeded$200millionandtheTrustacquiredmorethan$1billionofassets,principallyinthesoutheastSaskatchewanBakkenlightoilresourceplay.

Inthepastyear,CrescentPointassumedaleadershiproleintheindustryonseveralfronts.TheTrustbecameanindustryleaderintheimplementationofcorporategovernanceBill198.CrescentPointalsojoinedtheBoardofGovernorsfortheCanadianAssociationofPetroleumProducers(“CAPP”).Asaresultofthis,theTrustplayedaprominentroleinpreparingindustryresponsestothefederaltrusttaxationlegislationandtochangesintheAlbertaroyaltysystem.TheTrustwasalsonamedAlberta’sBestWorkplaceforBenefits,PerksandIncentivesasawardedbyAlbertaVentureMagazine.

Sinceinceptionasajuniorexplorationandproductioncompanyin2001,andthroughconversiontoatrustin2003,CrescentPoint’sbusinessplanhasremainedunchanged,withacommitmenttogrowthandsustainabilitybuiltonthecorefundamentalsofhighquality,largeresourceinplaceassets,astrongbalancesheet,andeffectiveriskmanagement.ThisbusinessapproachhasprovidedconsistentyearoveryeargrowthwithpredictableandsustainabledistributionswhilepositioningtheTrustfortremendouslongtermgrowthinvalue.

TrustestablishedthroughreorganizationofCrescentPointEnergyLtd.andTappitResourcesLtd.

PRESIDENT’SLETTERTOUNITHOLDERS

� Crescent Point Energy Trust AR | 07

5,999boe/dannouncedproductionQ3 �003

2004

In2007,theTrustfocuseditsacquisitions,explorationandexploitationeffortsontheBakkenlightoilresourceplayinsoutheastSaskatchewan,thesecondlargestconventionallightoilpooleverdiscoveredinwesternCanada.CrescentPointsecuredadominantpositionintheplaywiththe$628millionacquisitionofMissionOil&GasInc.(“Mission”)inFebruaryof2007.TheTrustaggressivelyconsolidateditspositionintheplaywiththefollowupacquisitionsofInnovaExplorationLtd.(“Innova”)for$400millioninOctoberandPilotEnergyLtd.(“Pilot”)for$76millioninJanuaryof2008.Duringthistimeperiod,theTrustgrewitsundevelopedBakkenlandholdingsbymorethan150percentfrom143netsectionswithMissionto363netsections,drilled88(60.0net)Bakkenhorizontalwellswitha100percentsuccessrate,andgrewitsBakkenproductiontomorethan12,000boe/d.

Overthepast12months,CrescentPointaggressivelypursuedastepoutdrillingexplorationprogramintheBakken,increasingestimatesofthepool’ssizefrom1.0billionbarrelsoforiginaloilinplace(“OOIP”)tomorethan4.0billionbarrels.TheTrust’sdevelopmentdrillinginventoryintheplayincreasedto1,050netlocations.WithcontinuingimprovementstothefracturestimulationtechnologyutilizedintheBakkenplay,

theTrustdoubledperwellinitialproductionrates,increasedperwellreservesby17percent,andmorethantripledthenetpresentvalueofeachwell.

TheTrustspent$227.9milliononcapitaldevelopmentactivitiesin2007,drilling149(107.0net)wellswitha99percentsuccessrateandadding42.1millionboeprovedplusprobableoftechnicalreserveadditions.TheTrustreplaced410percentofproductionthroughitsdrillingactivitiesandrealizedfindinganddevelopmentcostsof$5.42perprovedplusprobableboeand$8.32perprovedboe,excludingchangesinfuturedevelopmentcosts.

During2007,CrescentPointcontinuedtopaya$0.20perunitmonthlydistributionforanaveragepayoutratioof68percent.Sinceinceptionasatrust,CrescentPointhasneverdecreaseditsmonthlydistribution,with52consecutivemonthsofdistributionsforatotalcumulativedistributionof$536million,or$9.66perunit.

Therobustoperationalandfinancialresultsof2007furtheremphasizetheTrust’sproventrackrecordofprovidingupsidegrowthpotentialwithabusinessmodelsustainableoverthelongterm.TodayCrescentPointisproducingmorethan35,000boe/d,a69percentincreaseovertheTrust’saverage

AR | 07 Crescent Point Energy Trust 3

ThreeacquisitionsinsoutheastareaofSaskatchewan-totalconsiderationof$64.5million

$14millioncorepropertyacquisitioninSoundingLakearea

9,527boe/dannouncedproductionQ32004


CrescentPointcompletes$82millionacquisitionofCapioPetroleumCorporation,addinganadditional1,750boe/d

8,874boe/dannouncedproductionQ12004

4CrescentPointEnergyTrustAR|07


2005

CrescentPointacquiresBulldogEnergyInc.,addinganadditional1,925boe/d

CrescentPointacquiresassetsinsouthwestSaskatchewanfortotalcashconsiderationof$257million.Theassetsproduceapproximately5,000boe/d

2006productionof20,723boe/d.TheTrusthasnearly1,400

netlowriskdevelopmentdrillinglocationsininventory,which

willallowtheTrusttomaintainandgrowproductionformore

than13years.

2007 HIGHLIGHTS

• IncreasedNAVperunit,discountedat5percent,to$40.21

from$21.61in2006andfrom$15.12in2005.TheTrust

hasincreasedNAVperuniteveryyearsinceinception;

• Increasedyearend2007reservesby85percentto167.5

millionboeprovedplusprobable,basedonindependent

thirdpartyevaluationsbyGLJPetroleumConsultantsLtd.

(“GLJ”)andSprouleAssociatesLtd.(“Sproule”);

• Replaced410percentofproductionthroughpositive

technicalanddevelopmentreserverevisionsof42.1million

boeprovedplusprobable.Thisisthesixthstraightyearand

arecordyearofstrongyearoveryearpositivetechnicaland

developmentreserverevisions;

• Achievedlow2007findinganddevelopment(“F&D”)costs,

excludingchangesinfuturedevelopmentcosts,of$5.42

perprovedplusprobableboeand$8.32perprovedboeof

reserves.Thisequatestoaprovedplusprobablerecycle

ratioof7.6times;

• ReducedtheTrust’s6yearaverageF&D,excludingchanges

infuturedevelopmentcapital,to$6.96perprovedplus

probableboeand$10.17perprovedboe,whichequates

toaweightedaverageprovedplusprobablerecycleratioof

6.1times;

• Achievedlow2007finding,developmentandacquisition

costs,excludingfuturedevelopmentcosts,of$14.71per

provedplusprobableboeand$20.74perprovedboe.The

Trust’s6yearaverageFD&Acostsare$13.40perproved

plusprobableboeand$18.28perprovedboe;

• Completed9acquisitionsin2007andoneinJanuary

2008,addingapproximately12,400boe/dofproduction

and50.4millionboeofprovedplusprobablereserves;

• Executedarecorddevelopmentcapitalprogram,spending

$227.9million,whichincludedthedrillingof107.0netwells

withasuccessrateof99percent.Throughits2007capital

developmentprogram,theTrustaddedmorethan7,000

boe/dofinitialinterestproduction;

CrescentPointannouncesfourseparatesoutheastSaskatchewanacquisitions,addingatotalof1,925boe/d

Crescent Point announces consolidationacquisitionwithassetsatJohnLake,Albertaand insoutheasternSaskatchewan

12,530boe/dannouncedproduction in Q32005

10,783boe/dannouncedproduction in Q12005


AR|07CrescentPointEnergyTrust5


2006

• Acquired115netsectionsofundevelopedBakkenlandthroughastrategicCrownandfreeholdlandacquisitionprogram;

• Increasedcashflowto$355.9million($3.51per unit-diluted)from$189.1million($2.98perunit-diluted)in2006,ayearoveryearincreaseof88percent;

• Maintainedmonthlydistributionsof$0.20perunit,resultinginanannualdistributionof$2.40perunit,unchangedfrom2006.TheTrust’soverallpayoutratiowas69percent(68percentonaperunit–dilutedbasis),downfrom79percent(81percentonaperunit–dilutedbasis)in2006;

• CompletedtwoboughtdealequityfinancingsinSeptember2007andJanuary2008,totaling14.1milliontrustunitsgeneratinggrossproceedsof$290.1million.TheTrustissued31.8milliontrustunitsvaluedat$567.6millionaspartoftheplansofarrangementtoacquireMissioninFebruary2007andPilotinJanuary2008;and

• Maintainedanexcellentbalancesheetthroughouttheyear,withtheTrust’screditfacilityincreasingto$800millionin2007.For2008,theTrustforecastsnetdebtto12monthcashflowof1.0times.

Subsequent Event – Investment in Shelter Bay Energy Inc. and Acquisition of the non Bakken assets of Landex Petroleum Corp.

AspartoftheOctober31,2006federalgovernmentdecisiontotaxCanadianincometrustsin2011,thegovernmentrestrictedtheamountofequitythatcouldbeissuedbytrustsbetweenOctober31,2006andDecember31,2010withthecreationofSafeHarbourLimits,whicharedefinedasapercentageofOctober31,2006marketcapitalization.

ToallowtheTrusttocontinuetoexecuteitsbusinessplanwithintheconstraintsoftheSafeHarbourLimits,CrescentPointannouncedinJanuary2008a$60millioninvestmentinShelterBayEnergyInc.(“ShelterBay”),aprivatecorporationnotsubjecttotheequitygrowthconstraintsplacedonincometrusts.CrescentPoint’sinvestmentrepresentsa20percentinterestinShelterBay.CrescentPointwillprovideShelterBaywithmanagementandtechnicalexpertiseunderaTechnicalServicesAgreement,wherebyShelterBaywillleveroffCrescentPoint’sknowledgeandinfrastructuretofurtherconsolidateanddominatethesoutheastSaskatchewanBakkenplayandothercoreCrescentPointareas.

CrescentPointacquiresCanexEnergyInc.foratotalpurchasepriceof $85.6million

CrescentPointacquiresassetsinSaskatchewanandAlbertaforatotalconsiderationof$66.3million.Theassetsproduceacombinedproductionofapproximately900boe/d

CrescentPointacquiresapproximately950boe/dinPeaceRiverArch,AlbertaandinsoutheastSaskatchewan

CrescentPointannounced amergerwithMissionOil&GasInc.fortotalconsiderationofabout$628million.TheMissionassetsproduceabout 7,000boe/d

21,305boe/dannouncedproduction in Q3 �006


25,291announcedproduction in �007 Q�

CrescentPointannouncesacquisitionofPilotEnergyLtd.foratotalconsiderationof$76million.CrescentPointacquiresapproximately1,000boe/doffocusedhighnetbackoil,50percentofwhichisinCrescentPoint’scoreViewfieldBakkenresourceplay.

AspartofitsinvestmentinShelterBay,CrescentPointhasagreedtofarmout22netsections,representingapproximately6percent,oftheTrust’sundevelopedBakkenlandtoShelterBay.CrescentPointexpectsShelterBaytodrill40grossBakkenhorizontalwellsonthesefarminlandsineachof2008and2009.CrescentPointretainsaninterestofupto50percentofeachwell,addingproduction,cashflowandreserveswithlimitedcapitalrequirements.

ItisanticipatedthatCrescentPointandShelterBaywillmergeoperationsinthefuturewhentheSafeHarbourLimitsonequityissuancearenolongerofrelevanceforCrescentPoint.

ConcurrentwiththeinvestmentinShelterBay,CrescentPointannouncedthatithadenteredintoanagreementtoacquireLandexPetroleumCorp.(“Landex”),aprivateoilandgascompanywithassetsinsoutheastSaskatchewan,fortotalconsiderationofapproximately$310million.Aspartoftheagreement,CrescentPointwillacquirethenonBakkenassetsofLandex,approximately1,500boe/d,for$80millionandShelterBaywillacquiretheBakkenassetsofLandex,approximately2,500boe/d,for$230million.

TheacquisitionisexpectedtocloseinlateMarch.

2008 OuTLOOk

CrescentPointhasaproventrackrecordandasoundbusinessplanbuiltonthethreekeydriversofasuccessfulenergytrust:aprovenmanagementgroupandBoardofDirectors,anexcellentbalancesheetandahighqualityreservebasewithextensiveopportunitiestoaddproductionandreserves.In2008,theTrustwillcontinuetoaggressivelyimplementitsbusinessplanandbuildonthesuccessesofthepastsixyears.

CrescentPoint’sdevelopmentcapitalbudgetfor2008hasbeensetat$225million,directedmoretowardsthedevelopmentoftheBakkenlightoilresourceplay.TheTrustanticipatesdrillingupto140(105.7net)wells,including79(65.5net)Bakkenhorizontalwells.TheTrustwillfracturestimulateupto92(77.2)BakkenhorizontalwellsandwillexpandtheViewfieldgasplanttoaccommodateincrementalgasandliquidsvolumesresultingfromthe2008Bakkendrillingprogram.CrescentPoint’sshareofShelterBaydrillingonfarminlandswilladdupto20netadditionalfracturestimulatedBakkenhorizontalwells.

Inaddition,theTrustwillcontinueactivedevelopmentprogramsatitscorepropertiesofManor,Tatagwa,Battrum/Cantuar,Worsley,SoundingLakeandGlenEwen.TheTrustwillspendupto$50milliononfacilities,landandseismic,primarilyinsoutheastSaskatchewancoreareas.

6 Crescent Point Energy Trust AR | 07


2007

CrescentPointacquiresInnovaExplorationLtd.foratotaltransactionvalueofapproximately$400million.CrescentPointacquiresapproximately4,300boe/dofhighquality,highnetbacklightoilandnaturalgasproduction,65percentofwhichisintheViewfieldBakkenresourceplay.

26,170announcedproduction in �007 Q�

Simveroeugiamipisdolorevercieugiam,senibhexelitautetatueratedolorevullaoreroduisnullandreetveleratexerosdipitadipeldoodionhenitdoloborediamilit.

Simveroeugiamipisdolorevercieugiam,senibhexelitautetatueratedolorevullaoreroduisnullandreetveleratexeros.

The$118millionacquisitionofBulldogEnergyInc.,inOctober2005Simveroeugiamipisdolorevercieugiam,senibhexelitautetatueratedolorevullaoreroduisnullandreetveleratexerosdipitadipeldoodionhenit

TheTrustanticipates2008cashflowtobeapproximately$527million,or$4.21perunit,fullydiluted,basedonforecastpricingofUS$92.50perbarrelWTI,US$1.00exchangerate,andCdn$8.00permcfAECO.Monthlydistributionsareanticipatedtoremainat$0.20perunitforapayoutratioof57percent.Productionisforecastat34,500boe/d.

TheTrustcontinuestoactivelymanageits3.5yearcommodityhedgingprogram,with60percentofvolumeshedgedin2008,57percentin2009,41percentin2010and2percentinthefirsthalfof2011.Hedgeinstrumentsutilizedintheprogramincludeswaps,collarsandputoptions,providingafloorofgreaterthanCdn$74perbarrel,withupsidepotentialifpricesstrengthenabovecurrentlevels.Thebalancesheetremainsstrong,withprojectednetdebtto12monthcashflowof1.0times.

CrescentPoint’smanagementbelievesthatwiththehighqualityreservebaseanddevelopmentinventory,excellentbalancesheetandhedgingprogram,theTrustiswellpositionedtocontinuegeneratingstrongoperatingandfinancialresultsanddeliveringsustainabledistributionsthrough2008andbeyond.

ThroughitsinvestmentinShelterBay,theTrustremainsexposedtofurtherconsolidationopportunities,includingland,assetandcorporateacquisitions,intheBakkenlightoilresourceplay

andinotherCrescentPointcoreareas.Inaddition,ongoingimprovementstoinitialproductivityratesintheBakkenanda13yearlowriskdevelopmentdrillinginventoryprovidetheTrustwithsignificantopportunitytogrowproductioninternallythroughdevelopmentdrilling.

Atthistime,IextendsincerethankstoCrescentPoint’smanagementteamandemployeesfortheirdedicatedeffortsindeliveringoutstandingresultsthroughoutthepastyear,toallthemembersoftheBoardofDirectorsfortheirguidance,andtotheTrust’sunitholdersfortheirsupportoftheCrescentPointbusinessmodel.

OnbehalfoftheBoardofDirectors,

ScottSaxberg PresidentandChiefExecutiveOfficer March2008


33,351announcedproduction in2007Q4 2008


� Crescent Point Energy Trust AR | 07

OPERATIONS

EvOLuTION OF THE BuSINESS STRATEGy: ACquIRE, ExPLOIT AND ExPLORE

2007isCrescentPoint’ssixthconsecutiveyearofgrowthandrecordresults.Thisyear’ssuccesseshavehighlightedCrescentPoint’stechnicalexpertiseandabilitytonotonlyacquireandgrow,buttoexplore,exploitanddevelop.TheTrustnotonlyacquiredassetsof45.7millionboeprovedplusprobableduringtheyear,butalsocomplementeditsacquisitionswitharecordcapitaldevelopmentprogramthataddedprovedplusprobablereservesof42.1millionboethroughexploration,exploitationanddevelopment.

Inearly2007,CrescentPointacquiredMissionOil&GasInc.(“Mission”),establishingadominantpositionintheViewfieldBakkenlightoilresourceplayinsoutheastSaskatchewan.WiththeacquisitionofMission,theTrustacquiredmorethan5,000boe/dofBakkenproduction,143netsectionsofundevelopedBakkenlandandaninventoryof570netlowriskBakken drillinglocations.Atthetime,CrescentPointestimatedtheBakkenplaytocontainabout1.0billionbarrelsoforiginaloil inplace(“OOIP”).

Throughanaggressivecapitalprogram,theTrustsuccessfullydrilled88(60.0net)Bakkenwellsin2007,increasingproductionto12,000boe/dbyyearend,a54percentincreaseoverthe7,800boe/dofBakkenproductionacquiredintheacquisitionsofMissionandInnovaExplorationLtd.(“Innova”).TheBakkendrillingprogramincluded11strategicstepoutexplorationwells,expandingtheaerialextentoftheplayby11townships.CrescentPoint’sinternalestimatesoftheBakkenarenowgreaterthan4billionbarrelsOOIP.TheTrustalsospentmorethan$42millionstrategicallyacquiring115netsectionsofundevelopedBakkenland.

Byyearend,theTrusthadincreaseditsundevelopedBakkenlandholdingsto363netsectionsanditslowriskBakkendevelopmentdrillinginventoryto1,050netlocations.Atyearend,independentengineersrecognizedpositivetechnicalprovedplusprobablereserveadditionsof35.7millionboeintheBakken,bringingtheTrust’stotalBakkenreservesto70.2millionboeprovedplusprobable.

Corporatelyin2007,CrescentPointachievedrecordnetassetvalue(“NAV”)pertrustunit,production,reservesandtechnicalanddevelopmentreservesrevisions.TheTrustgenerateditslowesteverfindinganddevelopment(“F&D”)costsin2007whileexecutingitslargestevercapitaldevelopmentprogram.

TheTrust’snetbacksin2007wereamongthehighestintheoilandgasincometrustsectorwhich,combinedwithtopdecileF&Dcosts,areexpectedtogeneratethehighestprovedplusprobablerecycleratio(netbackdividedbyprovedplusprobableF&Dcosts)inthesectorat7.6times.

TheTrust’s2007achievementsarethedirectresultoftheconsistentanddisciplinedapplicationofitsbusinessplan,itstechnicalexpertiseanditsstrategicfocustoitslargeoilinplaceassets.Overtheyears,theTrusthasdevelopedahighlevelofgeological,reservoirandoperationalexpertiseinitscoreareas,andthisknowledgebaseandexperiencehasledtoeconomiesofscaleinbothoperationsandcapitaldevelopmentandtostrongoperationalresults.

0

3

6

9

12

15

2002 2003 2004 2005 2006 2007

RLI (

Year

s)

20081

8.5

9.2

11.1

11.9

9.1

13.3

14.0

PROVED PLUS PROBABLERESERVE LIFE INDEX

(1)IncludesacquisitionsofLandexPetroleumCorp.’snonBakkenassetsand PilotEnergyLtd.

2007 OPERATIONS HIGHLIGHTS: RECORD RESuLTS

During2007,CrescentPointcontinuedtocreatesustainable,valueaddedgrowthinproduction,reservesandcashflowthroughtheexecutionofmanagement’sintegratedstrategyofacquiring,exploiting,developingandoptimizingitshighquality,longlifelightoilandnaturalgasproperties.

TheTrustreduceditssixyearaverageF&Dcoststo$6.96perboeprovedplusprobableasaresultofasixthconsecutiveandrecordyearofstrongpositivetechnicalanddevelopmentreserverevisions.TheTrustincreaseditstotalprovedplus

AR | 07 Crescent Point Energy Trust �

OPERATIONS

probablereservelifeindexfrom11.9yearsatyearend2006to13.3yearsatyearend2007andto14.0yearsincludingthefirstquarter2008acquisitionsofLandexPetroleumCorp.’snonBakkenassetsandPilotEnergyLtd.

At$40.98perboe,CrescentPointhadoneofthehighestoperatingnetbacksinthesectorin2007duetoimprovingoilqualities,pricesandroyaltyratesandstrongoperatingcostdiscipline.WithF&Dcostsof$5.42perprovedplusprobableboein2007,theTrustimproveditsrecycleratioto7.6timesonaprovedplusprobablebasis.

2007 OPERATIONAL HIGHLIGHTS:

• IncreasedtheTrust’syearendNAVperunitby86percentto$40.21from$21.61;

• IncreasedtheTrust’syearendprovedreservesby81percentto115.7millionboeanditsprovedplusprobablereservesby85percentto167.5millionboe.YearendreserveswereindependentlyevaluatedbyGLJPetroleumConsultantsLtd.(“GLJ”)andSprouleAssociatesLtd.(“Sproule”)utilizingNI51-101reservedefinitions;

• ReducedF&Dcosts,excludingchangesinfuturedevelopmentcosts,to$5.42perprovedplusprobableboeand$8.32perprovedboeofreserves.Thisisa45percentand36percentimprovement,respectively,from2006;

• Achieveda2007provedplusprobablerecycleratioof7.6timesbasedonF&Dcostsof$5.42perboeandanaveragenetback,excludinghedgingadjustments,of$40.98perboe.TheTrust’ssixyearweightedaveragerecycleratiois6.1times;

• Achievedasixthconsecutiveandrecordyearofstrongpositivetechnicalanddevelopmentreserverevisions,whichadded42.1millionboeofincrementalprovedplusprobablereserves.Approximately63.7millionboeoftheTrust’syearendreservebaseof167.5millionboearederivedfromindependentlyrecognizednetpositivetechnicalanddevelopmentreservesrevisionsoverthepastsixyears,whichhighlightstheTrust’stechnicalexpertiseandabilitytosuccessfullyexpand,exploitanddevelopitshighquality,largeresourceinplaceassetbase;

• ExpandedtheBakkenlightoilresourceplaytomorethan4billionbarrelsofOOIPthroughanaggressivestepoutdrillingexplorationprogramandachievedtechnicalanddevelopmentreserveadditionsintheBakkenof35.7mmboeprovedplusprobableand20.8mmboeproved.FullcycleF&Dcostsintheplayareapproximately$12.40per

provedplusprobableboe,whichcombinedwithanaverage2007Bakkennetbackof$62.09perboe,generatearecycleratioof5.0timesprovedplusprobable;

• Realizedpositivetechnicalanddevelopmentreserverevisionsof6.4mmboeprovedplusprobableand6.6mmboeprovedontheTrust’snonBakkenassets,realizingF&Dcostsof$13.48perprovedplusprobableboeand$13.06perprovedboe;

• Completed9acquisitionsandoneminordispositionforatotalnetpurchasepriceof$1.1billion,netofclosingadjustments.Theacquisitionsadded11,400boe/dofproductionandreservesof34.9millionboeprovedand45.7millionboeprovedplusprobable;

• Achievedlowfinding,developmentandacquisition(“FD&A”)costs,excludingchangesinfuturedevelopmentcosts,of$14.71perprovedplusprobableboeand$20.74perprovedboeofreserves;

• IncreasedtheTrust’slowriskdrillinginventorytonearly1,400netlocations.ThevalueoftheTrust’sfuturedevelopmentprojectsis$2.2billion;

• IncreasedtheTrust’sassetbasetomorethan6billionbarrelsgrossOOIP;

• Successfullyexecutedarecordcapitaldevelopmentprogram,spending$227.9million,includingmorethan$42milliononland.TheTrustdrilled149(107.0net)wellsin2007,achievingasuccessrateof99percentandaddinginitialinterestproductionof7,000boe/d;and

• Increaseddailyaverageproductionby36percentto28,117boe/din2007from20,723boe/din2006.Productioncurrentlyexceeds35,000boe/d.

F&DANDFD&ASUMMARY

Perboe,exceptRecycleRatios Proved ProvedplusProbable

F&D

2007F&DCost,excludingchangeinFDC� $8.32 $5.42

2007AverageRecycleRatio� 4.9 7.6

2007F&DCost,includingchangeinFDC $16.39 $12.90

6-yrF&DCost,excludingchangeinFDC $10.17 $6.96

FD&A

2007FD&ACost,excludingchangeinFDC $20.74 $14.71

2007AverageRecycleRatio� 2.0 2.8

2007FD&ACost,includingchangeinFDC $24.30 $18.31

6-yrFD&ACost,excludingchangeinFDC $18.28 $13.40

(1)FutureDevelopmentCapital (2) Basedon2007averageoperatingnetback(excludingrealizedhedginglosses) of$40.98/boe

�0 Crescent Point Energy Trust AR | 07

OPERATIONS

RESERvES: 6 yEARS OF SuBSTANTIAL POSITIvE TECHNICAL AND DEvELOPmENT RESERvE REvISIONS

Sinceinceptionasacompanyin2001,CrescentPointhasbuiltatrackrecordofcreatingvalueaddedgrowthinreserves,productionandcashflowthroughstrategicaccretiveacquisitionsandthesuccessfulexploitationanddevelopmentofitshighqualityassetbase.

TheTrustdemonstrateditssixthconsecutiveandarecordyearofindependentlyrecognizedpositivetechnicalanddevelopmentreserverevisionsin2007.ThistrackrecordistheresultoftheTrust’sabilitytoidentifyhighqualitylargeresourceinplaceassetswithsignificantupsidepotentialanditsabilitytoimplementtechnicalplanstoincreaserecoveryfactorsandreserves.Therecordpositivetechnicalrevisionsin2007areduelargelytotheTrust’ssuccessfulexpansionoftheBakkenlightoilpoolthroughstepoutexplorationdrilling,infilldrilling,andthecontinuingrefinementandimprovementoftechnology.

During2007,theTrustadded87.4millionboeofprovedplusprobablereserves,including42.1millionboeduetotechnicalanddevelopmentrevisions.These42.1millionboeareontopofacumulative21.6millionboeofprovedplusprobabletechnicalanddevelopmentreserveadditionsovertheprevioussixyears.

0

5

10

15

20

25

30

FINDING AND DEVELOPMENT COSTS

$/bo

e

2002 2003 2004 2005 2006 2007

Total Proved

Total Proved Plus Probable

Proved Plus Probable Weighted Average

$6.96/boe

0

5

10

15

20

25

30

FINDING, DEVELOPMENT ANDACQUISITION COSTS

$/bo

e

2002 2003 2004 2005 2006 2007

Total Proved

Total Proved Plus Probable

Proved Plus Probable Weighted Average

$13.40/boe

0

45,000

90,000

135,000

180,000

CONTRIBUTION OFRESERVES REVISIONS

Prov

edPl

usPr

obab

leRe

serv

es(m

boe)

2002 2003 2004 2005 2006 2007

Proved Plus Probable Reserves

Cumulative Revisions

Yearly Revisions

AR | 07 Crescent Point Energy Trust ��

OPERATIONS

LOw RISk DEvELOPmENT DRILLING INvENTORy OF mORE THAN 13 yEARS

OneofthekeyelementsofCrescentPoint’sbusinessplanistofocusonlargeoilorgasinplacepools.Largeresourceinplacepoolsoffergreatergrowthpotentialduetoalongstandingpetroleumindustryphenomenon:largeresourceinplacepoolstendtooutperformtheirinitialestimatesovertime.Byfocusingonthesepools,CrescentPointhasamassedanassetbaseofmorethan6billionbarrelsofgrossOOIP,whichprovidestheTrustwiththeopportunitytomorethandoublecurrentreservesthroughinfilldrilling,improvedtechnologies,andwaterfloodandproductionoptimization.

Withthisassetbase,CrescentPointhasdevelopedasignificantlowriskdevelopmentinventoryofnearly1,400netlocationsrepresentingmorethan100,000boe/dofriskedproduction

additions.TheTrustusesthisdevelopmentdrillinginventorytomaintainandgrowproductionandtoprovidealongtermbasewithwhichtosustaindistributions.

Sinceinception,CrescentPointhasdemonstratedapositiverecordofdevelopmentdrilling.Overthepastsixyears,thecompanyhasdrilled293.2netwellswithasuccessrateof97percent,addingnearly16,000boe/dofinitialinterestproduction.TheTrusthasenjoyedanaveragerateofreturngreaterthan200percent,achievingF&Dcostsof$6.96perprovedplusprobableboeandaweightedaveragerecycleratioof6.1times.

2007wasanotherrecordyearofsuccessfulcapitalactivityforCrescentPoint.TheTrustdrilled149(107.0net)wellsincluding142(102.2net)oilwellsand6(4.8net)servicewells,achievinga99percentsuccessrateandaddingover7,000boe/dofinitialinterestproduction.

ThefollowingtablesummarizestheTrust’sdrillingresultsfortheyearendedDecember31,2007:

DRILLING RESuLTS

Gas Oil D&A Service Standing Total Net SuccessSoutheastSaskatchewan - 124 - 4 � �� 93.7 ��%

SouthwestSaskatchewan - �3 - - - �3 6.4 �00%

South/CentralAlberta - � - � - � 1.9 �00%NortheastBCandWestPeaceRiverArch,Alberta - 4 - � - 5 5.0 �00%

Total - 142 - 6 � 149 107.0 ��%

2007 ACquISITIONS

CrescentPoint’sacquisitionstrategyisakeycomponentofitsbusinessplan.TheTrustfocusesonlargeoilorgasinplacepropertiesthatareoperatedwithhighworkinginterestsandnetbacks,developmentdrillingupside,andthepotentialtoincreasereservesovertime.TheTrust’sdisciplinedapproachtoacquisitionshasprovidedunitholderswithyearoveryeargrowthinreserves,productionandcashflow.

2007wasanothersuccessfulyearofacquisitionsasCrescentPointcompleted9transactionsandoneinearly2008.AllofthesewereconsolidationswithintheTrust’scoreareasandthemostsignificantweretheBakkenacquisitionsofMissionandInnova.TheacquisitionofMissionaddedreservesof24.8mmboeprovedplusprobableand15.9mmboeproved,ofwhichapproximately82percentwereintheBakken.TheacquisitionofInnovaconsolidatedtheMissionlands,addingfurtherreservesof18.0mmboeprovedplusprobableand12.0mmboeproved.

TheInnovaacquisitionaddedapproximately4,300boe/dofhighnetbackproduction,approximately65percentofwhichwasintheBakken.

2007 OPERATIONS REvIEw AND 2008 CAPITAL PLANS

Thefoundationofmanagement’sintegratedbusinessstrategy,andforCrescentPoint’ssustainabletrustmodel,istheTrust’shighqualityassetbase.Thisassetbaseconsistsoffocused,largeresourceinplaceoilandgasreservoirswithlowaverageproductiondeclinesandsubstantialreservesupsidepotential.Theseassetsaremanagedbymultidisciplinarybusinessteamsconsistingofexperiencedgeologists,engineers,landmen,accountantsandfieldoperatorswhocreatelongtermvaluebymaximizingrecoveriesandminimizingcosts.

In2007,theseteamsfocusedonvalueaddedinitiativesattheTrust’scoreareasofViewfield,Battrum/Cantuar,Manor,Tatagwa,SoundingLake,WorsleyandGlenEwen.

�� Crescent Point Energy Trust AR | 07

OPERATIONS

vIEwFIELD BAkkEN

During2007,CrescentPointestablished,consolidatedandexpandedadominantpositioninthesoutheastSaskatchewanBakkenlightoilresourceplay.TheTrustcompletedfiveacquisitionsintheViewfieldBakkenplay,includingtheFebruaryacquisitionofMissionandtheOctoberacquisitionofInnova.TheTrustalsoaggressivelyexpandedtheplaywithasuccessfulstepoutexplorationdrillingprogramandastrategiclandacquisitionstrategythatadded115netsectionsofundevelopedCrownandfreeholdBakkenland.Includingdevelopedland,theTrust’sBakkenlandholdingstotaled413netsectionsbyyearend.

CrescentPointisnowthelargestoilproducerinsoutheastSaskatchewan.TheTrustisalsothedominantplayerintheViewfieldBakkenplayduetoitsproductionlevels,drillinginventory,infrastructurecontrolandundevelopedlandholdings.Yearend2007productionfromtheBakkenareaexceeded12,000boe/d,thelargestinthesoutheastSaskatchewanBakkenplay.ByFebruaryof2008,over300grosswellshadbeendrilledonTrustownedlandsintheBakkenwitha100percentsuccessrate,providingCrescentPointwiththelargestdatabaseofeconomicandtechnicalBakkendata.TheTrustoperatesthelargestandmostcentrallylocatedgasplantandgatheringsystemintheplay,providingasignificantcompetitiveadvantage.ThisareadominanceprovidestheTrustwitheconomiesofscaleandinfluenceoverthecostandavailabilityofsuppliesandservices.

CrescentPointengineersandfieldstaffcontinuetoimprovethefracturestimulationtechniquesutilizedintheBakkentoimprovetheproductivityofthehorizontaloilwellsandtobetterunlockthevalueoftheplay.Technologicaladvanceshavemorethandoubledinitialproductionrates,significantlyincreasedperwellreservesandmorethantripledperwellvalues.

In2007,theTrustdrilledatotalof88(60.0net)Bakkenhorizontalwells,including11stepoutexplorationwells,andfracturestimulated46(38.3net)Bakkenhorizontalwells.Utilizingaseriesofimprovementstothefracturestimulationtechnology,theTrustincreasedaverageinitialpostfracturestimulationproductionratestomorethan200boe/dperwell.

AsaresultoftheTrust’sactivitiesinthearea,independentengineersrecognizedatyearend2007positivetechnicalanddevelopmentreserverevisionsof35.7mmboeprovedplusprobableand20.8mmboeprovedontheselands,resultinginaprovedplusprobableF&Dcostof$3.98perboe.Basedona

2007Bakkenoperatingnetbackof$62.09perboe,theTrustrealizedaprovedplusprobableBakkenrecycleratioof15.6times.CrescentPointbelievesthatinfilldrillingovertimemayincreaserecoveryfactorsto15percentcomparedtothe3.9percentcurrentlybookedbyindependentengineers.Thisincreasecouldaddupwardsof190mmboeofprovedplusprobablereservesnettotheTrustintheBakkenplay.

TheTrusthasinternallyidentified1,210(1,050.0net)drillinglocationsonitsBakkenlandholdingswithariskedproductionpotentialofmorethan85,000boe/d.TheTrusthasafracturestimulationinventoryof65(60.0net)previouslyfracturestimulatedwellsandafurther75(70.0net)wellsthathavenotyetbeenfracturestimulated.Inall,theTrustcouldaddupto13,000boe/dofnetincrementalproductionfromfracturestimulationactivities.

TheTrust’slargedrillinginventory,alongwithstrategicdecisionsregardingthetimingoffracturestimulationprograms,providestheTrustwithsignificantflexibilityintheimplementationofitscapitaldevelopmentactivities.

During2008,CrescentPointplanstodrillupto79(65.5net)horizontalwellsintheBakkenandfracturestimulate92(77.2net)wells.DuetosuccessfulexplorationandexploitationactivitiesintheBakken,theTrustdoubledthecapacityoftheViewfieldgasplantfrom3mmcf/dto6mmcf/din2007andaddedfullfractionationfacilities.TheTrustwillfurtherexpandtheplantto15mmcf/dinlate2008,whichwillaccommodatetheTrust’ssuccessfulBakkendrillingandfracturestimulationactivities.CrescentPointalsooperates17oilbatteriesintheBakkenarea,providingfurtheroperationalflexibilityandcontrol.

BATTRum

IntheBattrumarea,theTrustcontinuedtooptimizereservesrecoveriesthroughacombinationofwaterfloodoptimization,infilldrillingandrecompletions.Positivereserverevisionsof1.2mmboeprovedplusprobablewereassignedbyindependentengineers,generatingF&Dcostsof$2.50perprovedplusprobableboe.Thetrustdrilled8(3.6net)wellsatBattrumwitha100percentsuccessrateandaddedover180boe/dofinterestproduction.Sinceacquiringthepropertyin2006,theTrusthasaddedover8.3mmboeofprovedplusprobablereservestoatotalof13.9mmboeatyearend2007.

In2008,theTrustplanstodrillupto15(6.3net)oilwells atBattrum.

AR | 07 Crescent Point Energy Trust �3

OPERATIONS

CANTuAR

AtthenonoperatedCantuarUnit,areservoirsimulationmodeldemonstratedthatOOIPestimateshadincreasedfrom 409mmbblsto489mmbbls,theresultofinfilldrillingandimprovedwaterfloodperformanceaccessingmoreofthereservoir.Positivereserverevisionsof0.9mmboeprovedplusprobablewereassignedbyindependentengineers,resultinginF&Dcostsof$5.91perprovedplusprobableboe.

TheTrustparticipatedinthedrillingof5(2.8net)wellsatCantuar,includingtwo20acredownspacedwells,achievinga100percentsuccessrate,andaddingover80boe/dofinterestproduction.Upto5(2.8net)20acrespacedwellsareplannedfor2008.Sinceacquiringthepropertyin2006,theTrusthasaddedover8.5mmboeofprovedplusprobablereservestoatotalof18.4mmboeatyearend2007.

mANOR

AtManor,theTrustdrilled14(14.0net)wells,including3(3.0net)75metreinfillhorizontalwells,addingover1,000boe/dofinitialincrementallightoilproductionwithhighnetbacks.TheTrust’sdrillingactivitiesresultedinprovedplusprobablereservesrevisionsof459mboeatyearend2007.

Duringtheyear,theTrustexpandeditswaterhandlingfacilitiestoaccommodateincreasedfluidproductionandcommencedconstructiontotieingasfromManorNorth,whichwascompletedinFebruaryof2008,adding550mcf/dofinterestsalesgas.TheTrustwilldrillupto10(7.7net)wellsin2008,including3(3.0net)75-metreinfillhorizontallocations.

TATAGwA

Basedondetailedgeologicalandreservoirengineeringstudiesconductedduring2006attheTatagwaUnit,theTrustdrilled4(2.8net)waterinjectionwellsandexpandeditswaterhandlingfacilitiestoaccommodateincreasedproduction.Independentengineershaveassignedaprovedplusprobablerecoveryfactorof11.5percenttotheUnit,representinganincremental 4.7percentincreasefrom2003whentheTrustacquireditsinterestintheUnit.Thisrepresentsanincremental7.8mmboeofprovedplusprobablereserves.

In2008,CrescentPointwilldrillupto6(4.2net)waterinjectionwellsandupto3(2.1net)oilwellsatTatagwatofurtherimprovewaterfloodefficienciesandimproverecoveries.

SOuNDING LAkE

AtSoundingLake,fieldwideupgradeandexpansionofthegatheringandinjectionsystemcontinuedinordertosupportthelongtermdevelopmentoftheCummings,DinaandSparkywaterfloods.RegulatoryapprovalforthedelineationoftheSparkyformationpoolwasreceivedinlate2007andawaterfloodapplicationhasbeensubmitted,approvalofwhichisexpectedinmid2008,withwaterinjectionforecasttocommenceinlate2008.Independentengineershaverecognizedconservativepreliminaryincrementalinterestreservesof136mboeduetothewaterfloodplans.

TheTrustplanstodrillupto4(3.8net)oilwellsandconvert6(6.0net)oilwellstowaterinjectionwellsintheSparkyformationandconvert4(4.0net)oilwellstowaterinjectionwellsintheCummingspooltooptimizewaterfloodrecoveries.

wORSLEy

AtWorsley,theTrustobtainedGoodProductionPractice(“GPP”)statusattheCharlieLakeTpoolandappliedforanexpansionofitsexistingSpooldelineationandwaterflood.WaterinjectioncommencedintheSandTpoolsin2007andasourcewaterwellwasdrilledtosupportincreasedoilwithdrawalsfromthereservoirs.ThecentralbatteryatWorsleywasalsoupgradedtoaccommodatefuturewaterinjectioncapacity.Constructionofastreamlinedgatheringsystemandcompressoroptimizationwascompletedinearly2008.

Atotalof4(4.0net)wellsweredrilledin2007,achievinga100percentsuccessrateandadding200boe/d.TheTrustplanstodrillupto4(3.6net)wellstargetingtheCharlieLakeformationin2008andwillcontinuetooptimizegasgatheringfacilities.

GLEN EwEN

AtGlenEwen,constructionofthe3mmcf/dgasplantwascompletedinthefirstquarterof2007,increasingliquidsrecoveriesandincreasingrevenueatthefieldby$20.00perboe.Atotalof6(6.0net)horizontalwellsweredrilledin2007withanadditional2(2.0net)plannedfor2008.


RESERVESAllreservesinformationhasbeenpreparedinaccordancewithNationalInstrument(“NI”)51-101.ThisreportcontainsseveralcautionarystatementsthatarespecificallyrequiredbyNI51-101.Inadditiontothedetailedinformationdisclosedinthisannualreport,moredetailedinformationwillbeincludedintheTrust’sAnnualInformationForm(“AIF”).

In2007,CrescentPointreplaced410percentofproductiononaprovedplusprobablebasis,notincludingreservesaddedthroughacquisitions.Includingacquisitions,theTrustreplaced855percentofproductionandincreaseditsyearendreservesto167.5millionboeprovedplusprobableand115.7millionboeproved.Bycomparison,yearend2006reserveswere90.3millionboeprovedplusprobableand64.0millionboeproved.

TheTrust’syearendreserveswereindependentlyevaluatedbyGLJandSprouleasatDecember31,2007.

During2007,oilandgascapitalexpenditures(excludingacquisitions)were$227.9million.Basedontechnicalanddevelopmentreserveadditionsof42.1millionboeprovedplusprobableand27.4millionproved,theTrusthadF&Dcosts,excludingchangesinfuturedevelopmentcosts,of$5.42perprovedplusprobableboeand$8.32perprovedboe.TheTrust’ssixyearweightedaverageforF&Dcostsis$6.96perprovedplusprobableboe.

TheTrust’sFD&Acostsfor2007,excludingchangesinfuturedevelopmentcosts,were$14.71perprovedplusprobableboeand$20.74perprovedboe.TheTrust’ssixyearweightedaverageforFD&Acostsis$13.40perprovedplusprobableboe.Includingchangesinfuturedevelopmentcosts,theTrust’sFD&Acostsfor2007were$18.31perprovedplusprobableboeand$24.30perprovedboe.

TheTrust’sNAVperunitincreasedto$40.21(discountedat5percent)atyearend2007,upfrom$21.61fortheyearprevious.TheTrusthasincreasedNAVperuniteveryyearsinceinception,morethandoublingitinthelasttwoyearsalone.


RESERVES

SummARy OF RESERvES ASATDECEMBER31,2007(�)

ESCALATEDPRICINGRESERVES(�)

Oil(mbbls) Gas(mmscf) NGL(mbbls) Total(mboe)

Description Gross Net Gross Net Gross Net Gross Net

Provedproducing 62,088 52,945 43,262 35,429 1,611 1,425 70,910 60,274

Provednon-producing 37,532 33,740 25,264 20,844 3,051 2,799 44,793 40,015

Totalproved 99,620 86,685 68,526 56,273 4,662 4,224 115,703 100,289

Probable 45,000 39,174 27,649 22,908 2,164 1,986 51,773 44,977

Totalprovedplusprobable(3) 144,620 125,859 96,175 79,181 6,826 6,210 167,476 145,266

(1) BasedonGLJ’sJanuary1,2008escalatedpriceforecast. (2) “GrossReserves”arethetotalTrust’sinterestsharebeforethedeductionofanyroyaltiesandwithoutincludinganyroyaltyinterestoftheTrust.“NetReserves”arethetotal Trust’sinterestshareafterdeductingroyaltiesandincludinganyroyaltyinterest. (3) Numbersmaynotaddduetorounding.

SummARy OF BEFORE AND AFTER TAx NET PRESENT vALuESASATDECEMBER31,2007(�)

ESCALATEDPRICINGBEFORETAXNETPRESENTVALUE($000) AFTERTAXNETPRESENTVALUE($000)

DiscountRate DiscountRate

Description Undiscounted 5% �0% 15% Undiscounted 5% �0% 15%

Provedproducing 2,812,839 2,082,080 1,695,324 1,452,326 2,630,828 1,987,669 1,638,386 1,414,651

Provednon-producing 1,935,941 1,406,808 1,088,634 878,279 1,693,520 1,256,839 987,498 805,749

Totalproved 4,748,780 3,488,888 2,783,958 2,330,605 4,324,348 3,244,508 2,625,884 2,220,400

Probable 2,492,837 1,346,743 874,943 630,479 1,854,205 1,020,979 674,088 492,498

Totalprovedplusprobable 7,241,617 4,835,631 3,658,901 2,961,084 6,178,553 4,265,487 3,299,972 2,712,898

(1) BasedonGLJ’sJanuary1,2008escalatedpriceforecast.

RESERvES RECONCILIATION (GROSS RESERvES(1))FORTHEYEARENDEDDECEMBER31,2007

ESCALATEDPRICING CrudeOilandLiquids(mbbls) NaturalGas(mmscf) BOE(mboe)

Proved Probable Total Proved Probable Total Proved Probable Total

Openingbalance 57,458 23,962 81,420 38,959 14,446 53,405 63,951 26,370 90,321

Acquired 30,554 9,099 39,653 25,797 10,542 36,339 34,854 10,856 45,711

Disposed (3�) (34) (66) (1,197) (522) (1,719) (�3�) (��) (353)

Production (8,887) 0 (8,887) (8,253) 0 (8,253) (10,263) 0 (10,263)

Development 21,203 14,685 35,888 8,753 5,331 14,084 22,662 15,574 38,235

Technicalrevisions 3,987 (548) 3,439 4,466 (2,147) 2,319 4,731 (�06) 3,825

Closingbalance(�) 104,282 47,164 151,446 68,526 27,649 96,175 115,703 51,773 167,476

(1) BasedonGLJ’sJanuary1,2008escalatedpriceforecast.“Grossreserves”aretheTrust’sworking-interestsharebeforedeductionofanyroyaltiesandwithoutincludingany royaltyinterestsoftheTrust. (2) Numbersmaynotaddduetorounding.


RESERVES

2007 FINDING, DEvELOPmENT AND ACquISITION COSTS (ExCLuDING FuTuRE DEvELOPmENT COSTS)

FORTHEYEARENDEDDECEMBER31,2007CapitalExpenditures(1)(4) Reserves(3) Finding,DevelopmentandAcquisitionCosts(�) (�)

TotalProved ProvedPlusProbable Proved ProvedPlusProbable

$000 % mboe % mboe % $/boe $/boe

Exploration,developmentandrevisions $227,923 ��% 27,392 44% 42,060 48% $8.32 $5.42

Acquisitionsnetofdispositions $1,058,069 ��% 34,622 56% 45,358 52% $30.56 $23.33

Total $1,285,993 �00% 62,015 �00% 87,418 �00% $20.74 $14.71

(1) ExplorationDevelopmentandRevisionsexcludethechangeduringthemostrecentfinancialyearinestimatedfuturedevelopmentcostsrelatingtoprovedandproved plusprobablereservesrespectively.Thesecostswouldadd$220.9millionand$314.5millionrespectivelytotheprovedandprovedplusprobablereservescategories. Includingthesechanges,theprovedandprovedplusprobablefindinganddevelopmentcostsare$16.39and$12.90perboerespectively. (2)Includingchangeinfuturedevelopmentcosts,finding,developmentandacquisitioncostsare$24.30perprovedboeand$18.31perprovedplusprobableboe. (3) GrossTrustinterestreservesareusedinthiscalculation(interestreserves,beforedeductionofanyroyaltiesandwithoutincludinganyroyaltyinterestsoftheTrust). (4) Thecapitalexpendituresincludesthepurchasepriceofcorporateacquisitionsratherthantheamountsallocatedtoproperty,plantandequipmentforaccountingpurposes. Thecapitalexpendituresalsoexcludecapitalizedadministrationcostsandacquisitioncosts.

SummARy OF RESERvES, INCLuDING FIRST quARTER 2008 ACquISITIONS AsatJanuary1,2008(�) (�)

ESCALATEDPRICINGRESERVES(3) BEFORETAXNETPRESENTVALUE($000)

Oil(mbbls) Gas(mmscf) NGL(mbbls) Total(mboe) DiscountRate

Description Gross Net Gross Net Gross Net Gross Net Undiscounted 5% �0% 15%

Provedproducing 65,643 56,077 44,384 36,466 1,623 1,437 74,663 63,592 2,982,478 2,223,327 1,817,660 1,561,112

Provednon-producing 38,998 35,090 25,884 21,427 3,122 2,864 46,434 41,526 2,007,585 1,461,015 1,132,211 914,643

Totalproved 104,640 91,167 70,268 57,894 4,745 4,302 121,097 105,117 4,990,063 3,684,342 2,949,872 2,475,755

Probable 47,648 41,543 28,555 23,751 2,235 2,053 54,642 47,554 2,630,987 1,432,863 936,188 677,719

Totalprovedplusprobable(4) 152,288 132,710 98,823 81,645 6,980 6,354 175,739 152,672 7,621,051 5,117,205 3,886,060 3,153,475

(1) Includesindependentengineers’evaluationsofCrescentPoint2007yearend,PilotEnergyLtd2007yearend,andLandexPetroleumnonBakkenassets2007yearend. (2) BasedonGLJ’sJanuary1,2008escalatedpriceforecast. (3) “GrossReserves”arethetotalTrust’sinterestsharebeforethedeductionofanyroyaltiesandwithoutincludinganyroyaltyinterestsoftheTrust.“NetReserves”arethetotal Trust’sinterestshareafterdeductingroyaltiesandincludinganyroyaltyinterests. (4) Numbersmaynotaddduetorounding.

BEFORE TAx NET ASSET vALuE PER uNIT, FuLLy DILuTEDUTILIZINGINDEPENDENTENGINEERINGESCALATEDPRICING

�00� (�) �007 �006 2005 2004 �003

PV0% $59.69 $61.03 $34.08 $21.99 $16.19 $12.72

PV5% $39.92 $40.21 $21.61 $15.12 $11.22 $9.15

PV10% $30.23 $30.05 $15.70 $11.45 $8.56 $7.14

PV15% $24.47 $24.04 $12.27 $9.10 $6.85 $5.83

(1) IncludesCrescentPoint’s2007fiscalresultsandtheacquisitionofLandexPetroleumCorp.’snonBakkenassetsandPilotEnergyLtd.utilizingJanuary1,2008 IndependentEngineeringEscalatedPricingandtheimpactoftheboughtdealequityfinancingof$125million.


LANDHOLDINGSAsatDecember31,2007,CrescentPointhadanundevelopedlandbaseof536,000netacres(approximately838sections),withanaverageworkinginterestofapproximately72percent.Ofthistotal,235,000netacres(approximately363sections)wereinthesoutheastSaskatchewanBakkenlightoilresourceplay.

InFebruary2007andOctober2007,respectively,CrescentPointsuccessfullyclosedtheacquisitionsofMissionOilandGasInc.andInnovaExplorationLtd.Combined,thesetwoacquisitionsaddedapproximately340,000netundevelopedacres(approximately531sections)totheTrust’sexistinglandbase,ofwhichapproximately240sectionswereinthe Bakkenplay.

Inadditiontothesecorporateacquisitions,CrescentPointfocusedaggressivelyonacquiringundevelopedBakkenacreagethroughcrownlandsalesandfreeholdleasingprogramsin2007.Asaresultoftheseactivities,theTrustsuccessfullyadded73,600netacres(115netsections)ofundevelopedBakkenlandduringtheyear.

Alsoin2007,CrescentPoint’stechnicalteamidentifiedthreeopportunitiestofarminonthirdpartyundevelopedlandholdingsintheTrust’scoreareaofsoutheastSaskatchewan.TheTrustsuccessfullynegotiatedfarminarrangementsresultinginthedrillingofonewellin2007,twowellsinearly2008,andtheplanningforthreeadditionalwellstobedrilledinthebalanceof2008.Thefirstthreefarminwellswereasuccess,andwiththecompletionofallsixwells,theTrustwillearna100percentworkinginterestinthelandssubjecttoanonconvertiblegrossoverridingroyalty.


RISKMANAGEMENT& HEDGINGSTRATEGY

CommoditypriceriskmanagementhasbeenakeycomponentofCrescentPoint’sbusinessplanandcorporatestrategysincethecompany’sinceptionin2001.TheTrustusesadisciplined,rolling3.5yearriskmanagementprogramthatincludesaportfolioofswaps,collarsandputstoprovidestabilityincrudeoilandnaturalgaspricesandintheUS/Cdndollarexchangerate.

ThisrigoroushedgingprogramisdesignedtoprovidestabilityovertheTrust’scashflowsanddistributionsovertime,despitethecyclicalnatureofoilandnaturalgasprices.Usingacombinationofinstruments,theTrustisprovidedwithdownsideprotectionwhilepreservingupsideintheeventofrisingprices.

TheTrust’sriskmanagementlimitsallowforthehedgingofupto50percentofaftercrownroyaltyvolumesovera3.5yearperiod.Hedgevolumesmaybeincreasedatmanagement’sdiscretiontoalimitof65percentofaftercrownroyaltyvolumesprovidedthatthehedgevolumesoverandabovethe50percentlimitareintheformofpurchasedputoptions.

AsofMarch3,2008,theTrusthadapproximately60percentofaftercrownroyaltyvolumeshedgedin2008,57percentin2009,41percentin2010and2percentinthefirsthalfof2011.MinimumfloorpricesweremorethanCDN$74.00boe.

TOTAL HEDGES (boe/d as at March 3, 2008)

boe/

d

Swaps Collars Put Options

0

5,000

10,000

15,000

20,000

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11


CORPORATEGOVERNANCETheBoardofDirectorsandthemembersofCrescentPoint’smanagementarecommittedtothehigheststandardsofcorporategovernance.CrescentPointemploysavarietyofpolicies,programsandpracticestomanagecorporategovernanceandensurecomplianceismaintained.TheTrust’sBoardofDirectorsandmanagementbelievethatstrongcorporategovernanceisanessentialingredientinthecreationofunitholdervalueandthemaintenanceofinvestorconfidence.Tothisend,CrescentPointhasestablishedastrongcorporategovernanceculturebuiltonintegrity,accountabilityandtransparency.Ourcommitmenttogovernanceexcellenceishighlightedthroughthefollowingmechanisms:

ROLE OF THE BOARD OF DIRECTORS

TheBoardofDirectorsisresponsiblefortheeffectivestewardshipofCrescentPointonbehalfofallunitholders.TheBoardfulfillsitsmandatethroughfivestandingsubcommittees,eachwithaclearlydefinedcharter.ThesearetheAuditCommittee,theCompensationCommittee,theReservesCommittee,theCorporateGovernanceandNominatingCommittee,andtheEnvironment,HealthandSafety(EH&S)Committee.

GOvERNANCE POLICIES

CrescentPointhasseveralkeygovernancepolicies,includingaWhistleblowerPolicy,aDisclosurePolicy,andaCodeofConduct.Thesepoliciesfacilitateanethicalandhonestbusinessenvironmentformanagementandstaffbycallingforfull,fair,accurate,andtimelypublicdisclosures;compliancewithapplicablelaws,rulesandregulations;andpromptinternalreportingofpolicyviolationstotheBoardChairandChiefFinancialOfficer.

AuDIT COmmITTEE OvERSIGHT

CrescentPoint’sAuditCommitteeassiststheBoardofDirectorsinfulfillingitsoversightresponsibilitiesbymonitoringCrescentPoint’sinternalcontrolsandbyreviewingallfinancialdisclosurespriortopublicrelease.Inaddition,theAuditCommitteereviewsandapprovesannuallytheexternalauditors’auditplanandmustapproveanynonauditworkperformedbytheexternalauditors.

BILL 198

TheOntarioSecuritiesCommissionintroducedMulti-LateralInstrument52-109in2004.ThisregulationisbeingphasedinoverseveralyearsandrequiresCrescentPoint’sChiefExecutiveOfficerandChiefFinancialOfficertocertifyonthereliabilityoffinancialdisclosuresandontheeffectivenessofcontrolssupportingthosedisclosures.During2005,theTrustcommencedacomprehensiveprogramtoformallydocumentandevaluatetheeffectivenessofallorganizationalprocessesandcontrolsthatimpactitscorporatedisclosures.By2006,theTrustwasfullycompliantwithcertificationrequirements forBill198.

For2007,CrescentPoint’sChiefExecutiveOfficerandChiefFinancialOfficerhaveconcludedthatCrescentPoint’sdisclosurecontrolsandproceduresareeffectiveandprovidereasonableassurancethatmaterialinformationrelatedtoCrescentPointismadeknowntothembyotherswithintheTrust.TheybelievethatinternalcontrolsprovidereasonableassuranceregardingthereliabilityoftheTrust’sfinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithCanadianGAAP.

During2007,theTrustengagedexternalconsultantstoassistindocumentingandassessingtheTrust’sdesignofinternalcontrolsoverfinancialreporting.NomaterialchangesintheTrust’sinternalcontroloverfinancialreportingwereidentifiedduringtheyearendedDecember31,2007thathasmateriallyaffected,orarereasonablylikelytomateriallyaffect,theTrust’sinternalcontroloverfinancialreporting.


ENVIRONMENT,HEALTHANDSAFETYThehealthandsafetyofemployees,contractors,visitorsandthepublic,aswellastheprotectionoftheenvironment,isofutmostimportancetoCrescentPoint.TheTrustendeavourstoconductitsoperationsinamannerthatwillminimizebothadverseeffectsandconsequencesofemergencysituationsby:

• Complyingwithgovernmentregulationsandstandards;

• Conductingoperationsconsistentwithindustrycodes,practicesandguidelines;

• Ensuringprompt,effectiveresponseandrepairtoemergencysituationsandenvironmentalincidents;

•ProvidingtrainingtoemployeesandcontractorstoensurecompliancewithTrustsafetyandenvironmentalrulesandprocedures;

• Promotingtheaspectsofcarefulplanning,goodjudgment,implementationoftheTrust’sprocedures,andmonitoringTrustactivities;

• Communicatingopenlywithmembersofthepublicregardingouractivities;and

• AmendingtheTrust’spoliciesandproceduresasmayberequiredfromtimetotime.

CrescentPointbelievesthatallemployeesplayavitalroleinachievingexcellenceinenvironmental,healthandsafetyperformance.Thisisbestachievedthroughcarefulplanningandthesupportandactiveparticipationofeveryoneinvolved.


MANAGEMENT’SDISCUSSION ANDANALYSISManagement’sdiscussionandanalysis(“MD&A”)isdatedMarch12,2008andshouldbereadinconjunctionwiththeauditedconsolidatedstatementsfortheyearendedDecember31,2007forafullunderstandingofthefinancialpositionandresultsofoperationsofCrescentPointEnergyTrust(“CrescentPoint”orthe“Trust”).

NON-GAAP FINANCIAL mEASuRES

Throughoutthisdiscussionandanalysis,CrescentPointusesthetermscashflowfromoperations,cashflowfromoperationsperunit,cashflowfromoperationsperunit–diluted,netdebt,marketcapitalizationandtotalcapitalization.ThesetermsdonothaveanystandardizedmeaningasprescribedbyCanadiangenerallyacceptedaccountingprinciples(“GAAP”)andthereforetheymaynotbecomparablewiththecalculationofsimilarmeasurespresentedbyotherissuers.

Cashflowfromoperationsiscalculatedbasedoncashflowfromoperatingactivitiesbeforechangesinnon-cashworkingcapitalandassetretirementobligationexpenditures.Cashflowfromoperationsperunit–dilutediscalculatedbasedoncashflowfromoperatingactivitiesbeforechangesinnon-cashworkingcapitalandassetretirementobligationexpendituresexcludingthecashportionofunit-basedcompensation.ManagementutilizescashflowfromoperationsasakeymeasuretoassesstheabilityoftheTrusttofinancedistributions,operatingactivities,capitalexpendituresanddebtrepayments.Cashflowfromoperationsaspresentedisnotintendedtorepresentcashflowfromoperatingactivities,netearningsorothermeasuresoffinancialperformancecalculatedinaccordancewithCanadianGAAP.

Thefollowingtablereconcilesthecashflowfromoperatingactivitiestocashflowfromoperations:

($000) �007 �006 % ChangeCashflowfromoperatingactivities 332,605 177,426 �7

Changesinnon-cashworkingcapital 21,450 10,691 �0�

Assetretirementexpenditures 1,855 1,018 ��

Cashflowfromoperations 355,910 189,135 ��

Netdebtiscalculatedascurrentliabilitieslesscurrentassets,includinglongterminvestments,andexcludingriskmanagementassetsandliabilities.ManagementutilizesnetdebtasakeymeasuretoassesstheliquidityoftheTrust.Marketcapitalizationiscalculatedbyapplyingtheyearendclosingunittradingpricetothenumberoftrustunitsoutstanding.Marketcapitalizationisanindicationoftheenterprisevalue.Totalcapitalizationiscalculatedasmarketcapitalizationandcurrentliabilities,lesscurrentassetsandlongterminvestments,excludingtheriskmanagementassetandliabilities.Totalcapitalizationisusedbymanagement tomeasuretheproportionofnetdebtintheTrust’scapitalstructure.

FORwARD-LOOkING INFORmATION

Certainstatementscontainedinthisreportconstituteforward-lookingstatementsandarebasedontheTrust’sbeliefsandassumptionsbasedoninformationavailableatthetimetheassumptionwasmade.Byitsnature,suchforward-lookinginformationinvolvesknownandunknownrisks,uncertaintiesandotherfactorsthatmaycauseactualresultsoreventstodiffermateriallyfromthoseanticipatedinsuchforward-lookingstatements.TheTrustandCrescentPointResourcesInc.(“CPRI”)believetheexpectationsreflectedinthoseforward-lookingstatementsarereasonablebutnoassurancecanbegiventhattheseexpectationswillprovetobecorrectandsuchforward-lookingstatementsshouldnotbeundulyreliedupon.Thesestatementsspeakonlyasofthedateofthisreport.

Thematerialassumptionsinmakingtheseforward-lookingstatementsaredisclosedinthisanalysisundertheheadings“CashDistributions”,“CapitalExpenditures”,“AssetRetirementObligation”,“LiquidityandCapitalResources”,“CriticalAccountingEstimates”and“NewAccountingPronouncements”.

MANAGEMENT’SDISCUSSIONANDANALYSIS


Thisdisclosurecontainscertainforward-lookingestimatesthatinvolvesubstantialknownandunknownrisksanduncertainties,certainofwhicharebeyondCrescentPoint’scontrol,includingtheimpactofgeneraleconomicconditions;industryconditionsincludingchangesinlawsandregulationsincludingtheadoptionofnewenvironmentallawsandregulationsandchangesinhowtheyareinterpretedandenforced;increasedcompetitionandthelackofavailabilityofqualifiedpersonnelormanagement;fluctuationsincommodityprices,foreignexchangeorinterestrates;stockmarketvolatility;andobtainingrequiredapprovalsofregulatoryauthorities.Inaddition,therearenumerousrisksanduncertaintiesassociatedwithoilandgasoperationsandtheevaluationofoilandgasreserves.Therefore,CrescentPoint’sactualresults,performanceorachievementcoulddiffermateriallyfromthoseexpressedin,orimpliedby,theseforward-lookingestimatesandifsuchactualresults,performanceorachievementstranspireoroccur,orifanyofthemdoso,therecanbenocertaintyastowhatbenefitsCrescentPointwillderivetherefrom.

Abarrelofoilequivalent(“boe”)isbasedonaconversionrateofsixthousandcubicfeetofnaturalgastoonebarrelofoil.

RESuLTS OF OPERATIONS

PRODUCTION

CrescentPoint’sproductionincreased36percentyear-over-yearduetotheacquisitionofMissionOil&GasInc.(“Mission”),InnovaExplorationLtd.(“Innova”),severalotheracquisitionscompletedin2007andtheTrust’ssuccessfuldrillingprogram.TheMissionacquisitionclosedonFebruary9,2007andaddedover7,000boe/dofhighquality,longlife,lightoilandnaturalgasassets,includingmorethan5,000boe/dfromtheViewfieldBakkenresourceplay.TheInnovaacquisitionclosedonOctober22,2007andaddedover4,300boe/dofhighquality,longlife,lightoilandnaturalgasassets,includingmorethan2,800boe/dfromtheViewfieldBakkenresourceplay.TheseacquisitionsaddedanewcoreareafortheTrustintheViewfieldareaofsoutheastSaskatchewan.ContributingtotheincreaseinproductionwereminorpropertyacquisitionsintheViewfieldBakkenareaanddrillingof149 (107.0net)wellsfocusedprimarilyinsoutheastSaskatchewan.

TheTrust’sweightingtooilincreasedto87percentforthe2007year,athreepercentincreaseover2006.TheincreaseintheTrust’soilweightingisprimarilytheresultoftheMissionandInnovaacquisitionswhichwerefocusedonlightoilassets.

�007 �006 % ChangeCrudeoilandNGL(bbls/d) 24,349 17,417 40

Naturalgas(mcf/d) 22,610 19,833 14

Total(boe/d) 28,117 20,723 36

CrudeoilandNGL(%) �7 84 3

Naturalgas(%) �3 �6 (3)

Total(%) �00 �00 -

MARKETINGANDPRICES

TheTrust’ssellingpriceforoilincreased12percentover2006,primarilyduetonarrowercorporateoildifferentialsasincreasesintheUS$benchmarkpricewerelargelyoffsetbyastrongerCanadiandollar.CrescentPoint’soildifferentialnarrowedsignificantlyfrom$15.25perbblin2006to$10.52perbblin2007,duetobothchangesinmarketconditionsandanimprovementintheTrust’scrudeoilqualityasaresultoftheViewfieldBakkenlightoilpropertiesacquiredthroughtheMissionandInnovaacquisitions.

TheTrust’saveragesellingpriceforgaswascomparabletothe2006yearwithaslightincreaseofthreepercent.ThiscomparestoatwopercentdeclineintheAECOdailygasprice.ThevariationintheTrust’sgaspricecomparedtotheAECOdailypricereflectstheTrust’sportfolioofgasmarketingcontractsandtheadditionofhighheatcontentgasproductionassociatedwiththeacquiredViewfieldBakkenarea.



AVERAGESELLINGPRICES (�) �007 �006 % ChangeCrudeoilandNGL($/bbl) 67.33 60.03 ��Naturalgas($/mcf) 6.52 6.33 3Total($/boe) 63.55 56.52 ��

(1)Theaveragesellingpricesreportedarebeforerealizedfinancialinstrumentlossesandtransportationcharges.

BENCHMARKPRICING �007 �006 % ChangeWTIcrudeoil(US$/bbl) 72.40 66.25 �

WTIcrudeoil(Cdn$/bbl) 77.85 75.28 3

AECOnaturalgas (�)(Cdn$/mcf) 6.44 6.54 (�)

Exchangerate–US$/Cdn$ 0.93 0.88 6

(1)TheAECOnaturalgaspricereportedistheaveragedailyspotprice.

FINANCIALINSTRUMENTSANDRISKMANAGEMENT

ManagementofcashflowvariabilityisanintegralcomponentofCrescentPoint’sbusinessstrategy.ChangingbusinessconditionsaremonitoredregularlyandreviewedwiththeBoardofDirectorstoestablishriskmanagementguidelinesusedbymanagementincarryingouttheTrust’sstrategicriskmanagementprogram.Theriskexposureinherentinmovementsinthepriceofcrudeoilandnaturalgas,fluctuationsintheUS/Cdndollarexchangerate,changesinthepriceofpowerandinterestratemovementsonlong-termdebtareallproactivelymanagedbyCrescentPointthroughtheuseofderivativeswithreputable,financiallysoundcounterparties.TheTrustconsidersthesecontractstobeaneffectivemeanstomanagecashflow.

TheTrust’scrudeoilandnaturalgasfinancialinstrumentsarereferencedtoWTIandAECO,unlessotherwisenoted.CrescentPointutilizesavarietyoffinancialinstrumentsincludingswaps,collarsandputstoprotectagainstdownwardcommoditypricemovementswhileprovidingtheopportunityforsomeparticipationduringperiodsofrisingprices.

CrescentPointhadarealizedfinancialinstrumentlossforoilof$10.8millionforthe2007yearcomparedtoa$30.4millionlossin2006.Thedecreaseinthelossisattributabletohigheraveragefinancialinstrumentpricesforoil.TheTrust’seffectivefinancialinstrumentoilpriceincreasedapproximately$11.98perbarrel,from$63.24perbarrelin2006to$75.22perbarrelin2007.

Thefollowingisasummaryoftherealizedfinancialinstrumentgains(losses)onoilandgascontracts:

($000,exceptperboeandvolumeamounts) �007 �006 % ChangeAveragecrudeoilvolumeshedged(bbls/d) 11,190 6,917 6�

Crudeoilrealizedfinancialinstrumentloss (10,752) (30,410) (65)

perbbl (1.21) (4.78) (75)

Averagenaturalgasvolumeshedged(GJ/d) 3,173 ��7 246

Naturalgasrealizedfinancialinstrumentgain 853 �7 ��0

permcf 0.10 0.01 �00

Averagebarrelsofoilequivalenthedged(boe/d) 11,691 7,062 66

Totalrealizedfinancialinstrumentloss (9,899) (30,323) (67)

perboe (0.96) (4.01) (76)

TheTrusthasnotdesignatedanyofitsriskmanagementactivitiesasaccountinghedgesundertheCanadianInstituteofCharteredAccountants(the“CICA”)section3855and,accordingly,hasmarked-to-marketitsfinancialinstruments.TheTrust’sunrealizedfinancialinstrumentslossforthe2007yearwas$105.4millioncomparedtoa$13.9millionunrealizedfinancialinstrumentgainin2006.Thelossforthe2007yearisattributabletothesignificantincreaseintheCdn$WTIbenchmarkpriceatDecember31,2007comparedtoDecember31,2006,andanincreaseinthevolumehedged,partiallyoffsetbyanincreaseintheaveragehedgeprice.CrescentPointhasthefollowingfinancialinstrumentcontractsinplaceasatMarch3,2008:



FINANCIALWTICRUDEOILCONTRACTS-CANADIANDOLLAR

Term ContractVolume (bbls/d)

Average SwapPrice ($Cdn/bbl)

Average Bought

Put Price ($Cdn/bbl)

Average SoldCall

Price ($Cdn/bbl)

Average PutPremium ($Cdn/bbl)

�00�January–June Swap 1,000 72.73January–September Swap 250 68.10January–December Swap 7,000 77.73February–December Swap 500 93.00April–December Swap 750 89.70July–December Swap 1,000 73.52October–December Swap 250 70.80January–June Collar 250 65.00 82.00January–December Collar 3,500 73.50 88.57July–December Collar 250 70.00 91.00January–December Put 3,500 72.58 (6.66)2008 Weighted Average 16,521 78.48 72.85 88.44 (6.66)�00�January–March Swap 2,750 77.68April–June Swap 2,750 77.58January–June Swap 1,250 74.99July–September Swap 3,000 74.07July–December Swap 1,000 76.41October–December Swap 3,000 74.37January–December Swap 4,000 82.78January–March Collar 250 75.00 87.00April–June Collar 250 75.00 83.00January–June Collar 1,250 70.00 81.01January–September Collar 250 70.00 79.00January–December Collar 3,000 74.25 89.05July–September Collar 250 70.00 84.05July–December Collar 1,250 69.00 80.37October–December Collar 500 70.00 85.93January-December Put 3,250 70.46 (6.03)2009 Weighted Average 16,000 79.28 71.78 86.20 (6.03)�0�0January–March Swap 3,500 76.22April–June Swap 2,750 74.38January–September Swap 2,250 79.51April–September Swap 750 75.53July–September Swap 2,750 75.00October–December Swap 5,250 89.57January–December Swap 750 89.00January–June Collar 500 70.00 80.50January–September Collar 2,000 73.75 86.26July–September Collar 500 70.00 81.75October–December Collar 2,250 80.22 97.48January–December Collar 1,000 83.50 96.63January–September Put 1,000 71.00 (4.82)October–December Put 1,000 72.00 (4.85)January–December Put 750 73.00 (4.22)2010 Weighted Average 11,561 80.99 75.48 90.54 (4.56)�0��January–June Swap 500 96.20January - June 2011 Weighted Average 500 96.20



FINANCIALAECONATURALGASCONTRACTS-CANADIANDOLLAR

ContractVolume (GJ/d)

Average Bought

Put Price ($Cdn/GJ)

Average SoldCall

Price ($Cdn/GJ)Term

�00�January–March Collar 2,000 6.75 8.00

April–October Collar 2,000 6.75 7.75

2008January-OctoberWeightedAverage 2,000 6.75 7.82

FINANCIALINTERESTRATECONTRACTS-CANADIANDOLLAR

ContractPrincipal ($Cdn)

FixedAnnual

Rate (%)TermJanuary2008–May2008 Swap 50,000,000 4.41

January2008–February2009 Swap 50,000,000 4.37

January2008–November2010 Swap 75,000,000 4.35

FINANCIALPOWERCONTRACTS-CANADIANDOLLAR

ContractVolume (MW/h)

FixedRate ($Cdn/MW/h)Term

January2008–December2008 Swap 3.0 63.25

PHYSICALPOWERCONTRACTS–CANADIANDOLLAR





REVENUES

Oilrevenueswere$598.4millionin2007comparedwith$381.7millionin2006.The57percentincreaseinoilsalesrelatesprimarilytoincreasesinproductionresultingfromthe2007acquisitionsofMissionandInnova,severalotheracquisitionscompletedin2007andtheTrust’ssuccessfuldrillingprogram.AnarrowingofcorporateoildifferentialsduetoimprovementsintheTrust’scrudequalityalongwithhighermarketoilpricesfurthercontributedtotheincreaseinrevenuesthroughouttheyear.

Naturalgassalesincreased17percentinthe2007yearprimarilyduetotheincreaseinproductionintheyearresultingfrom2007acquisitionsandtheTrust’ssuccessfuldrillingprogram.

($000)(�) �007 �006 % ChangeCrudeoilandNGLsales 598,364 381,655 57

Naturalgassales 53,811 45,836 �7

Revenues 652,175 427,491 53

(1)Revenueisreportedbeforetransportationchargesandrealizedfinancialinstruments.



TRANSPORTATIONEXPENSES

Transportationexpenseperboeincreased28percentcomparedto2006.Theincreaserelatestopropertiesacquiredinthepastyearandtheirproximitytomarket,alongwithpipelineconstraintissuesinsoutheastSaskatchewanwhichbeganinthefourthquarterof2006andcontinuedthrough2007.GrowingproductionvolumesinsoutheastSaskatchewanandincrementalimportsfromotherareashaveexceededcapacityofthearea’smajoroilgatheringsystem,EnbridgePipelines(Saskatchewan).Effortstomaintaincrudesalesledtoincrementaltruckingcostsinthe2007year.Expansionofthegatheringsystemisexpectedtobecompletedmid-yearof2008.

($000,exceptperboeamounts) �007 �006 % ChangeTransportationexpenses 17,725 10,175 74

Perboe 1.73 1.35 ��

ROYALTYEXPENSES

Royaltieswere18percentofrevenuein2007comparedto21percentofrevenuein2006.ThedecreaseisprimarilyduetolowerroyaltyratesonthepropertiesacquiredthroughtheMissionandInnovaacquisitions.FurthercontributingtotheTrust’slowerroyaltyrateareroyaltyincentivesonnewproductionassociatedwiththeTrust’ssuccessfuldrillingprograminsoutheastSaskatchewan.

CrescentPointcompletedaninitialevaluationoftheOctober25,2007royaltyannouncementbytheProvinceofAlbertaandconcludedthattheroyaltychangeswillhaveminimalimpactontheTrust’scurrentproduction,operationsandcashflows.

($000,exceptperboeamounts) �007 �006 % ChangeTotalroyalties 118,915 90,013 3�

Asa%ofoilandgassales ��% ��% (3)

Perboe 11.59 11.90 (3)

OPERATINGEXPENSES

Operatingexpenseperboefor2007remainedconsistentwiththe2006yearwithaslightincreaseofonepercent.Theincreaseinoperatingcostsperboefortheyearreflectshighercostsexperiencedforrepairsandmaintenanceandonetimecostsfromapartneronanon-operatedpropertyduringthefirsthalfof2007.TheseincreaseswerepartiallyoffsetbythereductioninoperatingcostsresultingfromtheMissionandInnovaacquisitionsandtheloweroperatingcoststructureassociatedwiththeViewfieldBakkenarea.

($000,exceptperboeamounts) �007 �006 % ChangeOperatingexpenses 94,918 69,424 37

Perboe 9.25 9.18 �



NETBACKS

CrescentPoint’snetback,afterrealizedfinancialinstruments,forthe2007yearincreased33percentfrom$30.08perboeto$40.02perboeprimarilyduetothehighnetbackproductionassociatedwiththeViewfieldBakkenareaacquiredin2007.TheViewfieldBakkenoperatingnetbackrealizedfor2007was$62.09perboe.Alsocontributingtotheimprovednetbackwerelowerrealizedfinancialinstrumentlossesin2007resultingfromhigherfinancialinstrumentprices.

CrudeOil andNGL ($/bbl)

Natural Gas

($/mcf)

�007 Total

($/boe)

�006 Total

($/boe)%

ChangeAveragesellingprice 67.33 6.52 63.55 56.52 ��

Royalties (12.06) (1.42) (11.59) (11.90) (3)

Operatingexpenses (8.97) (1.84) (9.25) (9.18) �

Transportation (1.79) (0.22) (1.73) (1.35) ��

Netbackpriortorealizedfinancialinstruments 44.51 3.04 40.98 34.09 �0

Realizedgain(loss)onfinancialinstruments (1.21) 0.10 (0.96) (4.01) (76)

Netback 43.30 3.14 40.02 30.08 33

GENERALANDADMINISTRATIVEEXPENSES

Generalandadministrativeexpenseperboeforthe2007yeardecreasedsevenpercentfrom2006.Thedecreaseistheresultofhigherlegalandprofessionalfeesin2006thatwereincurredinpreparationfortheMarch2007reorganization.Inaddition,theacquisitionscompletedintheyearbytheTrusthaveaddedsignificantproductionvolumeswithminimalincrementalgeneralandadministrativeexpenses.

Capitalizedgeneralandadministrativeexpenseincreasedby78percentin2007from$2.6millionto$4.6million.Thisreflectsthesignificantincreaseintheacquisitionanddevelopmentcapitalexpenditurelevelsin2007.

($000,exceptperboeamounts) �007 �006 % ChangeGeneralandadministrativecosts 19,965 14,863 34

Capitalized (4,607) (2,591) 7�

Generalandadministrativeexpenses 15,358 12,272 25

Perboe 1.50 1.62 (7)

RESTRICTEDUNITBONUSPLAN

TheTrusthasaRestrictedUnitBonusPlanandunderthetermsofthisplan,theTrustmaygrantrestrictedunitstodirectors,officers,employeesandconsultants.Restrictedunitsvestat331/3percentoneachofthefirst,secondandthirdanniversariesofthegrantdateoratadateapprovedbytheBoardofDirectors.Restrictedunitholdersareeligibleformonthlydistributions,immediatelyupongrant.

ThemaximumnumberoftrustunitsissuableundertheRestrictedUnitBonusPlanis5,000,000units.TheTrusthad1,486,050restrictedunitsoutstandingatDecember31,2007comparedwith1,043,628unitsoutstandingatDecember31,2006.

TheTrustrecordedcompensationexpenseandcontributedsurplusof$14.4millionin2007,basedonfairvalueoftheunitsonthedateofgrant,anincreaseof28percentover2006.Thecashdistributionsonrestrictedunitsincreasedfrom$1.2millionforthe2006yearto$2.0millionforthe2007year.Theincreaseinthenumberofrestrictedunitsandcorrespondingunit-basedcompensationexpenseisattributabletothegrowthintheTrust’soperationsandindustrypressurestoretainandattracthighqualityemployees.



($000,exceptperboeamounts) �007 �006 % ChangeCashunit-basedcompensationexpense 1,997 1,162 7�

Non-cashunit-basedcompensationexpense 14,378 11,254 ��

Total 16,375 12,416 3�

Perboe 1.60 1.64 (�)

INTERESTEXPENSE

Interestexpenseperboeincreased17percentin2007.ThisincreaseisattributabletoincreasedamountsdrawnoncreditfacilitiesreflectingthegrowthoftheTrustandhighereffectiveinterestratesresultingfromanincreaseintheprimeratethroughthemajorityoftheyear.CrescentPointactivelymanagesexposuretofluctuationsininterestratesthroughinterestrateswapsandshorttermbanker’sacceptances(refertoFinancialInstrumentsandRiskManagementsectionabove).

($000,exceptperboeamounts) �007 �006 % ChangeInterestexpense 21,805 13,673 59

Perboe 2.12 1.81 �7

DEPLETION,DEPRECIATIONANDAMORTIZATION

Thedepletion,depreciationandamortization(“DD&A”)rateincreasedto$23.67perboeforthe2007yearfrom$18.31perboein2006.ThehigherDD&ArateisdueprimarilytotheMissionandInnovaacquisitionscompletedin2007whichcarriedahighercostperboethantheTrust’sexistingproperties.

($000,exceptperboeamounts) �007 �006 % ChangeDepletion,depreciationandamortization 242,923 138,511 75

Perboe 23.67 18.31 ��

TAXES

CapitalandothertaxexpenseconsistsofSaskatchewanCorporationCapitalTaxResourceSurcharge.Capitalandothertaxexpenseforthe2007yearincreased36percentduetoanincreaseintheTrust’sSaskatchewanbasedrevenuesprimarilyasaresultoftheMissionandInnovaacquisitionscompletedin2007.

In2007,afutureincometaxexpenseof$21.2millionwasincludedinincomecomparedtoa$16.6millionrecoveryin2006.

OnMarch1,2007,theTrustcompletedareorganizationoftheTrustanditssubsidiaries.ThereorganizationresultedintheexistingbusinessoftheTrust,whichwascarriedonthroughlimitedpartnershipsandcorporations,beingcarriedonthroughalimitedpartnershipindirectlyownedbytheTrust.IntheTruststructure,paymentsaremadebetweentheoperatingentitiesandtheTrusttransferringboththeincomeandtaxliabilitytotheunitholders.Asaresultofthereorganization,CrescentPointrecordedafuturetaxrecoveryof$158.8millioninthefirstquarter.

OnOctober31,2006,theFinanceMinisterannouncedtheFederalGovernment’splanregardingthetaxationofincometrusts.Currently,distributionspaidtounitholders,otherthanreturnsofcapital,areclaimedasadeductionbytheTrustinarrivingattaxableincomewherebytaxiseliminatedattheTrustlevelandispaidbytheunitholders.OnJune12,2007,theFederalGovernment’sBillC-52,whichincludedlegislationtotaxpubliclytradedtrusts,wassubstantivelyenactedasdefinedunderCanadianGAAP.Asaresultofthisnewlegislation,anew31.5percenttaxwillbeappliedtodistributionsfromCanadianpublicincometrusts.ThenewtaxisnotexpectedtoapplytoCrescentPointuntilJanuary1,2011asatransitionperiodappliestopubliclytradedtruststhatexistedpriortoNovember1,2006.Asaresultofthischangeinlegislation,afutureincometaxliabilityandfuturetaxexpenseof$152.3millionwas



recognizedinthesecondquarterof2007.ThefutureincometaxrepresentsthetaxabletemporarydifferencesofCrescentPointtaxeffectedat31.5percent,whichistheratethatwasapplicabletotrustsin2011underlegislationinplaceinJune2007.

OnOctober30,2007,theFinanceMinisterannounced,aspartofthe2007EconomicStatement,changestothetaxsystemincludingreductionofthecorporateincometaxratefrom22.1percentto15percentby2012.Thereductionswillbephasedinbetween2008and2012.LegislationenactingthemeasuresannouncedintheEconomicStatementreceivedRoyalAssentonDecember14,2007.Thereductioninthegeneralcorporatetaxratewillalsoapplytothetaxationofincometrusts,reducingthecombinedfederalanddeemedProvincialtaxratefordistributionsto29.5percentin2011and28percentin2012.Theseratechangeswerereflectedinthefutureincometaxprovisionrecordedinthefourthquarter.

TheTrustrecordedfuturetaxexpensesof$18.0millioninthefourthquarterof2007primarilyasaresultofthechangeintemporarydifferences,partiallyoffsetbythefuturetaxrecoveryof$23.3millionresultingfromthefederaltaxratereductions.

AtDecember31,2007,theTrusthadtaxpoolsofapproximately$1.0billionconsistingofintangibleresourcepools,tangiblepoolsandtrustunitissuecosts.

OnFebruary26,2008,thefederalgovernmentannouncedthatbeginningwiththe2009taxationyear,theprovincialcomponentofthetrusttaxwillbebasedonthegeneralprovincialcorporatetaxrateineachprovinceinwhichthetrusthasapermanentestablishmentinsteadofthedeemed13percentprovincialtaxrate.OnDecember20,2007,theFinanceMinisterannouncedtechnicalamendmentstoprovidesomeclarificationtotheTrusttaxlegislation.AspartoftheannouncementtheMinisterindicatedthatthefederalgovernmentintendstoprovidelegislationin2008topermitincometruststoconverttotaxableCanadiancorporationswithoutanyunduetaxconsequencestoinvestorsortheTrust.ManagementandtheBoardofDirectorscontinuetoreviewtheimpactofthistaxonourbusinessstrategy.

($000) �007 �006 % ChangeCapitalandothertaxexpense 15,394 11,314 36

Futureincometaxexpense(recovery) 21,173 (16,560) (��)

CASHFLOWANDNETINCOME

Cashflowfromoperationsincreasedfrom$189.1millionin2006to$355.9millionin2007.Cashflowfromoperationsperunit-dilutedincreased18percentfrom$2.98to$3.51perunit-diluted.Theincreaseincashflowfromoperationsandcashflowperunit-dilutedisprimarilytheresultoftheTrust’sincreasedproductionattributabletotheMissionandInnovaacquisitionsandincreasedcorporatenetbacksdrivenbyimprovedcorporateoildifferentialsreflectingthelightoilproductionintheViewfieldBakkencoreareaandhigheroilprices.

Cashflowfromoperatingactivitiesincreasedfrom$177.4millionin2006to$332.6millionin2007.Cashflowfromoperatingactivitiesperunit-dilutedincreased18percentfrom$2.79to$3.28perunit-diluted.Theincreaseincashflowfromoperatingactivitiesandcashflowfromoperatingactivitiesperunit-dilutedisaresultofthesamefactorsdescribedabove,offsetslightlybychangesinworkingcapital.

Netincomeforthe2007yeardecreasedtoalossof$32.2millionfromincomeof$68.9millionin2006,primarilyasaresultofthe$105.4millionunrealizedfinancialinstrumentlossin2007comparedtoa$13.9millionunrealizedfinancialinstrumentgainin2006.Thisfluctuationwastheresultofahigher$CdnWTIbenchmarkpriceatDecember31,2007comparedtotheprioryearandhigherhedgedvolumes.

AsnotedintheFinancialInstrumentsandRiskManagementsection,theTrusthasnotdesignatedanyofitsriskmanagementactivitiesasaccountinghedgesundertheCanadianInstituteofCharteredAccountants(the“CICA”)section3855and,accordingly,



hasmarked-to-marketitsfinancialinstruments.Changesintheforwardvalueofthesefinancialinstrumentsarerecordedinnetincome.TheTrust’soffsettingphysicalsalesandassetsarenotmarked-to-marketand,assuch,changesintheforwardvalueoftheseassetsarenotrecordedinnetincome.Asaresult,changesintheforwardpriceofcrudeoilandnaturalgasimpacttheTrust’snetincomefromyeartoyear.ExcludingtheTrust’sunrealizedfinanciallossof$105.4million,netincomefor2007was$73.3million.

($000,exceptperunitamounts) �007 �006 % ChangeCashflowfromoperations 355,910 189,135 ��

Cashflowfromoperationsperunit–diluted 3.51 2.98 ��

Cashflowfromoperatingactivities 332,605 177,426 �7

Cashflowfromoperatingactivitiesperunit–diluted 3.28 2.79 ��

Netincome(loss) (32,167) 68,947 (147)

Netincome(loss)perunit–diluted (�) (0.32) 1.05 (�30)

(1)Netincomeperunit–dilutediscalculatedbydividingthenetincomebeforenon-controllinginterestbythedilutedweightedaveragetrustunits,excludingthecashportionof unitbasedcompensation.

CASH DISTRIBuTIONS

TheTrustmaintainedmonthlydistributionsof$0.20perunitduring2007.CrescentPoint’sriskmanagementstrategyminimizescorporatepricevolatilitywhichhasprovidedtheTrustwiththeabilitytomaintainsustainabledistributionsthroughperiodsoffluctuatingmarketprices.

Cashdistributionsincreasedby63percentin2007comparedto2006.Theriseindistributionsrelatestotheincreaseinthetrustunitsoutstandingprimarilyasaresultof2007corporateacquisitions,aboughtdealequityfinancinginSeptember2007andtheTrust’sdistributionreinvestmentprograms.

Thefollowingtableprovidesareconciliationofcashdistributions:

($000,exceptperunitamounts) �007 �006 % ChangeAccumulatedcashdistributions,beginningofyear 290,442 140,165 �07

Cashdistributionsdeclaredtounitholders (�) 245,108 150,277 63

Accumulatedcashdistributions,endofyear 535,550 290,442 84

Accumulatedcashdistributionsperunit,beginningofyear 7.26 4.86 49

Cashdistributionsdeclaredtounitholdersperunit (�) 2.40 2.40 -

Accumulatedcashdistributionsperunit,endofyear 9.66 7.26 33

(1) Cashdistributionsreflectthesumoftheamountsdeclaredmonthlytounitholders,includingdistributionsundertheDRIPandPremiumDRIPplans.

Forthe2007year,cashflowfromoperatingactivities(includingchangesinnon-cashworkingcapital)of$332.6millionexceededcashdistributionsof$245.1million.Thiswasconsistentwiththetrendin2006and2005.

Cashdistributionsof$245.1millionforthe2007yearexceededthenetlossof$32.2million.Thisisconsistentwithdistributionsinthe2005and2006years.Netincomeincludessignificantnon-cashchargesthatdonotimpactcashflowwhichin2007were$388.1millionfortheyear.Thenon-cashchargesalsoincludefluctuationsinfutureincometaxesduetochangesintaxratesandtaxrules,unrealizedgainsandlossesonfinancialinstrumentsandunit-basedcompensationwhichincludesasignificantnon-cashcomponent.


AR | 07 Crescent Point Energy Trust 3�

CrescentPointdoesnotanticipatecashdistributionswillexceedcashflowfromoperatingactivities,howeveritislikelytheywillexceednetincomeasnotedabovegiventhesignificantnon-cashitemsthatarerecordedsuchasfutureincometaxes,DD&A,unit-basedcompensationandunrealizedlossesonfinancialinstruments.Further,thecashflowfromoperatingactivitiescanbesignificantlyimpactedbylargefluctuationsinworkingcapitaladjustmentsthatmayvaryquarter-to-quarterbutleveloutovertheperiod.Thedistributionspaidtounitholdersrepresentareturnontheirinitialinvestmentandisnotintendedtobeareturnofcapital.

AnobjectiveoftheTrust’sdistributionpolicyistoprovideunitholderswithrelativelystableandpredictablemonthlydistributions. AnadditionalobjectiveistoretainaportionofcashflowtofundongoingdevelopmentandoptimizationprojectsdesignedtoenhancethesustainabilityoftheTrust’scashflow.AlthoughtheTruststrivestoprovideunitholderswithstableandpredictablecashflows,thepercentageofcashflowfromoperationspaidtounitholderseachmonthmayvaryaccordingtoanumberoffactors,includingfluctuationsinresourceprices,exchangeratesandproductionrates,reservesgrowth,thesizeofdevelopmentdrillingprogramsandtheportionthereoffundedfromcashflowandtheoveralllevelofdebtoftheTrust.TheactualamountofthedistributionsareatthediscretionoftheBoardofDirectors.Intheeventthatcommoditypricesarehigherthananticipatedandacashsurplusdevelops,suchsurplusmaybeusedtoincreasedistributions,reducedebtand/orincreasethecapitalprogram.

TheTrusthasastrongbalancesheetandabalanced3.5yearderivativeprofileandis,therefore,wellpositionedtosustaindistributionsovertimeasCrescentPointcontinuestoexploitanddevelopitsassetbaseandactivelyidentifyandevaluateacquisitionopportunities.Asdiscussedabove,therearemanyfactorsimpactingtheTrust’sabilitytosustaindistributions.TheTrustcontinuestomonitorthesefactorsinconnectionwithsettingdistributionlevels.

�007 �006 2005Cashflowfromoperatingactivities 332,605 177,426 94,247

Netincome(loss) (32,167) 68,947 38,509

Cashdistributionspaidorpayable 245,108 150,277 74,591

Excess(shortfall)ofcashflowsfromoperatingactivitiesovercashdistributionspaid 87,497 27,149 19,656

Excess(shortfall)ofnetincome(loss)overcashdistributionspaid (277,275) (81,330) (36,082)

TAxATION OF CASH DISTRIBuTIONS

Cashdistributionsarecomprisedofareturnoncapitalportion(taxable)andareturnofcapitalportion(taxdeferred).ForcashdistributionsreceivedbyCanadianresidentsoutsideofaregisteredpensionorretirementplaninthe2007taxationyear,thedistributionsare75percenttaxablefortheJanuary1–March1,2007taxationyearand100percenttaxableforthe March2,2007–December31,2007taxationyear,forCanadianincometaxpurposes.

During2007,acorporatereorganizationoftheTrustanditssubsidiarieswascompleted.Asaresultofthisreorganization,the Trusthadtwotaxationyearswithinthe2007calendaryear.ThefirstisfromJanuary1–March1,2007andthesecondisfrom March2–December31,2007.Theamountofthedistributionswhicharetaxableineachofthetwotaxationyearsisoutlinedin thetablebelow.UnitholderswhoheldtheirunitsthroughouttheyearwillreceiveaseparateT3slipforeachofthetaxationyears.


3� Crescent Point Energy Trust AR | 07

ThefollowingtableoutlinesthebreakdownofthecashdistributionsperunitpaidorpayablebytheTrustwithrespecttotherecorddatesfromJanuary31,2007toDecember31,2007forCanadianincometaxpurposes:

RecordDate PaymentDate

TaxableAmount (Box26Other

Income)TaxableCapitalGain

Amount(�)

TaxDeferredAmount (Box42Returnof

Capital)TotalCashDistribution

January31,2007 February15,2007 $0.1500 - $0.0500 $0.20

February28,2007 March15,2007 $0.1500 - $0.0500 $0.20

March31,2007 April16,2007 $0.1960 $0.0040 - $0.20

April30,2007 May15,2007 $0.1960 $0.0040 - $0.20

May31,2007 June15,2007 $0.1960 $0.0040 - $0.20

June30,2007 July16,2007 $0.1960 $0.0040 - $0.20

July31,2007 August15,2007 $0.1960 $0.0040 - $0.20

August31,2007 September17,2007 $0.1960 $0.0040 - $0.20

September30,2007 October15,2007 $0.1960 $0.0040 - $0.20

October31,2007 November15,2007 $0.1960 $0.0040 - $0.20

November30,2007 December17,2007 $0.1960 $0.0040 - $0.20

December31,2007 January15,2008 $0.1960 $0.0040 - $0.20

TOTAL PER TRUST UNIT $2.26 $0.04 $0.10 $2.40

(1)Thetaxablecapitalgainrepresents50percentofthecapitalgainwhichwillbereportedinBox21oftheT3slips.

INvESTmENTS IN mARkETABLE SECuRITIES

DuringtheyearendedDecember31,2007,theTrustownedsharesofpubliclytradedexplorationandproductioncompanies.Inaccordancewithnewaccountingstandardsforfinancialinstruments,inthefirstquarterof2007,theTrustmarked-to-marketitsinvestmentinmarketablesecurities.Thecarryingamountof$171,000atDecember31,2006wasincreasedto$1.6millionatJanuary1,2007toreflectthefairvalueoftheinvestment.Theunrealizedgainof$1.5millionatJanuary1,2007wasrecordedthroughretainedearnings.Inthesecondquarterof2007,theTrustsoldthesecuritiesforarealizedgainof$1.4million.

Inthefourthquarterof2007,theTrustreceived1.5millionsharesofapubliclytradedexplorationandproductioncompanyfor$1.00pershareor$1.5millioninconnectionwithadispositionofproperties.ThefairvalueatDecember31,2007was$1.4million,resultinginanunrealizedlossoninvestmentof$150,000recordedthroughtheincomestatement.

LONG-TERm INvESTmENTS

DuringtheyearendedDecember31,2007,theTrustpurchased2.2millionsharesofInnovaExplorationLtd.apubliclytradedexplorationandproductioncompanyforanaveragepriceofapproximately$7.51pershareor$16.6million.TheTrustacquiredallremainingsharesofInnovaExplorationLtd.inOctober2007(refertoCapitalExpendituressectionbelow).

Duringthefourthquarterof2007,theTrustpurchased2.0millionsharesofPilotEnergyLtd.(“Pilot”),apubliclytradedexplorationandproductioncompanyforanaveragepriceofapproximately$2.90pershareor$5.9million.TheTrustacquiredtheremainingsharesonJanuary16,2008,withtheclosingoftheacquisitionofPilot(refertoSubsequentEventNote17(b)).ThefairvalueatDecember31,2007was$6.4millionresultinginanunrealizedgainoninvestmentof$470,000recordedthroughtheincomestatement.



CAPITAL ExPENDITuRES

CURRENTYEAR

TheTrustclosedthreecorporateacquisitionsin2007fornetconsiderationofapproximately$1.0billionincludingclosingadjustmentsandnetdebtassumed($1.2billionwasallocatedtoproperty,plantandequipment).TheTrustalsoclosedpropertyacquisitionsfortotalconsiderationofapproximately$20.4million,apropertydispositionfor$3.4million,andrecordedpurchasepriceadjustmentsonpreviouslyclosedacquisitionsfortheyearendedDecember31,2007of$1.8million($20.6millionwasallocatedtoproperty,plantandequipment,netofdispositions).Theacquisitionscompletedin2007werepredominantlyfocusedintheViewfieldBakkenareaofsoutheastSaskatchewan.

OnFebruary9,2007,theTrustclosedtheacquisitionofMissionOil&GasInc.,apubliclytradedcompanywithpropertiesintheViewfieldareaofsoutheastSaskatchewanforconsiderationofapproximately$627.8million,includingclosingadjustmentsandnetdebtassumed.Theacquisitionaddedproductionof7,000boe/d,includingmorethan5,000boe/dfromtheBakkenresourceplay.ThepurchasewasfundedthroughtheTrust’sexistingbanklinesandtheissuanceofapproximately29.2milliontrustunits.

OnSeptember5,2007,theTrustclosedtheacquisitionofaprivatecorporationwithpropertiesintheWilmarandBrowningareasofsoutheastSaskatchewanforconsiderationofapproximately$18.9millionincludingnetdebtassumed.Thepurchasewasfundedthroughthetransferof605,815trustunitsandcashof$121,000fromtheTrust’sexistingbanklines.

OnOctober22,2007,theTrustpurchased97percentoftheissuedandoutstandingsharesofInnovaExplorationLtd.,apubliclytradedcompanywithpropertiesintheViewfieldareaofsoutheastSaskatchewan.OnOctober25,2007,theTrustacquiredtheremainingsharesoutstanding.Theshareswerepurchasedfortotalconsiderationof$402.9million,includingassumedbankdebtandworkingcapital.Theacquisitionaddedproductionof4,300boe/d,includingmorethan2,800boe/dfromtheViewfieldBakkenresourceplay.ThepurchasewaspaidthroughtheTrust’sexistingbanklines.

TheTrust’sdevelopmentcapitalexpendituresfortheyear2007were$227.9million,comparedto$110.0millionforthesameperiodin2006.In2007,149wells(107.0net)weredrilledwithasuccessrateof99percent.

SUBSEQUENTEVENTS

Subsequenttotheyearend,onJanuary14,2008,theTrustannounceditsinvestmentinShelterBayEnergyInc.(“ShelterBay”),aprivateBakkenlightoilgrowthcompany.ShelterBaywillbemanagedthroughaTechnicalServicesAgreementwithCrescentPoint,willacceleratedevelopmentoftheBakkenlightoilresourceplayinsoutheastSaskatchewanandfollowasimilarbusinessplantotheTrusttodevelop,exploitandacquirelightoilandnaturalgaspropertiesinwesternCanada.CrescentPointwillinitiallyinvestupto$60millioninShelterBay,whichwillbefinancedfromavailablelinesofcredit,andwillrepresenta20percentinterestinShelterBay.

InconnectionwiththeShelterBayannouncement,CrescentPointannouncedthattheTrusthadenteredintoanagreement(the“Agreement’)withLandexPetroleumCorp.(“Landex”),aprivateoilandgascompanytoacquireallofitsissuedandoutstandingsharesbywayofaplanofarrangement(the“Arrangement”)fortotalconsiderationofapproximately$310millionwhichincludestheassumptionof$16millionofnetdebt.Landexshareholderswillreceiveamaximumof$295millioncashandupto$75millionoftrustunitsbasedonanexchangerateof0.632trustunitsforeachLandexshare.

SubsequenttotheenteringintooftheAgreement,thepartiesamendedandrestatedtheAgreement(the“AmendedAgreement’)suchthatShelterBayhasagreedtocompletetheacquisitionofLandexpursuanttotheArrangement.UnderthetermsoftheAmendedAgreement,Landexshareholderswillreceiveamaximumof$275millioncash,upto$75millionoftrustunitsbasedonanexchangerateof0.632trustunitsforeachLandexshare,andaminimumof$20milliontoamaximumof$60millionShelterBayshares.UnderthetermsoftheAmendedAgreementCrescentPointwouldacquirethenonBakkenassetsofLandexfor$80millionandShelterBaywouldacquiretheBakkenassetsofLandexfor$230million,forcombinedconsiderationof$310million. TheArrangementissubjecttoLandexshareholderapprovalandisexpectedtocloseinlateMarch2008.



Alsosubsequenttotheyearend,onJanuary16,2008,theTrustclosedtheacquisitionofPilotEnergyLtd.,apubliclytradedcompanywithpropertiesintheViewfieldBakkenareaofsoutheastSaskatchewanbywayofaPlanofArrangementfortotalconsiderationofapproximately$76.0millionbeforeclosingadjustmentsandincludingnetdebt(basedonatrustunitpriceof$22.48).ThepurchasewasfundedthroughtheTrust’sexistingbanklinesandissuanceof2.9milliontrustunits.

($000) �007 �006 % ChangeCapitalacquisitions(net) (�) (�) 1,068,406 507,929 ��0

Developmentcapitalexpenditures 227,923 109,995 �07

Capitalizedadministration 4,607 2,591 7�

Officeequipment(�) 3,258 647 404

Total 1,304,194 621,162 ��0

(1) Capitalacquisitionsrepresenttotalconsiderationforthetransactionsincludingbankdebtandworkingcapitalassumed. (2)Comparativeprioryearresultshavebeenrestatedtoconformtocurrentyearpresentation.

TheTrust’sbudgetedcapitalprogramfor2008isapproximately$225million,notincludingacquisitions.TheTrustsearchesforopportunitiesthatalignwithstrategicparametersandevaluateseachprospectonacase-by-casebasis.TheTrust’sacquisitionsareexpectedtobefinancedthroughbankdebtandnewequityissuanceswhereapplicablewithinthefederalgovernment’sSafeHarbourLimitsonequityissuance.

GOODwILL

Thegoodwillbalanceof$68.4millionasatDecember31,2007isattributabletothecorporateacquisitionsofTappitResourcesLtd.,CapioPetroleumCorporationandBulldogEnergyInc.duringtheperiod2003through2005.TheTrustperformedagoodwillimpairmenttestatDecember31,2007andnoimpairmentofgoodwillexists.

ASSET RETIREmENT OBLIGATION

Theassetretirementobligationincreasedby$20.2millionduring2007.Thisincreaserelatestoliabilitiesof$17.7millionrecordedinrespectofthreecorporateandseveralminorpropertyacquisitions(netofonedisposition)andnewwellsdrilledintheyearandaccretionexpenseof$4.4million,reducedbyactualexpendituresincurredintheyearof$1.9million.TheBoardofDirectorsandmanagementreviewtheadequacyofthefundannuallyandadjustcontributionsasnecessary.

Thereclamationfundincreasedbyapproximately$700,000during2007.Thisincreaserelatestocontributionsofapproximately$2.6million,partiallyoffsetbyexpendituresof$1.9million.TheBoardofDirectorsapprovedcontributionsof$0.25perbarrelofproductionbeginningJanuary1,2007.

LIquIDITy AND CAPITAL RESOuRCES

AtDecember31,2007,theTrusthadasyndicatedcreditfacilitywithninebanksandanoperatingcreditfacilitywithoneCanadiancharteredbank.During2007,theTrustreceivedincreasesfrom$470millionto$800millionintheamountavailableunderitscombinedcreditfacilities.TheincreaseintheborrowingbasereflectstheincreaseintheTrust’sreservebaseandtheMissionandInnovaacquisitions.AsatDecember31,2007,theTrusthadbankdebtof$595.9million,leavingunutilizedborrowingcapacityof$204.1million.

AsatDecember31,2007,CrescentPointwascapitalizedwith19percentnetdebtand81percentequity,athreepercentchangefromDecember31,2006.TheTrust’snetdebttocashflowatDecember31,2007was1.8times(December31,2006–1.2times).TheTrust’sprojectednetdebtto12monthcashflowis1.0times.



TheTrust’sabilitytoraisenewequitywillbelimitedbytheSafeHarbourLimitguidelinesasannouncedbytheFederalGovernment.TheFederalGovernment’sdecisiontotaxincometrustshascreateduncertaintyinthecapitalmarketsregardingthefutureofthetrustsector.However,CrescentPointbelievesthatithassufficientcapitalresourcestomeetitsobligationsgiventheTrust’ssignificantunutilizedborrowingcapacityavailableandsuccessraisingnewequitywithintheguidelinesasdemonstratedfrom2006throughearly2008.

CAPITALIZATIONTABLE($000,EXCEPTUNIT,PERUNITANDPERCENTAMOUNTS) December31,2007 December31,2006

Bankdebt 595,984 254,438

Workingcapital (�) 54,104 (26,533)

Netdebt(�) 650,088 227,905

Trustunitsoutstanding 113,760,732 69,531,952

Marketpriceatendofyear(perunit) 24.81 17.60

Marketcapitalization 2,822,404 1,223,762

Totalcapitalization 3,472,492 1,451,667

Netdebtasapercentageoftotalcapitalization(%) �� 6

Annualcashflowfromoperations 355,910 189,135

Netdebttocashflow (�) 1.8 1.2

(1)Workingcapitalandnetdebtincludelong-terminvestments,butexcludetheriskmanagementliabilitiesandassets. (2)Thenetdebtreflectsthefinancingofacquisitions,howeverthecashflowonlyreflectscashflowsgeneratedfromtheacquiredpropertiessincetheclosingdatesof theacquisitions.

uNITHOLDERS’ EquITy

AtDecember31,2007,CrescentPointhad113,760,732trustunitsissuedandoutstandingcomparedto69,531,952trustunitsatDecember31,2006.Theincreasebymorethan44.2milliontrustunitsrelatesprimarilytothecorporateacquisitionscompletedin2007,theboughtdealfinancinginSeptember2007andtheTrust’sdistributionreinvestmentprograms.

TheTrustissued29.2milliontrustunitstoMissionshareholdersatapriceof$17.37pertrustunitonclosingoftheacquisitiononFebruary9,2007.OnSeptember5,2007,theTrusttransferred605,815trustunitsat$20.02perunitinconnectionwiththeacquisitionofaprivatecorporationowningpropertiesintheWillmarandBrowningareasofsoutheastSaskatchewan.

TheTrustandasyndicateofunderwritersclosedaboughtdealequityfinancingonSeptember25,2007pursuanttowhichthesyndicatesold8.9milliontrustunitsforgrossproceedsof$165.1million($18.55pertrustunit).

FortheyearendedDecember31,2007,thedistributionreinvestmentandpremiumdistributionreinvestmentplansresultedinanadditional5.3milliontrustunitsbeingissuedatanaveragepriceof$18.96raisingatotalof$100.7million.Participationlevelsintheseplansaveragedapproximately44percent.Thecashraisedthroughthesealternativeequityprogramsisusedtoreducebankdebt.

InDecember2007,theTrustannouncedthatasaresultofthefederalgovernmentSafeHarbourLimitsonequityissuancesforincometrusts,theDRIP,PremiumDRIPandOptionalUnitPurchaseprogramswouldbesuspendeduntilfurthernoticebeginningwiththemonthofDecember2007.

CrescentPoint’stotalcapitalizationincreased139percentto$3.5billionatDecember31,2007comparedto$1.5billionatDecember31,2006,withthemarketvalueofthetrustunitsrepresenting81percentofthetotalcapitalization.Theincreaseincapitalizationisattributabletotheincreaseinthenumberofunitsoutstandingalongwithasignificantappreciationintheunittradingprice.During2007,theTrust’sunitstradedintherangeof$15.89to$24.93withanaveragedailytradingvolumeof510,501units.



Subsequenttotheyearend,onJanuary8,2008,theTrustandasyndicateofunderwritersclosedaboughtdealequityfinancingpursuanttowhichthesyndicatesold5.2milliontrustunitsforgrossproceedsof$125million($24.25pertrustunit).Inaddition,onJanuary16,2008,theTrustclosedtheacquisitionofPilot.TheTrustissued2.9milliontrustunitstoPilotshareholdersatapriceof$22.48pertrustunitonclosingoftheacquisition.

CONTRACTuAL OBLIGATIONS AND COmmITmENTS

TheTrusthasassumedvariouscontractualobligationsandcommitmentsinthenormalcourseofoperations.ThefollowingtablesummarizestheTrust’scontractualobligationsandcommitmentsasatDecember31,2007:

CONTRACTUALOBLIGATIONSSUMMARY($000) ExpectedPayoutDate

Total �00� 2009-2010 2011-2012 After2012

OperatingLeases(�) (�) 34,838 5,170 10,325 7,618 11,725

PremiumsonPutContracts 15,041 8,505 6,536 - -

(1) Operatingleasesincludesleasesforofficespace,equipmentandvehicles. (2) IncludedinoperatingleasesarerecoveriesofrentexpenseonofficespacetheTrusthasacquiredthroughvariousacquisitionsandhassubleasedouttoothertenants.

OFF BALANCE SHEET ARRANGEmENTS

TheTrusthasoff-balancesheetfinancingarrangementsconsistingofvariousleaseagreements.Allleaseshavebeentreatedasoperatingleaseswherebytheleasepaymentsareincludedinoperatingexpensesorgeneralandadministrativeexpensesdependingonthenatureofthelease.NoassetorliabilityvaluehasbeenassignedtotheseleasesinthebalancesheetasofDecember31,2007.AlloftheleaseagreementamountshavebeenreflectedintheContractualObligationsandCommitmentstableabove,whichwereenteredintointhenormalcourseofoperations.

CRITICAL ACCOuNTING ESTImATES

ThepreparationoftheTrust’sfinancialstatementsrequiresmanagementtoadoptaccountingpoliciesthatinvolvetheuseofsignificantestimatesandassumptions.Theseestimatesandassumptionsaredevelopedbasedonthebestavailableinformationandarebelievedbymanagementtobereasonableundertheexistingcircumstances.Neweventsoradditionalinformationmayresultintherevisionoftheseestimatesovertime.AsummaryofthesignificantaccountingpoliciesusedbyCrescentPointcanbefoundinNote2totheDecember31,2007consolidatedfinancialstatements.Thefollowingdiscussionoutlineswhatmanagementbelievestobethemostcriticalaccountingpoliciesinvolvingtheuseofestimatesandassumptions.

DEPLETION,DEPRECIATIONANDAMORTIZATION(“DD&A”)

CrescentPointfollowstheCICAaccountingguidelineAcG-16onfullcostaccountingintheoilandgasindustrytoaccountforoilandgasproperties.Underthismethod,allcostsassociatedwiththeacquisitionof,explorationfor,andthedevelopmentofnaturalgasandcrudeoilreservesarecapitalizedandcostsassociatedwithproductionareexpensed.Thecapitalizedcostsaredepletedusingtheunit-of-productionmethodbasedonestimatedprovedreservesusingmanagement’sbestestimateoffutureprices(seeOilandGasReservesdiscussionbelow).

Reserveestimatescanhaveasignificantimpactonearnings,astheyareakeycomponentinthecalculationofdepletion.AdownwardrevisioninareserveestimatecouldresultinahigherDD&Achargetoearnings.Inaddition,ifnetcapitalizedcostsaredeterminedtobeinexcessofthecalculatedceiling,whichisbasedlargelyonreserveestimates(seeAssetImpairmentdiscussionbelow),theexcessmustbewrittenoffasanexpensechargedagainstearnings.Intheeventofapropertydisposition,proceedsarenormallydeductedfromthefullcostpoolwithoutrecognitionofagainorlossunlessthereisachangeintheDD&Arateof 20percentorgreater.



ASSETRETIREMENTOBLIGATION

Uponretirementofitsoilandgasassets,theTrustanticipatesincurringsubstantialcostsassociatedwithassetretirementactivities.Estimatesoftheassociatedcostsaresubjecttouncertaintyassociatedwiththemethod,timingandextentoffutureretirementactivities.Aliabilityforthesecostsandarelatedassetarerecordedusingthediscountedassetretirementcostsandthecapitalizedcostsaredepletedonaunit-of-productionbasisovertheassociatedreservelife.Accordingly,theliability,therelatedassetandtheexpenseareimpactedbychangesintheestimatesandtimingoftheexpectedcostsandreserves(seeOilandGasReservesdiscussionbelow).

ASSETIMPAIRMENT

Producingpropertiesandunprovedpropertiesareassessedannually,oraseconomiceventsdictate,forpotentialimpairment.Impairmentisassessedbycomparingtheestimatedundiscountedfuturecashflowstothecarryingvalueoftheasset.Thecashflowsusedintheimpairmentassessmentrequiremanagementtomakeassumptionsandestimatesaboutrecoverablereserves(seeOilandGasReservesdiscussionbelow),futurecommoditypricesandoperatingcosts.Changesinanyoftheassumptions,suchasadownwardrevisioninreserves,adecreaseinfuturecommodityprices,oranincreaseinoperatingcostscouldresultinanimpairmentofanasset’scarryingvalue.

PuRChASE PRICE AllOCATION

Businessacquisitionsareaccountedforbythepurchasemethodofaccounting.Underthismethod,thepurchasepriceisallocatedtotheassetsacquiredandtheliabilitiesassumedbasedonthefairvalueatthetimeofacquisition.Theexcesspurchasepriceoverthefairvalueofidentifiableassetsandliabilitiesacquiredisgoodwill.Thedeterminationoffairvalueoftenrequiresmanagementtomakeassumptionsandestimatesaboutfutureevents.Theassumptionsandestimateswithrespecttodeterminingthefairvalueofproperty,plantandequipmentacquiredgenerallyrequiresthemostjudgmentandincludeestimatesofreservesacquired(seeOilandGasReservesdiscussionbelow),futurecommodityprices,anddiscountrates.Changesinanyoftheassumptionsorestimatesusedindeterminingthefairvalueofacquiredassetsandliabilitiescouldimpacttheamountsassignedtoassets,liabilities,andgoodwillinthepurchasepriceallocation.Futurenetearningscanbeaffectedasaresultofchangesinfuturedepletionanddepreciation,assetimpairmentorgoodwillimpairment.

GOODWILLIMPAIRMENT

Goodwillissubjecttoimpairmenttestsannually,oraseconomiceventsdictate,bycomparingthefairvalueofthereportingentitytoitscarryingvalue,includinggoodwill.Ifthefairvalueofthereportingentityislessthanitscarryingvalue,agoodwillimpairmentlossisrecognizedastheexcessofthecarryingvalueofthegoodwillovertheimpliedvalueofthegoodwill.Thedeterminationoffairvaluerequiresmanagementtomakeassumptionsandestimatesaboutrecoverablereserves(seeOilandGasReservesdiscussionbelow),futurecommodityprices,operatingcosts,productionprofiles,anddiscountrates.Changesinanyoftheseassumptions,suchasadownwardrevisioninreserves,adecreaseinfuturecommodityprices,anincreaseinoperatingcostsoranincreaseindiscountratescouldresultinanimpairmentofalloraportionofthegoodwillcarryingvalueinfutureperiods.

OILANDGASRESERVES

Reservesestimates,althoughnotreportedaspartoftheTrust’sfinancialstatements,canhaveasignificanteffectonnetearningsasaresultoftheirimpactondepletionanddepreciationrates,assetretirementprovisions,assetimpairments,purchasepriceallocations,andgoodwillimpairment(seediscussionoftheseitemsabove).IndependentpetroleumreservoirengineeringconsultantsperformevaluationsoftheTrust’soilandgasreservesonanannualbasis.However,theestimationofreservesisaninherentlycomplexprocessrequiringsignificantjudgment.Estimatesofeconomicallyrecoverableoilandgasreservesarebaseduponanumber



ofvariablesandassumptionssuchasgeoscientificinterpretation,commodityprices,operatingandcapitalcostsandproductionforecasts,allofwhichmayvaryconsiderablyfromactualresults.Theseestimatesareexpectedtoberevisedupwardordownwardovertime,asadditionalinformationsuchasreservoirperformancebecomesavailable,oraseconomicconditionschange.

FUTUREINCOMETAXES

ThedeterminationoftheTrust’sincomeandothertaxliabilitiesrequiresinterpretationofcomplexlawsandregulationsofteninvolvingmultiplejurisdictions.Alltaxfilingsaresubjecttoauditandpotentialreassessmentafterthelapseofconsiderabletime.Accordingly,theactualincometaxliabilitymaydiffersignificantlyfromthatestimatedandrecorded.

TheTrustTaxLegislationresultsinataxapplicableatthetrustleveloncertainincomefrompubliclytradedmutualfundtrustsatratesoftaxcomparabletothecombinedfederalandprovincialcorporatetaxandtreatsdistributionsasdividendstotheUnitholders.ExistingtrustswillhaveatransitionperiodandthenewtaxwillapplyinJanuary2011.

NEw ACCOuNTING PRONOuNCEmENTS

ACCOUNTINGCHANGESINTHECURRENTYEAR

Financial Instruments

OnJanuary1,2007,theTrustadoptedtheCICAHandbooksections3855“FinancialInstrumentsRecognitionandMeasurement”,3865“Hedges”,3861“FinancialInstruments–DisclosureandPresentation”,1530“ComprehensiveIncome,”and3251“Equity”.OtherthantheeffectontheInvestmentinMarketableSecuritiesasdescribedintheabovesection,theadoptionofthefinancialinstrumentsstandardshasnotaffectedthecurrentorcomparativeyearbalancesontheconsolidatedfinancialstatementsasallfinancialinstrumentsidentifiedhavebeenfairvalued.

Section3855requiresthatallfinancialassetsbeclassifiedasheld-for-trading,available-for-sale,held-to-maturity,orloansandreceivablesandthatallfinancialliabilitiesmustbeclassifiedasheld-for-tradingorother.Financialassetsandfinancialliabilitiesclassifiedasheld-for-tradingaremeasuredatfairvaluewithchangesinthosefairvaluesrecognizedinearnings.Financialassetsheld-to-maturity,loansandreceivables,andotherfinancialliabilitiesaremeasuredatamortizedcostusingtheeffectiveinterestmethodofamortization.Available-for-salefinancialassetsaremeasuredatfairvaluewithunrealizedgainsandlosses,includingchangesinforeignexchangerates,beingrecognizedinothercomprehensiveincome.Investmentsinequityinstrumentsclassifiedasavailable-for-salethatdonothaveaquotedmarketpriceinanactivemarketaremeasuredatcost.Accordingly,theinvestmentinmarketablesecuritiesbalanceof$171,000atJanuary1,2007consistingofaninvestmentinapubliclytradedexplorationandproductioncompany,wasfairvaluedatJanuary1,2007to$1.6million.Underprospectiveapplication,the$1.5milliongainwasrecordedasanadjustmenttoopeningretainedearnings.

DuringthethreemonthperiodendedJune30,2007,theTrustsoldtheinvestmentinmarketablesecurities.Asaresult,thechangeintheunrealizedgainoninvestmentof$1.5millionwasrecordedthroughtheincomestatementandarealizedgainwasrecordedfor$1.4million.

DuringthethreemonthperiodendedDecember31,2007,theTrustreceived1.5millionsharesofapubliclytradedexplorationandproductioncompanyfor$1.00pershareor$1.5millioninconnectionwithadispositionofproperties.ThefairvalueatDecember31,2007was$1.4million,resultinginanunrealizedlossoninvestmentof$150,000recordedthroughtheincomestatement.DuringthethreemonthsendedDecember31,2007,theTrustalsopurchased2.0millionsharesofPilotEnergyLtd.,apubliclytradedexplorationandproductioncompanyforanaveragepriceofapproximately$2.90pershareor$5.9million.TheTrustacquiredtheremainingsharesonJanuary16,2008,withtheclosingofPilotEnergyLtd.acquisition(refertoSubsequentEventNote17(b)below).ThefairvalueatDecember31,2007was$6.4millionresultinginanunrealizedgainoninvestmentof$470,000recordedthroughtheincomestatement.



Section1530establishesnewstandardsforreportingcomprehensiveincome,consistingofNetIncomeandOtherComprehensiveIncome(“OCI”).OCIisthechangeinequity(netassets)ofanentityduringareportingperiodfromtransactionsandothereventsfromnon-ownersourcesandexcludesthoseresultingfrominvestmentsbyownersanddistributionstoowners.TheTrusthasnosuchtransactionsandeventswhichwouldrequirethedisclosureofOCIfortheyearendedDecember31,2007.Anychangesintheseitemswouldbepresentedinaconsolidatedstatementofcomprehensiveincome.

FUTUREACCOUNTINGCHANGES

TheCICAissuednewaccountingstandards,CICAAccountingStandardHandbookSection3862,“FinancialInstruments–Disclosures”andSection3863“FinancialInstruments–Presentation”.Thesestandardsrequireentitiestoprovidedisclosuresintheirfinancialstatementsthatenableuserstoevaluatethesignificanceoffinancialinstrumentstotheentity’sfinancialpositionandperformance.Italsorequiresthatentitiesdisclosethenatureandextentofrisksarisingfromfinancialinstrumentsandhowtheentitymanagesthoserisks.Thestandardsestablishpresentationguidelinesforfinancialinstrumentsandnon-financialderivativesanddealswiththeclassificationoffinancialinstruments,fromtheperspectiveoftheissuer,betweenliabilitiesandequity,theclassificationofrelatedinterest,dividends,lossesandgains,andthecircumstancesinwhichfinancialassetsandfinancialliabilitiesareoffset.ThisstandardiseffectiveforfiscalyearsbeginningonorafterOctober1,2007.Increaseddisclosurewillberequiredonthenatureandextentofrisksarisingfromfinancialinstrumentsandhowtheentitymanagesthoserisks.

TheCICAissuedSection1535,“CapitalDisclosures”.TheapplicationoftheserecommendationswillprovidereadersoffinancialstatementswithinformationpertinenttotheTrust’sobjectives,policiesandprocessesformanagingcapital.IncreaseddisclosureofquantitativedataregardingwhatisconsideredcapitalandwhethertheTrustisincompliancewithallexternallyimposedcapitalrequirementsandconsequencesofnon-compliancewillbedisclosed.ThisstandardiseffectiveforfiscalyearsbeginningonorafterOctober1,2007.

TheCICAissuedSection3064,“GoodwillandOtherIntangibleAssets”,replacingSection3062,“GoodwillandOtherIntangibleAssets”andSection3450,“ResearchandDevelopmentCosts”.Thisnewstandardestablishesstandardsfortherecognition,measurement,presentationanddisclosureofgoodwillandintangibleassetssubsequenttoitsinitialrecognition.StandardsconcerninggoodwillareunchangedfromthestandardsincludedinthepreviousSection3062.ThisstandardiseffectiveonJanuary1,2009.TheTrusthasnotassessedtheimpactofthisstandardonitsfinancialstatements.

OuTSTANDING TRuST uNIT DATA

AsatMarch3,2008,theTrusthad121,669,469trustunitsoutstanding.



SELECTED ANNuAL INFORmATION

($000exceptperunitamounts) �007 �006 2005

Totalrevenue 652,175 427,491 251,076

Netincome(loss)(�) (32,167) 68,947 38,509

Netincome(loss)perunit(�) (0.32) 1.12 1.12

Netincome(loss)perunit-diluted(�) (0.32) 1.05 1.12

Cashflowfromoperatingactivities 332,605 177,426 94,247

Cashflowfromoperatingactivitiesperunit 3.30 2.88 2.75

Cashflowfromoperatingactivitiesperunit-diluted 3.28 2.79 2.61

Cashflowfromoperations 355,910 189,135 109,785

Cashflowfromoperationsperunit 3.54 3.07 3.20

Cashflowfromoperationsperunit-diluted 3.51 2.98 3.04

Workingcapital(�) (54,104) 26,533 31,165

Totalassets 2,613,432 1,373,466 808,297

Totalliabilities 1,196,429 467,086 375,632

Netdebt(�) 650,088 227,905 194,545

Totallong-termfinancialliabilities 59,652 11,697 4,590

Weightedaveragetrustunits(thousands)(3) 102,059 63,569 36,086

Cashdistributions 245,108 150,277 74,591

Cashdistributionsperunit 2.40 2.40 2.14

(1) Netincomeandnetincomebeforediscontinuedoperationsandextraordinaryitemsarethesame. (2) Workingcapitalandnetdebtincludelong-terminvestments,butexcludetheriskmanagementliabilitiesandassets. (3) Thetrustunitsissuableonconversionoftheexchangeablesharesreflecttheweightedaverageexchangeablesharesoutstandingconvertedattheexchangeratioineffectat theendoftheyear.Forthe2006amounts,theexchangeableshareratioappliedistheoneineffectfortheOctober27,2006redemption.

CrescentPoint’srevenue,cashflowfromoperationsandassetshaveincreasedsignificantlyfromtheyearendedDecember31,2005throughtheyearDecember31,2007duetonumerouscorporateandpropertyacquisitionsandtheTrust’ssuccessfuldrillingprogram,whichhaveresultedinhigherproductionvolumes.Thisfactorcombinedwithfavourablecommoditypricesresultingfromhighermarketpricesandnarrowercorporateoildifferentialshaveproducedtheincreasesrealizedinthetablenotedabove.Netincomethrough2005to2007hasfluctuatedprimarilyduetounrealizedfinancialinstrumentgainsandlossesonoilandgascontracts,whichfluctuatewithchangesinmarketconditionsalongwithfluctuationsinthefutureincometaxexpenseandrecovery.



SummARy OF quARTERLy RESuLTS

($000,exceptperunitamounts)

�007 �006

Q4 Q3 Q� Q� Q4 Q3 Q� Q�Revenues 214,748 164,368 144,179 128,880 100,960 119,365 113,790 93,376

Netincome(loss)(1)(5) (90,348) 18,410 (117,773) 157,544 6,918 39,588 19,260 3,181

Netincome(loss)perunit(1)(5) (0.80) 0.18 (1.17) 1.83 0.10 0.61 0.32 0.06

Netincome(loss)perunit-diluted(1)(5) (0.80) 0.18 (1.17) 1.80 0.10 0.58 0.31 0.02

Cashflowfromoperatingactivities 99,070 80,722 102,637 50,176 39,313 50,910 49,683 37,520

Cashflowfromoperatingactivitiesperunit 0.88 0.79 1.02 0.58 0.58 0.78 0.84 0.71

Cashflowfromoperatingactivitiesperunit-diluted 0.87 0.78 1.01 0.58 0.56 0.75 0.81 0.68

Cashflowfromoperations 112,572 92,215 78,248 72,875 43,843 52,774 52,282 40,236

Cashflowfromoperationsperunit 1.00 0.90 0.78 0.84 0.64 0.81 0.88 0.76

Cashflowfromoperationsperunit-diluted 0.99 0.89 0.77 0.84 0.63 0.78 0.85 0.73

Workingcapital(�) (54,104) (9,908) (23,346) 13,044 26,533 29,354 29,840 25,946

Totalassets 2,613,432 2,106,227 2,051,979 2,076,521 1,373,466 1,351,245 1,294,214 1,188,260

Totalliabilities 1,196,429 555,233 656,693 534,299 467,086 448,483 503,903 452,648

Netdebt(�) 650,088 208,554 353,416 340,612 227,905 212,073 241,371 206,991

Totallong-termfinancialliabilities 59,652 - 7,286 16,107 11,697 8,650 18,791 16,097

Weightedaveragetrustunits-diluted(thousands)(3) 114,623 104,074 101,681 87,537 69,764 67,810 61,372 54,958

Capitalexpenditures(4) 506,231 80,488 58,835 658,640 32,925 94,548 116,487 377,202

Cashdistributions 67,971 63,206 60,320 53,611 41,322 39,890 36,123 32,942

Cashdistributionsperunit 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60

(1) Netincomeperunit–dilutediscalculatedbydividingthenetincomebeforenon-controllinginterestbythedilutedweightedaveragetrustunits,excludingthecashportionof unit–basedcompensation. (2)Workingcapitalandnetdebtincludelong-terminvestments,butexcludetheriskmanagementliabilitiesandassets. (3)Thetrustunitsissuableonconversionoftheexchangeablesharesreflecttheweightedaverageexchangeablesharesoutstandingconvertedattheexchangeratioineffectattheendof theyear.Forthefourthquarter2006amounts,theexchangeableshareratioappliedistheoneineffectfortheOctober27,2006redemption. (4)Capitalexpendituresincludescapitalacquisitions.Capitalacquisitionsrepresenttotalconsiderationforthetransactionsincludingbankdebtandworkingcapitalassumed. Priorperiodresultshavebeenrestatedtoconformtocurrentperiodpresentation. (5)Netincomeforthefirstquarterof2007includesthe$158.8millionfutureincometaxrecoveryresultingfromtheMarch1,2007reorganization.Netincomeforthesecond quarterof2007includesthe$152.3millionfutureincometaxexpenseresultingfromtheJune12,2007BillC-52BudgetImplementationActthatwassubstantivelyenacted.

CrescentPoint’srevenuehasincreasedduetoseveralpropertyandcorporateacquisitionscompletedoverthepasttwoyearsandtheTrust’ssuccessfuldrillingprogram.TheoverallgrowthoftheTrust’sassetbasealsocontributedtothegeneralincreaseincashflowfromoperationsandcashflowfromoperatingactivities.Netincomethrough2006and2007hasfluctuatedprimarilyduetounrealizedfinancialinstrumentgainsandlossesonoilandgascontracts,whichfluctuatewiththechangesinmarketconditionsalongwithfluctuationsinthefutureincometaxexpense(recovery).TheMarch1,2007internalreorganizationresultedina$158.8millionfuturetaxrecoveryinthefirstquarterof2007.BillC-52becamesubstantivelyenactedonJune12,2007,resultinginthefuturetaxexpenseof$152.3millioninthesecondquarterof2007.Capitalexpendituresfluctuatedthroughthisperiodasaresultoftimingofacquisitions.ThegeneralincreaseincashflowsfromoperationsandoperatingactivitiesthroughoutthelasteightquartershasallowedtheTrusttomaintainstablemonthlycashdistributionsoverthepasttwoyears.



FOuRTH quARTER REvIEw

Thefollowingarethemainhighlightsforthefourthquarterof2007:

• TheTrustspent$95.4millionondevelopmentcapitalactivitiesinthefourthquarter,includingthedrillingof37(28.9net)wellswitha100percentsuccessrateaddingover1,800boe/dinitialinterestproduction.

• TheTrustexceededitsfourthquarteraveragedailyproductiontarget,producing33,351boe/dforthequarter.Thisrepresentsa56percentincreasefrom21,369boe/dproducedinthefourthquarterof2006.TheincreaseresultedfromtheMissionandInnovaacquisitionscompletedin2007andtheTrust’ssuccessfuldrillingprogram.

• CrescentPoint’scashflowfromoperationsincreasedby157percentto$112.6millioninthefourthquarterof2007,comparedto$43.8millioninthefourthquarterof2006.TheincreaseisprimarilyduetotheTrust’sincreasedproductionandincreasedcorporatenetbacksduetonarrowercorporateoildifferentialsasaresultoftheMissionandInnovaacquisitions.

• CrescentPointmaintainedconsistentmonthlydistributionsof$0.20perunit,totaling$0.60perunitforthefourthquarterof2007.

• TheTrustcontinuedtoexecuteitscorestrategyofmanagingcommoditypriceriskusingacombinationoffixedpriceswaps,costlesscollars,andputoptioninstruments.AsatMarch3,2008,theTrusthadhedged60percent,57percent,41percent,and 2percentofproduction,netofroyaltyinterest,for2008,2009,2010andthefirstsixmonthsof2011,respectively.

• OnOctober22,2007,theTrustpurchased97percentoftheissuedandoutstandingsharesofInnovaExplorationLtd.,apubliclytradedcompanywithpropertiesintheViewfieldareaofsoutheastSaskatchewan.OnOctober25,2007,theTrustacquiredtheremainingsharesoutstanding.Theshareswerepurchasedfortotalconsiderationof$402.9million,includingassumedbankdebtandworkingcapital($472.0millionwasallocatedtoproperty,plantandequipment).ThepurchasewaspaidforthroughtheTrust’sexistingbanklines.

• InOctober2007,theamountavailableundertheTrust’screditfacilitywasincreasedfrom$600to$800millionreflectingthegrowthintheTrust’slendingbaseandthecompletionoftheInnovaExplorationLtd.acquisition.

INTERNAL CONTROLS

DisclosurecontrolsandprocedureshavebeendesignedtoensurethatinformationrequiredtobedisclosedbyCrescentPointisaccumulatedandcommunicatedtoCrescentPoint’smanagementasappropriatetoallowtimelydecisionsregardingrequireddisclosure.CrescentPoint’sChiefExecutiveOfficerandChiefFinancialOfficerhaveconcluded,basedontheirevaluationasoftheendoftheperiodcoveredbytheannualfilings,thatCrescentPoint’sdisclosurecontrolsandproceduresfortheyearendedDecember31,2007areeffectiveandprovidereasonableassurancethatmaterialinformationrelatedtoCrescentPointismadeknowntothembyotherswithintheTrust.CrescentPoint’sChiefExecutiveOfficerandChiefFinancialOfficerhavedesignedorcausedtobedesignedundertheirsupervision,internalcontrolsoverfinancialreportingrelatedtotheTrusttoprovidereasonableassuranceregardingthereliabilityoftheTrust’sfinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithCanadianGAAP.

During2007,theTrustengagedexternalconsultantstoassistindocumentingandassessingtheTrust’sdesignofinternalcontrolsoverfinancialreporting.NomaterialchangesintheTrust’sinternalcontroloverfinancialreportingwereidentifiedduringtheyearendedDecember31,2007thathasmateriallyaffected,orarereasonablylikelytomateriallyaffect,theTrust’sinternalcontroloverfinancialreporting.

ItshouldbenotedthatwhileManagementbelievesthatCrescentPoint’sdisclosurecontrolsandproceduresprovideareasonablelevelofassurancewithregardtotheireffectiveness,theydonotexpectthatthedisclosurecontrolsandproceduresorinternalcontrolsoverfinancialreportingwillpreventallerrorsandfraud.Acontrolsystem,nomatterhowwellconceivedoroperated,canprovideonlyreasonable,butnotabsolute,assurancethattheobjectivesofthecontrolsystemaremet.



BuSINESS RISkS AND PROSPECTS

CrescentPointisexposedtoseveraloperationalrisksinherentinexploiting,developing,producingandmarketingcrudeoilandnaturalgas.Theserisksincludebutarenotlimitedto:

• Economicriskoffindingandproducingreservesatareasonablecost;

• Relianceonreserveestimatesfortheyearaswellasonacquisitions;

• Financialriskofmarketingreservesatanacceptablepricegivenmarketconditions;

• Fluctuationsinforeigncurrencyandexchangerates;

• Operationalmattersrelatedtononoperatedproperties;

• Delaysinbusinessoperations,pipelinerestrictions,blowouts;

• Debtservice,indebtednessmaylimittimingoramountofdistributionsaswellasmarketpriceoftrustunits;

• Oilandgasmarketishighlycompetitive;

• Sufficientliquidityforfutureoperations;

• CostofcapitalrisktocarryouttheTrust’soperations;

• Unforeseentitledefects;

• Aboriginallandclaims;

• Lossofkeypersonnel;

• UncertaintyofGovernmentPolicychanges;

• Theriskofcarryingoutoperationswithminimalenvironmentalimpact;and

• Operationalhazardsandavailabilityofinsurance.

CrescentPointstrivestomanageorminimizetheserisksinanumberofways,including:

• Employingqualifiedprofessionalandtechnicalstaff;

• Concentratinginalimitednumberofareaswithlowcostexploitationanddevelopmentobjectives;

• Utilizingthelatesttechnologyforfindinganddevelopingreserves;

• Constructingquality,environmentallysensitive,safeproductionfacilities;

• Maximizingoperationalcontrolofdrillingandproducingoperations;

• Mitigatingpriceriskthroughstrategichedging;and

• Adheringtoconservativeborrowingguidelines.



HEALTH, SAFETy AND ENvIRONmENT POLICy

Thehealthandsafetyofemployees,contractors,visitorsandthepublic,aswellastheprotectionoftheenvironment,isofutmostimportancetoCrescentPoint.TheTrustendeavourstoconductitsoperationsinamannerthatwillminimizebothadverseeffectsandconsequencesofemergencysituationsby:

• Complyingwithgovernmentregulationsandstandards;

• Conductingoperationsconsistentwithindustrycodes,practicesandguidelines;

• Ensuringprompt,effectiveresponseandrepairtoemergencysituationsandenvironmentalincidents;

• ProvidingtrainingtoemployeesandcontractorstoensurecompliancewithTrustsafetyandenvironmentalrulesandprocedures;

• Promotingtheaspectsofcarefulplanning,goodjudgment,implementationoftheTrust’sprocedures,andmonitoringTrustactivities;

• Communicatingopenlywithmembersofthepublicregardingouractivities;and

• AmendingtheTrust’spoliciesandproceduresasmayberequiredfromtimetotime.

CrescentPointbelievesthatallemployeeshaveavitalroleinachievingexcellenceinenvironmental,healthandsafetyperformance.Thisisbestachievedthroughcarefulplanningandthesupportandactiveparticipationofeveryoneinvolved.

OuTLOOk

CrescentPoint’s2008guidanceisasfollows:

�00�

Production

OilandNGL(bbls/d) 30,125

Naturalgas(mcf/d) 26,250

Total(boe/d) 34,500

Cashflowfromoperations($000) 527,000

Cashflowfromoperationsperunit–diluted($) 4.21

Cashdistributionsperunit($) 2.40

Payoutratio–perunit–diluted(%) 57

Capitalexpenditures($000) (�) 225,000

Wellsdrilled,net �06

Pricing

Crudeoil–WTI(US$/bbl) 92.50

Crudeoil–WTI(Cdn$/bbl) 92.50

Naturalgas–Corporate(Cdn$/mcf) 8.00

Exchangerate(US$/Cdn$) 1.00

(1)Theprojectionofcapitalexpendituresexcludesacquisitions,whichareseparatelyconsideredandevaluated.

AdditionalinformationrelatingtoCrescentPoint,includingtheTrust’srenewalannualinformationform,isavailableon SEDARatwww.sedar.com.


MANAGEMENT’SRESPONSIBLITYFORFINANCIALREPORTINGThemanagementofCrescentPointEnergyTrustisresponsibleforthepreparationofallinformationincludedinthisAnnualReport. The consolidated financial statements have been prepared in accordance with Canadian generally acceptedaccountingprinciplesandincludecertainestimatesthatreflectmanagement’sbestestimatesandjudgments.Managementhasdeterminedsuchamountsonareasonablebasisinordertoensurethatthefinancialstatementsarepresentedfairlyinallmaterialrespects.Thefinancial informationcontainedelsewhereinthisAnnualReporthasbeenreviewedtoensureconsistencywiththatintheconsolidatedfinancialstatements.

Management has developed andmaintains an extensive system of internal accounting controls that provide reasonableassurancethatalltransactionsareaccuratelyrecorded,thatthefinancialstatementsrealisticallyreporttheTrust’soperatingandfinancialresults,andthattheTrust’sassetsaresafeguarded.ManagementbelievesthatthissystemofinternalcontrolshasoperatedeffectivelyfortheyearendedDecember31,2007.

PricewaterhouseCoopersLLP,anindependentfirmofcharteredaccountants,wasappointedbyaresolutionoftheBoardofDirectorstoauditthefinancialstatementsoftheTrustandprovideanindependentprofessionalopinion.PricewaterhouseCoopersLLPwasappointedtoholdsuchofficeuntilthenextannualmeetingoftheunitholdersoftheTrust.

The Board of Directors, through its Audit Committee, has reviewed the financial statements including notes theretowithmanagementandPricewaterhouseCoopersLLP.ThemembersoftheAuditCommitteearecomposedofindependentdirectorswhoarenotemployeesoftheTrust.TheBoardofDirectorshasapprovedtheinformationcontainedinthefinancialstatementsbasedontherecommendationoftheAuditCommittee.

ScottSaxberg GregTisdale PresidentandChiefExecutiveOfficer ChiefFinancialOfficer March10,2008


AUDITORS’REPORT

TotheUnitholdersofCrescentPointEnergyTrust

WehaveauditedtheconsolidatedbalancesheetsofCrescentPointEnergyTrustasatDecember31,2007and2006andtheconsolidatedstatementsofoperations,comprehensiveincomeanddeficitandcashflowsfortheyearsthenended.TheseconsolidatedfinancialstatementsaretheresponsibilityoftheTrust’smanagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudits.

WeconductedourauditsinaccordancewithCanadiangenerallyacceptedauditingstandards.Thosestandardsrequirethatweplanandperformanaudittoobtainreasonableassurancewhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.

Inouropinion,theseconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheTrustasatDecember31,2007and2006andtheresultsofitsoperationsanditscashflowsfortheyearsthenendedinaccordancewithCanadiangenerallyacceptedaccountingprinciples.

CharteredAccountants Calgary,Alberta March10,2008


CONSOLIDATEDBALANCESHEETS

AsatDecember31

2007 �006($000)

ASSETS

Current assets

Cash - 205

Accountsreceivable 102,800 53,279

Investmentsinmarketablesecurities(Note15) 1,385 �7�

Prepaidsanddeposits 2,218 4,509

Riskmanagementasset(Note15) 451 586

106,854 58,750

Long-terminvestment(Note15&17(b)) 6,386 30,020

Reclamationfund(Note7) 2,436 1,725

Riskmanagementasset(Note15) - 466

Property,plantandequipment(Note5&6) 2,429,406 1,214,155

Goodwill 68,350 68,350

Totalassets 2,613,432 1,373,466

LIABILITIES

Currentliabilities

Accountspayableandaccruedliabilities 144,141 53,053

Cashdistributionspayable 22,752 8,598

Bankindebtedness(Note8) 595,984 254,438

Riskmanagementliability(Note15) 63,819 7,581

826,696 323,670

Assetretirementobligation(Note9) 66,074 45,829

Riskmanagementliability(Note15) 59,652 11,697

Futureincometaxes(Note13) 244,007 85,890

Totalliabilities 1,196,429 467,086

UNITHOLDERS’EQUITY

Unitholders’capital(Note10) 1,826,423 1,045,929

Contributedsurplus(Note11) 15,086 9,150

Deficit(Note12) (424,506) (148,699)

Totalunitholders’equity 1,417,003 906,380

Totalliabilitiesandunitholders’equity 2,613,432 1,373,466Commitments(Note16)

Seeaccompanyingnotestotheconsolidatedfinancialstatements.

ApprovedonbehalfoftheBoardofDirectors:

GeraldA.Romanzin D.HughGillard Director Director


CONSOLIDATEDSTATEMENTSOFOPERATIONS,COMPREHENSIVEINCOME(LOSS)ANDDEFICITFortheyearsendedDecember31 ($000,exceptperunitamounts) 2007 �006

REVENUE

Oilandgassales 652,175 427,491

Royalties (118,915) (90,013)

Financialinstruments

Realizedlosses (9,899) (30,323)

Unrealizedgains(losses)(Note15) (105,426) 13,859

417,935 321,014

EXPENSES

Operating 94,918 69,424

Transportation 17,725 10,175

Generalandadministrative 15,358 12,272

Unit-basedcompensation(Note11) 16,375 12,416

Interestonbankindebtedness(Note8) 21,805 13,673

Depletion,depreciationandamortization 242,923 138,511

Accretiononassetretirementobligation(Note9) 4,431 3,220

413,535 259,691

Incomebeforetaxes 4,400 61,323

Capitalandothertaxes 15,394 11,314

Futureincometaxexpense(recovery)(Note13) 21,173 (16,560)

Netincome(loss)beforenon-controllinginterest (32,167) 66,569

Non-controllinginterest - 2,378

Net income (loss) and comprehensive income (loss) for the year (32,167) 68,947

Deficit,beginningofyear (148,699) (67,369)

Changeinaccountingpolicy(Note3) 1,468 -

Cashdistributionspaidordeclared (245,108) (150,277)

Deficit, end of the year (Note 12) (424,506) (148,699)

Net income (loss) per unit (Note 14)

Basic (0.32) 1.12

Diluted (0.32) 1.05



FortheyearsendedDecember31 ($000,exceptperunitamounts) 2007 �006

CASHPROVIDEDBY(USEDIN) OPERATINGACTIVITIES

Netincome(loss)fortheyear (32,167) 68,947

Itemsnotaffectingcash

Non-controllinginterest - (2,378)

Futureincometaxes(Note13) 21,173 (16,560)

Unit-basedcompensation(Note11) 14,378 11,254

Depletion,depreciationandamortization 242,923 138,511

Accretiononassetretirementobligation(Note9) 4,431 3,220

Realizedgainonsaleofinvestment(Note3) (1,402) -

Unrealizedlosses(gains)onfinancialinstruments(Note15) 105,426 (13,859)

Unrealizedlossesoninvestment(Note3) 1,148 -

Assetretirementexpenditures(Note9) (1,855) (1,018)

Changeinnon-cashworkingcapital

Accountsreceivable 19,753 (6,932)

Prepaidexpensesanddeposits 2,291 2,589

Accountspayable (43,494) (6,348)

332,605 177,426

INVESTINGACTIVITIES

Developmentcapitalandotherexpenditures (235,788) (113,234)

Capitalacquisitions,net(Note5) (401,034) (362,186)

Proceedsonsaleofinvestment(Note3) 1,573 -

Reclamationfundnetcontributions (711) (1,484)

Long-terminvestment(Note15&17(b)) (5,912) -


Accountsreceivable (11,667) (3,553)

Accountspayable 48,417 15,175

(605,122) (465,282)

FINANCINGACTIVITIES

Issueoftrustunits,netofissuecosts 253,926 425,202

Restrictedunitvests (833) (1,377)

Increaseinbankindebtedness 250,173 11,366

Cashdistributions (245,108) (150,277)


Cashdistributionspayable 14,154 2,830

272,312 287,744

DECREASE IN CASH (205) (��)

CASH AT BEGINNING OF YEAR 205 3�7

CASH AT END OF YEAR - 205


CONSOLIDATEDSTATEMENTSOFCASHFLOW


NOTESTOCONSOLIDATED FINANCIALSTATEMENTS

DECEMBER31,2007AND2006

1. STRuCTuRE OF THE TRuST

CrescentPointEnergyTrust(“theTrust”)isanopen-endedunincorporatedinvestmenttrustcreatedonSeptember5,2003pursuanttoaDeclarationofTrustandPlanofArrangementoperatingunderthelawsoftheProvinceofAlberta.OlympiaTrustCompanyisthetrustee,CPRIistheadministratoroftheTrustandthebeneficiariesoftheTrustaretheunitholders.

OnMarch1,2007,theTrustcompletedareorganizationoftheTrustanditssubsidiaries.ThereorganizationresultedintheexistingbusinessoftheTrust,whichwascarriedonthroughalimitedpartnershipandcorporations,beingcarriedonthroughalimitedpartnership,directlyandindirectlyownedbytheTrust.

TheprincipalundertakingoftheTrust’soperatingentities,CrescentPointResourcesLimitedPartnershipalongwithitsgeneralpartner,CrescentPointGeneralPartnerCorp.istoacquire,holddirectlyorindirectly,interestsinoilandgasproperties.TheadministratoroftheTrust’sbusinessisCrescentPointResourcesInc.

2. SIGNIFICANT ACCOuNTING POLICIES

A)PRINCIPLESOFCONSOLIDATION

TheconsolidatedfinancialstatementsincludetheaccountsoftheTrustanditssubsidiaries.Anyreferenceto“theTrust”throughouttheseconsolidatedfinancialstatementsreferstotheTrustanditssubsidiaries.AlltransactionsbetweentheTrustanditssubsidiarieshavebeeneliminated.

B)JOINTVENTURES

CertainoftheTrust’sdevelopmentandproductionactivitiesareconductedjointlywithothersthroughunincorporatedjointventures.TheaccountsoftheTrustreflectitsproportionateinterestinsuchactivities.

C)PROPERTY,PLANTANDEQUIPMENT

TheTrustfollowsthefullcostmethodofaccountingforpetroleumandnaturalgaspropertiesandequipment,wherebyallcostsofacquiringpetroleumandnaturalgaspropertiesandrelateddevelopmentcostsarecapitalizedandaccumulatedinonecostcentre.Suchcostsincludeleaseacquisitioncosts,geologicalandgeophysicalexpenditures,costsofdrillingbothproductiveandnon-productivewells,relatedplantandproductionequipmentcostsandrelatedoverheadcharges.Maintenanceandrepairsarechargedagainstincome,whereasrenewalsandenhancementswhichextendtheeconomiclifeofthepropertiesandequipmentarecapitalized.

Gainsandlossesarenotrecognizedupondispositionofpetroleumandnaturalgaspropertiesunlesssuchadispositionwouldaltertherateofdepletionby20percentormore.

NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS


DEPLETION,DEPRECIATIONANDAMORTIZATION

Depletionofpetroleumandnaturalgaspropertiesiscalculatedusingtheunit-of-productionmethodbasedontheestimatedprovedreservesbeforeroyalties,asdeterminedbyindependentengineers.Naturalgasreservesandproductionareconvertedtoequivalentbarrelsofoilbasedupontherelevantenergycontent(6:1).Thedepletionbaseincludescapitalizedcosts,plusfuturecoststobeincurredindevelopingprovenreservesandexcludestheunimpairedcostofunprovedland.Costsassociatedwithunprovedpropertiesarenotsubjecttodepletionandareassessedperiodicallytoascertainwhetherimpairmenthasoccurred.Whenprovedreservesareassignedorthevalueoftheunprovedpropertyisconsideredtobeimpaired,thecostoftheunprovedpropertyortheamountofimpairmentisaddedtocostssubjecttodepletion.

Tangibleproductionequipmentisdepreciatedonastraight-linebasisoveritsestimatedusefullifeof15years.Officefurniture,equipmentandmotorvehiclesaredepreciatedonadecliningbalancebasisatratesrangingfrom10percentto30percent.

CEILINGTEST

Alimitisplacedontheaggregatecarryingvalueofproperty,plantandequipment,whichmaybeamortizedagainstrevenuesoffutureperiods(the“ceilingtest”).Theceilingtestisanimpairmenttestwherebythecarryingamountofproperty,plantandequipmentiscomparedtotheundiscountedcashflowsfromprovedreservesusingmanagement’sbestestimateoffutureprices.Ifthecarryingvalueexceedstheundiscountedcashflows,animpairmentlosswouldberecordedagainstincome.Theimpairmentismeasuredastheamountbywhichthecarryingamountofproperty,plantandequipmentexceedsthediscountedcashflowsfromprovedandprobablereserves.

D)RECLAMATIONFUND

TheTrustestablishedareclamationfundeffectiveJuly1,2004tofundfutureassetretirementobligationcostsandenvironmentalemissionsreductioncosts.TheBoardofDirectorshasapprovedcontributionsof$0.25perbarrelofproductionbeginningJanuary1,2007.PriortoJanuary1,2007,contributionsrangedfrom$0.15to$0.20perbarrelofproduction.Additionalcontributionsaremadeatthediscretionofmanagement.

E)ASSETRETIREMENTOBLIGATION

TheTrustrecognizesthefairvalueofanassetretirementobligationintheperiodinwhichitisincurred.Theobligationisrecordedasaliabilityonadiscountedbasiswhenincurred,withacorrespondingincreasetothecarryingamountoftherelatedasset.Overtimetheliabilitiesareaccretedforthechangeintheirpresentvalueandthecapitalizedcostsaredepletedonaunit-of-productionbasisoverthelifeofthereserves.Revisionstotheestimatedtimingofcashflowsortheoriginalestimatedundiscountedcostwouldalsoresultinanincreaseordecreasetotheobligationandrelatedasset.

F) GOODWILL

TheTrustmustrecordgoodwillrelatingtoacorporateacquisitionwhenthetotalpurchasepriceexceedsthefairvalueforaccountingpurposesofthenetidentifiableassetsandliabilitiesoftheacquiredcompany.Thegoodwillbalanceisassessedforimpairmentannuallyatyear-endoraseventsoccurthatcouldresultinanimpairment.Impairmentisrecognizedbasedonthefairvalueofthereportingentity(“consolidatedTrust”)comparedtothebookvalueofthereportingentity.IfthefairvalueoftheconsolidatedTrustislessthanthebookvalue,impairmentismeasuredbyallocatingthefairvalueoftheconsolidatedTrusttotheidentifiableassetsandliabilitiesasiftheTrusthasbeenacquiredinabusinesscombinationforapurchasepriceequaltoitsfairvalue.TheexcessofthefairvalueoftheconsolidatedTrustovertheamountsassignedtotheidentifiableassetsandliabilitiesistheimpliedvalueofthegoodwill.Anyexcessofthebookvalueofgoodwillovertheimpliedvalueofgoodwillistheimpairmentamount.Impairmentischargedtoearningsandisnottaxaffected,intheperiodinwhichitoccurs.Goodwillisstatedatcostlessimpairmentandisnotamortized.



G)UNIT-BASEDCOMPENSATION

ThefairvaluebasedmethodofaccountingisusedtoaccountfortherestrictedunitsgrantedundertheRestrictedUnitBonusPlan.Compensationexpenseisdeterminedbasedontheestimatedfairvalueoftrustunitsonthedateofgrant.Thecompensationexpenseisrecognizedoverthevestingperiod,withacorrespondingincreasetocontributedsurplus.Atthetimetherestrictedunitsvest,theissuanceofunitsisrecordedwithacorrespondingdecreasetocontributedsurplusandincreasetounitholders’equity.

H)INCOMETAXES

TheTrustfollowstheliabilitymethodofaccountingforincometaxes.Underthismethod,incometaxliabilitiesandassetsarerecognizedfortheestimatedtaxconsequencesattributabletodifferencesbetweentheamountsreportedinthefinancialstatementsoftheTrustanditscorporatesubsidiariesandtheirrespectivetaxbase,usingsubstantivelyenactedfutureincometaxrates.Theeffectofachangeinincometaxratesonfuturetaxliabilitiesandassetsisrecognizedinincomeintheperiodinwhichthechangeoccurs.Temporarydifferencesarisingonacquisitionsresultinfutureincometaxassetsandliabilities.Currently,theTrustisataxableentityundertheIncomeTaxAct(Canada)andistaxableonlyonincomethatisnotdistributedordistributabletotheunitholders.Effectivein2011,theTrust’sdistributionsaretaxable.Accordingly,incometaxliabilitiesandassetshavebeenrecognizedontheTrust’stemporarydifferencesatthesubstantivelyenactedrateapplicabletotheperiodsinwhichthetemporarydifferencesreverse.

I) FINANCIALINSTRUMENTS

TheTrustusesfinancialinstrumentsandphysicaldeliverycommoditycontractsfromtimetotimetoreduceitsexposuretofluctuationsincommodityprices,foreignexchangeratesandinterestrates.TheTrustalsomakesinvestmentsincorporationsfromtimetotimeinconnectionwiththeTrust’sacquisitionanddivestureactivities.

Allfinancialassetsmustbeclassifiedasheld-for-trading,available-for-sale,held-to-maturity,orloansandreceivablesandallfinancialliabilitiesmustbeclassifiedasheld-for-tradingorother.Financialassetsandfinancialliabilitiesclassifiedasheld-for-tradingaremeasuredatfairvaluewithchangesinthosefairvaluesrecognizedinearnings.Financialassetsheld-to-maturity,loansandreceivables,andotherfinancialliabilitiesaremeasuredatamortizedcostusingtheeffectiveinterestmethodofamortization.

TheTrusthasnotdesignatedanyofitsriskmanagementactivitiesasaccountinghedgesandaccordinglymarks-to-marketitsfinancialinstrumentswiththeresultinggainsandlossesrecordedinthestatementofoperations.

TheTrusthaselectedtoclassifyitsinvestmentsinmarketablesecuritiesandlongterminvestmentsasheldfortrading,andaccordingly,marks-to-markettheinvestmentswiththeresultinggainorlossbeingrecordedinthestatementofoperations.

J) NON-CONTROLLINGINTEREST

Duringthe2006year,theTrusthadanon-controllinginterestrecordedinrespectoftheissuedandoutstandingexchangeablesharesofCrescentPointResourcesLtd.(“CPRL”),apredecessorcorporatesubsidiaryoftheTrust,inaccordancewithEIC-151.Theintentisthatexchangeablesharesofasubsidiarywhicharetransferabletothirdparties,outsideoftheconsolidatedentity,representanon-controllinginterestinthesubsidiary.

Theexchangeablesharesissuedpursuanttotheconversiontoatrustwereinitiallyrecordedattheirpro-ratapercentageofcarryingvalueofCPRLequity,whiletheexchangeablesharesissuedpursuanttotheacquisitionofTappitResourcesLtd.wererecordedattheirfairvalue.Whentheexchangeablesharesrecordedatcarryingvalueareconvertedintotrustunits,theconversionisrecordedasanacquisitionofthenon-controllinginterestatfairvalueandisaccountedforasastepacquisition.Uponconversionoftheexchangeableshares,thefairvalueofthetrustunitsissuedisrecordedintheunitholders’capital,andthedifferencebetweenthecarryingvalueofthenon-controllinginterestandthefairvalueofthetrustunitsisrecordedasproperty,plantandequipment.



Thenon-controllinginterestontheconsolidatedbalancesheetrepresentsthebookvalueofexchangeablesharesplusaccumulatedearningsattributabletotheoutstandingshares.Thenon-controllinginterestontheincomestatementrepresentsthenetearningsattributabletotheexchangeableshareholdersfortheyearbasedonthetrustunitsissuableforexchangeablesharesinproportiontothetotaltrustunitsissuedandissuableateachyearend.

K)REVENUERECOGNITION

Revenuesassociatedwithsalesofcrudeoil,naturalgasandnaturalgasliquidsarerecognizedwhentitlepassestothepurchaser.

L) CASHANDCASHEQUIVALENTS

Cashandcashequivalentsincludeshort-terminvestmentswithamaturityofthreemonthsorlesswhenpurchased.

M)MEASUREMENTUNCERTAINTY

Certainitemsrecognizedinthefinancialstatementsaresubjecttomeasurementuncertainty.TherecognizedamountsofsuchitemsarebasedontheTrust’sbestinformationandjudgment.Suchamountsarenotexpectedtochangemateriallyinthenearterm.Theyincludetheamountsrecordedforfutureincometaxes,depletion,depreciation,amortizationandassetretirementcostswhichdependonestimatesofoilandgasreservesortheeconomiclivesandfuturecashflowsfromrelatedassets.

3. CHANGES IN ACCOuNTING POLICIES

OnJanuary1,2007,theTrustadoptedtheCICAHandbooksections3855“FinancialInstrumentsRecognitionandMeasurement”,3865“Hedges”,3861“FinancialInstruments–DisclosureandPresentation”,1530“ComprehensiveIncome,”and3251“Equity”.OtherthantheeffectontheInvestmentinMarketableSecuritiesasdescribedinthesectionbelow,theadoptionofthefinancialinstrumentsstandardshasnotaffectedthecurrentorcomparativeperiodbalancesontheconsolidatedfinancialstatementsasallfinancialinstrumentsidentifiedhavebeenfairvalued.

FinancialInstruments

Section3855requiresthatallfinancialassetsbeclassifiedasheld-for-trading,available-for-sale,held-to-maturity,orloansandreceivablesandthatallfinancialliabilitiesmustbeclassifiedasheld-for-tradingorother.Financialassetsandfinancialliabilitiesclassifiedasheld-for-tradingaremeasuredatfairvaluewithchangesinthosefairvaluesrecognizedinearnings.Financialassetsheld-to-maturity,loansandreceivables,andotherfinancialliabilitiesaremeasuredatamortizedcostusingtheeffectiveinterestmethodofamortization.Available-for-salefinancialassetsaremeasuredatfairvaluewithunrealizedgainsandlosses,includingchangesinforeignexchangerates,beingrecognizedinothercomprehensiveincome.Investmentsinequityinstrumentsclassifiedasavailable-for-salethatdonothaveaquotedmarketpriceinanactivemarketaremeasuredatcost.TheTrusthaselectedtoclassifytheinvestmentinmarketablesecuritiesasheldfortrading.Accordingly,theinvestmentinmarketablesecuritiesbalanceof$171,000atJanuary1,2007consistingofaninvestmentinapubliclytradedexplorationandproductioncompany,wasfairvaluedatJanuary1,2007to$1.6million.Underprospectiveapplication,the$1.5milliongainwasrecordedasanadjustmenttoopeningretainedearnings.

DuringthethreemonthperiodendedJune30,2007,theTrustsoldtheinvestmentinmarketablesecurities.Asaresult,thechangeintheunrealizedgainoninvestmentof$1.5millionwasrecordedthroughtheincomestatementandarealizedgainwasrecordedfor$1.4million.

DuringthethreemonthperiodendedSeptember30,2007,theTrustpurchased2.2millionsharesofInnovaExplorationLtd.,apubliclytradedexplorationandproductioncompany,foranaveragepriceofapproximately$7.51pershareor$16.6million.



TheTrustacquiredtheremainingsharesinOctober2007inconnectionwiththeclosingoftheInnovaExplorationLtd.acquisition(refertoFinancialStatementNote5(c)below).ThefairvalueatSeptember30,2007was$16.6million,unchangedfromthecarryingvalue.Accordingly,therewasnoadjustmentrequiredtomarktheinvestmenttomarket.

DuringthethreemonthperiodendedDecember31,2007,theTrustreceived1.5millionsharesofapubliclytradedexplorationandproductioncompanyfor$1.00pershareor$1.5millioninconnectionwithadispositionofproperties.ThefairvalueatDecember31,2007was$1.4million,resultinginanunrealizedlossoninvestmentof$150,000recordedthroughtheincomestatement.DuringthethreemonthsendedDecember31,2007,theTrustalsopurchased2.0millionsharesofPilotEnergyLtd.,apubliclytradedexplorationandproductioncompanyforanaveragepriceofapproximately$2.90pershareor$5.9million.TheTrustacquiredtheremainingsharesonJanuary16,2008,withtheclosingofPilotEnergyLtd.acquisition(refertoSubsequentEventNote17(b)below).ThefairvalueatDecember31,2007was$6.4millionresultinginanunrealizedgainoninvestmentof$470,000recordedthroughtheincomestatement.

Derivativeinstrumentsarealwayscarriedatfairvalueandreportedasassetswheretheyhaveapositivefairvalueandasliabilitieswheretheyhaveanegativefairvalue.Derivativesmaybeembeddedinotherfinancialinstruments.Underthenewfinancialinstrumentsstandardsthederivativesembeddedinotherfinancialinstrumentsarevaluedasseparatederivativeswhentheireconomiccharacteristicandrisksarenotclearlyandcloselyrelatedtothoseofthehostcontract;thetermsoftheembeddedderivativearethesameasthoseofafreestandingderivative;andthecombinedcontractisnotheld-for-trading.Whenanentityisunabletomeasurethefairvalueoftheembeddedderivativeseparately,thecombinedcontractistreatedasafinancialassetorliabilitythatisheld-for-tradingandmeasuredatfairvaluewithchangesthereinrecognizedinearnings.TheTrustwaspreviouslymarkingtomarketitsderivativeinstrumentsand,accordinglytherewasnoadjustmentrequiredonadoptionofthisaccountingstandard.

Thefairvalueofafinancialinstrumentoninitialrecognitionisnormallythetransactionprice,i.e.thefairvalueoftheconsiderationgivenorreceived.Subsequenttoinitialrecognition,thefairvaluesarebasedonquotedmarketpricewhereavailablefromactivemarkets,otherwisefairvaluesareestimatedbaseduponmarketpricesatreportingdateforothersimilarassetsorliabilitieswithsimilartermsandconditions,orbydiscountingfuturepaymentsofinterestandprincipalatestimatedinterestratesthatwouldbeavailabletotheTrustatthereportingdate.

Hedges

Section3865replacestheguidanceformerlyinSection1650,“ForeignCurrencyTranslation”andAccountingGuideline13,“HedgingRelationships”byspecifyinghowhedgeaccountingisappliedandwhatdisclosuresarenecessarywhenitisapplied. TheTrustdoesnothaveanyderivativeinstrumentsthathavebeendesignatedashedges.Accordingly,theTrustismarkingtomarketitsfinancialinstruments.

ComprehensiveIncome

Section1530establishesnewstandardsforreportingthedisplayofcomprehensiveincome,consistingofNetIncomeandOtherComprehensiveIncome(“OCI”).OCIisthechangeinequity(netassets)ofanentityduringareportingperiodfromtransactionsandothereventsfromnon-ownersourcesandexcludesthoseresultingfrominvestmentsbyownersanddistributionstoowners.TheTrusthasnosuchtransactionsandeventswhichwouldrequirethedisclosureofOCIfortheyearendedDecember31,2007.Anychangesintheseitemswouldbepresentedinaconsolidatedstatementofoperationsandcomprehensiveincome.



Equity

Section3251replacessection3250,“Surplus”andestablishesstandardsforthepresentationofequityandchangesinequityduringreportingperiod,includingchangesinAccumulatedOtherComprehensiveIncome(“AccumulatedOCI”).AnycumulativechangesinOCIwouldbeincludedinAccumulatedOCIandbepresentedasanewcategoryofShareholder’sEquityontheconsolidatedbalancesheet.AstheTrusthasnoOCItransactions,theTrustdoesnothaveanyAccumulatedOCI.

4. FuTuRE ACCOuNTING CHANGES

TheCICAissuednewaccountingstandards,CICAAccountingStandardHandbookSection3862,“FinancialInstruments-Disclosures”andSection3863“FinancialInstruments–Presentation”.Thesestandardsrequireentitiestoprovidedisclosuresintheirfinancialstatementsthatenableuserstoevaluatethesignificanceoffinancialinstrumentstotheentity’sfinancialpositionandperformance.Italsorequiresthatentitiesdisclosethenatureandextentofrisksarisingfromfinancialinstrumentsandhowtheentitymanagesthoserisks.Thestandardsestablishpresentationguidelinesforfinancialinstrumentsandnon-financialderivativesanddealswiththeclassificationoffinancialinstruments,fromtheperspectiveoftheissuer,betweenliabilitiesandequity,theclassificationofrelatedinterest,dividends,lossesandgains,andthecircumstancesinwhichfinancialassetsandfinancialliabilitiesareoffset.ThisstandardiseffectiveforfiscalyearsbeginningonorafterOctober1,2007.Increaseddisclosurewillberequiredonthenatureandextentofrisksarisingfromfinancialinstrumentsandhowtheentitymanagesthoserisks.

TheCICAissuedSection1535,“CapitalDisclosures”.TheapplicationoftheserecommendationswillprovidereadersoffinancialstatementswithinformationpertinenttotheTrust’sobjectives,policiesandprocessesformanagingcapital.IncreaseddisclosureofquantitativedataregardingwhatisconsideredcapitalandwhethertheTrustisincompliancewithallexternallyimposedcapitalrequirementsandconsequencesofnon-compliancewillbedisclosed.ThisstandardiseffectiveforfiscalyearsbeginningonorafterOctober1,2007.

TheCICAissuedSection3064,“GoodwillandOtherIntangibleAssets”,replacingSection3062,“GoodwillandOtherIntangibleAssets”andSection3450,“ResearchandDevelopmentCosts”.Thisnewstandardestablishesstandardsfortherecognition,measurement,presentationanddisclosureofgoodwillandintangibleassetssubsequenttoitsinitialrecognition.StandardsconcerninggoodwillareunchangedfromthestandardsincludedinthepreviousSection3062.Thisstandardiseffectiveon January1,2009.TheTrusthasnotassessedtheimpactofthisstandardonitsfinancialstatements.



5. CAPITAL ACquISITIONS AND DISPOSITIONS

A)ACQUISITIONOFMISSIONOIL&GASINC.

OnFebruary9,2007,theTrustpurchasedalltheissuedandoutstandingsharesofMissionOil&GasInc.,apubliclytradedcompanywithpropertiesintheViewfieldareaofsoutheastSaskatchewanfortotalconsiderationof$627.8million,includingassumedbankdebtandworkingcapital($708.2millionwasallocatedtoproperty,plantandequipment).ThepurchasewaspaidforthroughtheTrust’sexistingbanklinesandissuanceofapproximately29.2milliontrustunitsandwasaccountedforasabusinesscombinationusingthepurchasemethodofaccounting.TheTrustowned3.8millionsharesofMissionOil&GasInc.priortotheclosingwhichitpurchasedfor$7.90pershareor$30.0millioninNovember2005.

($000)

NET ASSETS ACqUIRED

Riskmanagementasset 2,063

Property,plantandequipment 708,161

Workingcapitaldeficiency (5,922)

Bankdebt (47,751)

Assetretirementobligation (8,285)

Futureincometaxes (74,167)

Totalnetassetsacquired 574,099

CONSIDERATION

Cash 62,767

Trustunitsissued(29,178,562trustunits) 506,832

Acquisitioncosts 4,500

Totalpurchaseprice 574,099

B)ACQUISITIONOFAPRIVATECORPORATION

OnSeptember5,2007,theTrustpurchasedalltheissuedandoutstandingsharesofaprivatecorporationwithpropertiesintheWillmarandBrowningareasofsoutheastSaskatchewanfortotalconsiderationof$18.9millionincludingassumedbankdebtandworkingcapital($19.6millionwasallocatedtoproperty,plantandequipment).Thepurchasewaspaidforwithcashof$121,000fromtheTrust’sexistingbanklinesand605,815trustunitsandwasaccountedforasabusinesscombinationusingthepurchasemethodofaccounting.

($000)

NET ASSETS ACqUIRED


Workingcapitaldeficiency (275)

Bankdebt (6,266)

Assetretirementobligation (6�7)


CONSIDERATION

Cash ��

Trustunitsissued(605,815trustunits) 12,129

Acquisitioncosts 150




C)ACQUISITIONOFINNOVAEXPLORATIONLTD.

OnOctober22,2007,theTrustpurchased97percentoftheissuedandoutstandingsharesofInnovaExplorationLtd.,apubliclytradedcompanywithpropertiesintheViewfieldareaofsoutheastSaskatchewan.OnOctober25,2007,theTrustacquiredtheremainingsharesoutstanding.Theshareswerepurchasedfortotalconsiderationof$402.9million,includingassumedbankdebtandworkingcapital($472.0millionwasallocatedtoproperty,plantandequipment).ThepurchasewaspaidthroughtheTrust’sexistingbanklinesandwasaccountedforasabusinesscombinationusingthepurchasemethodofaccounting.TheTrustowned2.2millionsharesofInnovaExplorationLtd.priortotheclosingwhichitpurchasedfor$7.51pershareor$16.6millioninSeptember2007.

($000)

NET ASSETS ACqUIRED


Riskmanagementliability (1,431)

Workingcapitaldeficiency (22,361)

Bankdebt (37,355)

Assetretirementobligation (4,816)

Futureincometaxes (62,776)


CONSIDERATION

Cash 338,145

Acquisitioncosts 5,074


D)PROPERTYACQUISITIONSANDDISPOSALS

DuringtheyearendedDecember31,2007,theTrustclosedpropertyacquisitionsfortotalconsiderationofapproximately$20.4millionandapropertydispositionfor$3.4million($18.8millionnetofdispositionswasallocatedtoproperty,plantandequipment).TheTrustrecordedpurchasepriceadjustmentsonpreviouslyclosedacquisitionsfortheyearendedDecember31,2007of$1.8million.

6. PROPERTy, PLANT AND EquIPmENT

December31,2007 ($000) Cost

Accumulateddepletion, depreciationand

amortization NetPetroleumandnaturalgasproperties 2,330,613 448,101 1,882,512

Productionequipment 606,418 63,878 542,540

Officefurnitureandequipment 7,237 2,883 4,354

2,944,268 514,862 2,429,406

December31,2006 ($000) Cost

Accumulateddepletion, depreciationand

amortization NetPetroleumandnaturalgasproperties 1,181,422 238,401 943,021

Productionequipment 300,693 31,392 269,301

Officefurnitureandequipment 3,979 2,146 1,833

1,486,094 271,939 1,214,155

AtDecember31,2007,unprovedlandcostsof$312.7million(2006–$33.9million)havebeenexcludedfromcostssubjecttodepletion.Futuredevelopmentcostsof$719.6million(2006–$147.3million)areincludedincostssubjecttodepletion.

GeneralandadministrativeexpensescapitalizedbytheTrustduringtheyearwere$4.6million(2006–$2.6million).Thecapitalizedadministrationcostsdonotincludeanyrelatedunit-basedcompensationcosts.



TheceilingtestcalculationatDecember31,2007indicatedthatthenetrecoverableamountfromprovedreservesexceededthenetcarryingvalueofthepetroleumandnaturalgaspropertiesandequipment.ThefollowingarethepricesthatwereusedintheDecember31,2007ceilingtest:

AveragePriceForecast (�)

�00� �00� �0�0 �0�� 0�� 0�3 2014 2015 �0�6 �0�7 �0��+(�)

WTI($US/bbl) 92.00 88.00 84.00 82.00 82.00 82.00 82.00 82.00 82.02 83.66 2.0%

Exchangerate 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

WTI($Cdn/bbl) 92.00 88.00 84.00 82.00 82.00 82.00 82.00 82.00 82.02 83.66 2.0%

AECO($Cdn/mcf) 6.75 7.55 7.60 7.60 7.60 7.60 7.80 7.97 8.14 8.31 2.0%

(1) Thebenchmarkpriceslistedaboveareadjustedforqualitydifferentials,heatcontent,distancetomarketandotherfactorsinperformingourceilingtest.

(2)Percentagechangerepresentsthechangeineachyearafter2017totheendofthereservelife.

7. RECLAmATION FuND

Thefollowingtablereconcilesthereclamationfund:

($000) �007 �006

Balance,beginningofyear 1,725 241

Contributions 2,566 2,502

Actualexpenditures (1,855) (1,018)

Balance,endofyear 2,436 1,725

8. BANk INDEBTEDNESS

TheTrusthasasyndicatedcreditfacilitythatwasexpandedfromseventoninebanksinOctober2007andanoperatingcreditfacilitywithoneCanadiancharteredbank.DuringtheyearendedDecember31,2007,theamountavailableunderthecombinedcreditfacilitieswasincreasedfrom$470.0millionto$800.0million.TheTrusthaslettersofcreditintheamountof$440,000outstandingatDecember31,2007.

ThecreditfacilitiesbearinterestattheprimerateplusamarginbasedonaslidingscaleratiooftheTrust’sdebttocashflows.TheTrustalsomanagesitsdebtfacilitythroughacombinationofbankacceptancesandinterestrateswaps.ThecreditfacilityissecuredbytheoilandgasassetsownedbytheTrust’swhollyownedsubsidiaries.

ThecashinterestpaidintheyearendedDecember31,2007was$25.4million(2006-$15.2million).

9. ASSET RETIREmENT OBLIGATION

ThetotalfutureassetretirementobligationwasestimatedbymanagementbasedontheTrust’snetownershipinallwellsandfacilities.Thisincludesallestimatedcoststoreclaimandabandonthewellsandfacilitiesandtheestimatedtimingofthecoststobeincurredinfutureperiods.TheTrusthasestimatedthenetpresentvalueofitstotalassetretirementobligationtobe$66.1millionatDecember31,2007(December31,2006-$45.8million)basedontotalestimatedundiscountedcashflowstosettletheobligation$153.3million(December31,2006-$104.0million).Theexpectedperioduntilsettlementrangesfrom2yearstoamaximumof50years,withthecostsexpectedtobepaidoveranaverageof10yearsforwellsand30yearsforfacilities.Theestimatedcashflowshavebeendiscountedusingacreditadjustedriskfreerateofreturnofeightpercentandaninflationrateoftwopercent.



Thefollowingtablereconcilestheassetretirementobligation:

($000) �007 �006

Assetretirementobligation,beginningofyear 45,829 33,275

Liabilitiesincurred 2,101 1,211

Liabilitiesacquiredthroughcapitalacquisitions(net) 15,568 9,141

Liabilitiessettled (1,855) (1,018)

Accretionexpense 4,431 3,220

Assetretirementobligation,endofyear 66,074 45,829

10. uNITHOLDERS’ CAPITAL

A)AUTHORIZED

Anunlimitednumberofvotingtrustunitshasbeenauthorized.

B)ISSUEDANDOUTSTANDING

TheTrusthasadistributionreinvestmentplan(the“RegularDRIP”)andapremiumdistributionreinvestmentplan(the“PremiumDRIP”).TheRegularDRIPpermitseligibleunitholderstodirecttheirdistributionstothepurchaseofadditionalunitsat95percentoftheaveragemarketprice,asdefinedintheplan.ThePremiumDRIPpermitseligibleunitholderstoelecttoreceive102percentofthecashtheunitholderwouldotherwisehavereceivedonthedistributiondate.TheadditionalcashdistributedtothePremiumDRIPunitholdersisfundedthroughtheissuanceofadditionaltrustunitsintheopenmarket.ParticipationintheRegularandPremiumDRIPissubjecttoprorationbytheTrust.UnitholderswhoparticipateineithertheRegularDRIPorthePremiumDRIParealsoeligibletoparticipateintheOptionalUnitPurchasePlanasdefinedintheplan.

InDecember2007,theTrustannouncedthatasaresultofthefederalgovernmentSafeHarbourLimitsonequityissuancesforincometrusts,theDRIP,PremiumDRIPandOptionalUnitPurchaseprogramswouldbesuspendeduntilfurthernoticebeginningwiththemonthofDecember2007.

OnSeptember25,2007,theTrustandasyndicateofunderwritersclosedaboughtdealequityfinancingpursuanttowhichthesyndicatesold8,900,000trustunitsforgrossproceedsof$165.1million($18.55pertrustunit).

�007 �006Numberof trust units

Amount ($000)

Numberoftrust units

Amount ($000)

Trustunits,beginningofyear 69,531,952 1,083,948 41,745,784 502,879

Issuedforcash 8,900,000 165,095 18,546,000 395,424

Issuedoncapitalacquisitions 29,784,377 518,961 4,663,884 101,923

Issuedonconversionofexchangeableshares - - 1,444,213 25,608

Issuedonvestingofrestrictedunits (�) 236,127 4,859 190,221 2,889

Issuedpursuanttothedistributionreinvestmentplans 5,308,276 100,660 2,604,619 49,984

Tobeissuedpursuanttothedistributionreinvestmentplans - - 337,231 5,241

Trustunits,endofyear 113,760,732 1,873,523 69,531,952 1,083,948

Cumulativeunitissuecosts - (47,100) - (38,019)

Totalunitholders’capital,endofyear 113,760,732 1,826,423 69,531,952 1,045,929

(1) Theamountoftrustunitsissuedonvestingofrestrictedunitsisnetoftrustunitspurchasedinthemarkettosatisfytheissuanceoftrustunitsundertherestrictedunit bonusplanandemployeewithholdingtaxes.



11. RESTRICTED uNIT BONuS PLAN

TheTrusthasaRestrictedUnitBonusPlan.UnderthetermsoftheRestrictedUnitBonusPlan,theTrustmaygrantrestrictedunitstodirectors,officers,employeesandconsultants.Restrictedunitsvestat331/3percentoneachofthefirst,secondandthirdanniversariesofthegrantdate.Restrictedunitholdersareeligibleformonthlydistributionsontheirrestrictedunits,immediatelyupongrant.

TheunitholdershaveapprovedamaximumnumberoftrustunitsissuableundertheRestrictedUnitBonusPlanof5,000,000trustunits.

Asummaryofthechangesintherestrictedunitsoutstandingundertheplanisasfollows:

�007 �006

Restrictedunits,beginningofyear 1,043,628 589,555

Granted 898,476 848,426

Exercised (434,557) (354,967)

Forfeited (21,497) (39,386)

Restrictedunits,endofyear 1,486,050 1,043,628

TheTrustrecordedcompensationexpenseandcontributedsurplusof$14.4millionintheyearendedDecember31,2007 (2006-$11.3million),basedontheamortizationofthefairvalueoftheunitsonthedateofgrant.Additionally,theTrustrecorded$2.0million(2006–$1.1million)ofcashdistributionsonrestrictedunits.Thetotalcashandnon-cashunitbasedcompensationrecordedintheyearwas$16.4million(2006-$12.4million).

Asummaryofthechangesinthecontributedsurplusisasfollows:

($000) �007 �006

Contributedsurplus,beginningofyear 9,150 4,409

Unitbasedcompensation 14,516 11,615

Exercisedrestrictedunits (8,442) (6,513)

Forfeitedrestrictedunits (�3�) (36�)

Contributedsurplus,endofyear 15,086 9,150

12. DEFICIT

Thedeficitbalanceiscomposedofthefollowingitems:

($000) �007 �006

Accumulatedearnings 111,044 141,743

Accumulatedcashdistributions (535,550) (290,442)

Deficit (424,506) (148,699)

Duringtheyear,presentationchangesweremadetocombinethepreviouslyreportedaccumulatedearningsandaccumulatedcashdistributionfiguresonthebalancesheetintoasingledeficitbalance.TheTrusthashistoricallypaidcashdistributionsinexcessofaccumulatedearningsascashdistributionsarebasedoncashflowfromoperatingactivitiesbeforechangesinnon-cashworkingcapitalgeneratedinthecurrentyearwhileaccumulatedearningsarebasedoncashflowfromoperatingactivitiesbeforechangesinnon-cashworkingcapitalgeneratedinthecurrentyearlessadepletion,depreciation,andaccretionexpenserecordedonoriginalproperty,plant,andequipment,unrealizedfinancialinstrumentgains/lossesandothernon-cashcharges.



13. INCOmE TAxES

In2007,incometrusttaxlegislationwaspassedresultinginatwo-tieredtaxstructuresubjectingdistributionstothefederalcorporateincometaxrateplusadeemed13percentprovincialincometaxattheTrustlevelcommencingin2011.Currently,distributionspaidtounitholders,otherthanreturnsofcapital,areclaimedasadeductionbytheTrustinarrivingattaxableincomewherebytaxiseliminatedattheTrustlevelandispaidbytheunitholders.Asaresult,thefuturetaxpositionoftheTrust,theparententity,isnowrequiredtobereflectedintheconsolidatedfutureincometaxcalculation.

OnMarch1,2007,theTrustcompletedareorganizationoftheTrustanditssubsidiaries.ThereorganizationresultedintheexistingbusinessoftheTrust,whichwascarriedonthroughlimitedpartnershipsandcorporations,beingcarriedonthroughalimitedpartnershipindirectlyownedbytheTrust.IntheTruststructure,paymentsaremadebetweentheoperatingentitiesandtheTrusttransferringboththeincomeandtaxliabilitytotheunitholders.Asaresultofthereorganization,CrescentPointrecordedafuturetaxrecoveryof$158.8millioninthefirstquarter.

OnOctober31,2006,theFinanceMinisterannouncedtheFederalGovernment’splanregardingthetaxationofincometrusts.OnJune12,2007,BillC-52BudgetImplementationAct,2007wassubstantivelyenactedbytheCanadianfederalgovernment,whichcontainslegislationtotaxpubliclytradedtrustsinCanada.Asaresult,anew31.5percenttaxwillbeappliedtodistributionsfromCanadianpublicincometrusts.ThenewtaxisnotexpectedtoapplytoCrescentPointuntil2011asatransitionperiodappliestopubliclytradedtruststhatexistedpriortoNovember1,2006.TheimpactofthesubstantiveenactmentoftrusttaxationwasthatCrescentPointrecordeda$152.3millionfutureincometaxliabilityandfutureincometaxexpenseinthesecondquarterof2007.

OnOctober30,2007,theFinanceMinisterannouncedareductionofthecorporateincometaxratefrom22.1percentto15percentby2012.Thereductionswillbephasedinbetween2008and2012.LegislationenactingthemeasuresreceivedRoyalAssentonDecember14,2007.Thereductioninthegeneralcorporatetaxratewillalsoapplytothetaxationofincometrusts,reducingthecombinedfederalanddeemedProvincialtaxratefordistributionsto29.5percentin2011and28percentin2012.

ThetaxprovisiondiffersfromtheamountcomputedbyapplyingthecombinedCanadianfederalandprovincialstatutoryincometaxratestoincomebeforefutureincometaxasfollows:

($000) �007 �006

Incomebeforeincometaxes 4,400 61,323

Statutoryincometaxrate 33.72% 36.53%

Expectedprovisionforincometaxes 1,484 22,401

Internalreorganization (158,817) -

Initialrecognitionoftaxliability 152,346 -

Effectofchangeincorporatetaxrates (23,337) (5,623)

Capitalandothertaxexpense 15,394 11,314

Non-deductibleCrowncharges - 5,359

Resourceallowance - (4,466)

Changeinamountsnotsubjecttotaxandother 49,497 (34,231)

Futureincometaxexpense(recovery) 36,567 (5,246)

ThefutureincometaxliabilityoftheTrustatDecember31,2007of$244.0millioniscomprisedoffuturetaxliabilitiesrelatedtocapitalassetsinexcessoftaxvalueof$263.3million,afuturetaxassetrelatedtoassetretirementobligationsof$18.6millionandotheritemsof$0.7million.

AtDecember31,2007,theTrusthadtaxpoolsofapproximately$1.0billionconsistingofintangibleresourcepools,tangiblepoolsandtrustunitissuecosts.

ThecashcapitaltaxespaidduringtheyearendedDecember31,2007were$14.0million(2006-$13.2million).



14. PER TRuST uNIT AmOuNTS

Thefollowingtablesummarizestheweightedaveragetrustunitsusedincalculatingnetincomepertrustunit:

�007 �006

Weightedaveragetrustunits 100,670,407 61,542,223

Trustunitsissuableonconversionofexchangeableshares(�) - 1,178,761

Dilutiveimpactofrestrictedunits 1,388,254 847,832

DILUTIvE TRUST UNITS AND ExCHANGEABLE SHARES (1) 102,058,661 63,568,816

(�) Thetrustunitsissuableonconversionoftheexchangeablesharesreflecttheweightedaverageexchangeablesharesoutstandingconvertedattheexchangeratioineffectat theendoftheyear.OnOctober27,2006,theTrustpurchasedallissuedandoutstandingexchangeableshares.

15. FINANCIAL INSTRumENTS AND RISk mANAGEmENT

A)FAIRVALUES

TheTrust’sfinancialinstrumentsrecognizedontheconsolidatedbalancesheetincludecash,accountsreceivable,prepaids,deposits,thereclamationfund,accountspayable,andaccruedliabilitiesandbankindebtedness.Thefairvalueofthesefinancialinstrumentsapproximatestheircarryingamountsduetotheirshort-termnature.

B)CREDITRISK

AsubstantialportionoftheTrust’saccountsreceivablearewithcustomersintheoilandgasindustryandaresubjecttonormalindustrycreditrisks.

C) INTEREST RATE RISk

TheTrustisexposedtointerestrateriskondebtinstrumentstotheextentofchangesintheprimeinterestrate.

D)INVESTMENTS

TheTrustmakesinvestmentssharesofpubliclytradedoilandgascompaniesfromtimetotime.TheTrustisexposedtofluctuationsinthevalueassignedtothesharesinthemarket.TheTrusthasdesignatedtheseinvestmentsasheldfortradingandassuch,theyhavebeenmarked-to-market.

FortheyearendedDecember31,2007,theunrealizedlossoninvestmentswas$1.1million.Thisiscomprisedofa$1.5millionunrealizedlossonmarketablesecuritiesinthesecondquarterof2007,anunrealizedgainof$470,000onthelongterminvestmentinthefourthquarterof2007andanunrealizedlossof$150,000onthemarketablesecuritiesinthefourthquarterof2007.

E)RISKMANAGEMENT

TheTrusthasenteredintofixedpriceoil,gasandpowercontractsalongwithinterestrateswapstomanageitsexposuretofluctuationsinthepriceofcrudeoil,gas,powerandinterestratesondebt.



ThefollowingisasummaryofthefinancialinstrumentcontractsinplaceasatDecember31,2007:

FINANCIALWTICRUDEOILCONTRACTS-CANADIANDOLLAR

Term ContractVolume (bbls/d)

Average Swap Price

($Cdn/bbl)

Average Bought

Put Price ($Cdn/bbl)

Average Sold

CallPrice ($Cdn/bbl)

Average Put

Premium ($Cdn/bbl)

�00�

January–June Swap 1,000 72.73

January–September Swap 250 68.10

January–December Swap 7,000 77.73

July–December Swap 1,000 73.52

October–December Swap 250 70.80

January–June Collar 250 65.00 82.00

January–December Collar 3,500 73.50 88.57

July–December Collar 250 70.00 91.00

January–December Put 3,500 72.58 (6.66)

2008 Weighted Average 15,500 76.90 72.85 88.44 (6.66)

�00�

January–March Swap 2,750 77.68

April–June Swap 2,750 77.58

January–June Swap 1,250 74.99

July–September Swap 3,000 74.07

July–December Swap 1,000 76.41

October–December Swap 3,000 74.37

January–December Swap 2,750 78.38

January–March Collar 250 75.00 87.00

April–June Collar 250 75.00 83.00

January–June Collar 1,250 70.00 81.01

January–September Collar 250 70.00 79.00

January–December Collar 2,750 73.55 88.14

July–September Collar 250 70.00 84.05

July–December Collar 1,250 69.00 80.37

October–December Collar 500 70.00 85.93

January–December Put 3,250 70.46 (6.03)


�0�0

January–March Swap 3,500 76.22

April–June Swap 2,750 74.38

January–September Swap 2,250 79.51

April–September Swap 750 75.53

July–September Swap 2,750 75.00

October–December Swap 1,000 87.00

January–June Collar 500 70.00 80.50

January–September Collar 2,000 73.75 86.26

July–September Collar 500 70.00 81.75

October–December Collar 1,250 78.40 96.24

January–September Put 1,000 71.00 (4.82)




FINANCIALAECONATURALGASCONTRACTS–CANADIANDOLLAR

ContractVolume (GJ/d)

AverageBought Put Price ($Cdn/GJ)

AverageSold CallPrice ($Cdn/GJ)Term

�00�January–March Collar 2,000 6.75 8.00April–October Collar 2,000 6.75 7.752008January–OctoberWeightedAverage 2,000 6.75 7.82

FINANCIALINTERESTRATECONTRACTS–CANADIANDOLLAR

ContractPrincipal ($Cdn)

FixedAnnual Rate (%)Term

January2008–May2008 Swap 50,000,000 4.41January2008–February2009 Swap 50,000,000 4.37January2008–November2010 Swap 75,000,000 4.35

FINANCIALPOWERCONTRACT–CANADIANDOLLARContract

Volume (MW/h)



PHYSICALPOWERCONTRACTS–CANADIANDOLLAR





TheTrusthastwophysicalpowercontractsandonefinancialpowercontract.Thephysicalcontractshavenotbeenmarked-to-market.TheunrealizedlossonthephysicalcontractsatDecember31,2007is$312,000.

ThefollowingtablereconcilesthemovementinthefairvalueoftheTrust’scommodity,power,foreignexchangeandinterestratecontracts:

($000) �007 �006

Riskmanagementasset,beginningofyear 1,052 -

Acquiredthroughcapitalacquisitions 2,063 -

Unrealizedmark-to-marketgain(loss) (2,664) 1,052

Riskmanagementasset,endofyear 451 1,052

Less:currentriskmanagementasset,endofyear (451) (586)

Longtermriskmanagementasset,endofyear - 466

($000) �007 �006

Riskmanagementliability,beginningofyear 19,278 32,085

Acquiredthroughcapitalacquisitions 1,431 -

Unrealizedmark-to-marketloss(gain) 102,762 (12,807)

Riskmanagementliability,endofyear 123,471 19,278

Less:currentriskmanagementliability,endofyear (63,819) (7,581)

Longtermriskmanagementliability,endofyear 59,652 11,697



16. COmmITmENTS

AtDecember31,2007,theTrusthadcontractualobligationsandcommitmentsforofficespace,equipment,vehiclesandpremiumsonputcontracts:

($000)

�00� 13,675

�00� 10,524

�0�0 6,337

�0�� 4,087

�0�� 3,531

(1) IncludedintheabovecommitmentsarerecoveriesofrentexpenseonofficespacetheTrusthasacquiredthroughvariousacquisitionsandhassubleasedouttoothertenants.

17. SuBSEquENT EvENTS

A)EQUITYFINANCINGS

OnJanuary8,2008,theTrustandasyndicateofunderwritersclosedaboughtdealequityfinancingpursuanttowhichthesyndicatesold5,155,000trustunitsforgrossproceedsof$125.0million($24.25pertrustunit).

B)ACQUISITIONOFPILOTENERGYLTD.

OnJanuary16,2008,theTrustclosedtheacquisitionofPilotEnergyLtd.,apubliclytradedcompanywithpropertiesintheViewfieldBakkenareaofsoutheastSaskatchewanbywayofaPlanofArrangementfortotalconsiderationofapproximately$76.0millionbeforeclosingadjustmentsandincludingnetdebt(basedonatrustunitpriceof$22.48).ThepurchasewasfundedthroughtheTrust’sexistingbanklinesandissuanceof2.9milliontrustunits.TheTrustowned2.0millionsharesofPilotEnergyLtd.priortotheclosingwhichitpurchasedfor$2.90pershareor$5.9millioninNovember2007.

C)INVESTMENTINSHELTERBAYENERGYINC.ANDACQUISITIONOFNONBAKKENASSETSOFLANDEXPETROLEUMCORP.

OnJanuary14,2008,theTrustannounceditsinvestmentinShelterBayEnergyInc.(“ShelterBay”),aprivateBakkenlightoilgrowthcompany.ShelterBaywillbemanagedthroughaTechnicalServicesAgreementwithCrescentPoint,willacceleratedevelopmentoftheBakkenlightoilresourceplayinsoutheastSaskatchewanandfollowasimilarbusinessplantotheTrusttodevelop,exploitandacquirelightoilandnaturalgaspropertiesinwesternCanada.CrescentPointwillinitiallyinvestupto$60millioninShelterBay,whichwillbefinancedfromavailablelinesofcredit,andwillrepresenta20percentinterestinShelterBay.

CrescentPointalsoannouncedonJanuary14,2008thattheTrusthasenteredintoanagreement(the“Agreement’)withLandexPetroleumCorp.(“Landex”),aprivateoilandgascompanytoacquireallofitsissuedandoutstandingsharesbywayofaplanofarrangement(the“Arrangement”)fortotalconsiderationofapproximately$310millionwhichincludestheassumptionof$16millionofnetdebt.Landexshareholderswillreceiveamaximumof$295millioncashandupto$75millionoftrustunitsbasedonanexchangerateof0.632trustunitsforeachLandexshare.

SubsequenttotheenteringintooftheAgreementthepartiesamendedandrestatedtheAgreement(“the“AmendedAgreement’)suchthatShelterBayhasagreedtocompletetheacquisitionofLandexpursuanttotheArrangement.UnderthetermsoftheAmendedAgreement,Landexshareholderswillreceiveamaximumof$275millioncash,upto$75millionoftrustunitsbasedonanexchangerateof0.632trustunitsforeachLandexshare,andaminimumof$20milliontoamaximumof$60millionShelterBayshares.

UnderthetermsoftheAmendedAgreement,CrescentPointwillacquirethenonBakkenassetsofLandex,for$80millionandShelterBaywillacquiretheBakkenassetsofLandexfor$230million,forcombinedconsiderationof$310million.TheArrangementissubjecttoLandexshareholderapprovalandisexpectedtocloseinlateMarch2008.



InitialfundingforShelterBayisexpectedtobe$300million,ofwhichCrescentPointwillinvest$60million,or20percent,whichCrescentPointwillfinancethroughitsexistingbanklines.UndertheAmendedAgreementLandexshareholdersareexpectedtoelecttoreceiveaminimumof$20milliontoamaximumof$60millionofShelterBaysharesinconsiderationfortheLandexBakkenassets.Theremaining$180millionto$220millionininitialfundingwillberaisedviaaprivateplacementofShelterBayshares.TheprivateplacementisexpectedtocloseinlateMarch2008.

18. COmPARATIvE INFORmATION

Certaininformationprovidedforthepreviousyearhasbeenrestatedtoconformtothecurrentyearpresentation.

DirectorsPeter Bannister, Chairman (1) (3)

Paul Colborne (2) (4)

Ken Cugnet (3) (4) (5)

Hugh Gillard (1) (2) (3)

Gerald Romanzin (1) (5)

Scott Saxberg (4)

Greg Turnbull (2) (5)

Officers Scott Saxberg

President and Chief Executive Officer

Greg Tisdale

Chief Financial Officer

C. Neil Smith

Vice President, Engineering and Business Development

Dave Balutis

Vice President, Geosciences

Tamara MacDonald

Vice President, Land

Ken Lamont

Controller and Treasurer

Head OfficeSuite 2800, 111 – 5th Avenue SW

Calgary, Alberta T2P 3Y6

Tel: (403) 693-0020

Fax: (403) 693-0070

Toll Free: (888) 693-0020

BankerThe Bank of Nova Scotia

Calgary, Alberta

AuditorPricewaterhouseCoopers LLP

Calgary, Alberta

Legal CounselMcCarthy Tétrault LLP

Calgary, Alberta

(1) Member of the Audit Committee of the Board of Directors

(2) Member of the Compensation Committee of the Board of Directors

(3) Member of the Reserves Committee of the Board of Directors

(4) Member of the Health, Safety and Environment Committee of the Board of Directors

(5) Member of the Corporate Governance and Nominating Committee

Evaluation Engineers GLJ Petroleum Consultants Ltd.

Calgary, Alberta

Sproule Associates Ltd.

Calgary, Alberta

Registrar and Transfer AgentInvestors are encouraged to contact

Crescent Point’s Registrar and Transfer

Agent for information regarding their security holdings:

Olympia Trust Company

2300, 125 – 9 Avenue SE

Calgary, Alberta T2G 0P6

Tel: (403) 261-0900

Stock ExchangeToronto Stock Exchange – TSX

Stock SymbolCPG.UN

Investor Contacts Scott Saxberg

President and Chief Executive Officer

(403) 693-0020

Greg Tisdale

Chief Financial Officer

(403) 693-0020

Trent Stangl

Manager, Marketing and Investor Relations

(403) 693-0020

Des

igne

d by

Bry

an M

ills

Irade

sso

Documents

Growth Evolution - Crescent Point Energy€¦ · company in 2001, and through conversion to a trust in 2003, ... (“Innova”) for $400 million in October and Pilot Energy Ltd. (“Pilot”)