EX-99.2 3 cpgq22022mda.htm EX-99.2 Document

Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS
Management's discussion and analysis (“MD&A”) is dated July 26, 2022 and should be read in conjunction with the unaudited consolidated financial statements for the period ended June 30, 2022 and the audited consolidated financial statements for the year ended December 31, 2021 for a full understanding of the financial position and results of operations of Crescent Point Energy Corp. (the “Company” or “Crescent Point”).
The unaudited consolidated financial statements and comparative information for the period ended June 30, 2022 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), specifically International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB").
STRUCTURE OF THE BUSINESS
The principal undertaking of Crescent Point is to carry on the business of acquiring, developing and holding interests in petroleum and natural gas properties and assets related thereto through a general partnership and wholly owned subsidiaries. Amounts in this MD&A are in Canadian dollars unless noted otherwise. References to “US$” and "US dollars" are to United States (“U.S.”) dollars.
Overview
Increased benchmark commodity prices and narrow differentials supported strong financial results during the second quarter. The Company reported adjusted funds flow from operations of $599.1 million, adjusted net earnings from operations of $272.1 million and net income of $331.5 million. Strong operational execution continued during the second quarter with production averaging 129,176 boe/d and development expenditures of $196.9 million with 31 (29.7 net) wells drilled.
The Company generated $377.8 million of excess cash flow during the quarter and reduced net debt by $307.3 million, after the impact of dividends and share repurchases, exiting the quarter with a net debt balance of approximately $1.47 billion and a net debt to adjusted funds flow from operations ratio of 0.7 times. During the second quarter, 7.2 million common shares were repurchased for $70.9 million, bringing total share repurchases from December 2021 through June 2022 to $150.1 million and 17.4 million common shares.
The Company has successfully completed the divestment of certain non-core assets. During the second quarter, the Company closed the sale of certain non-core East Shale Duvernay assets for cash proceeds of $37.9 million, including closing adjustments. Subsequent to the second quarter in early July, the Company also closed the sale of its non-core Saskatchewan Viking assets for cash proceeds of approximately $244.1 million, including closing adjustments. The Company revised its 2022 annual average production guidance to 130,000 - 134,000 boe/d (from 133,000 - 137,000 boe/d) in part to reflect the impact of these transactions, while development capital expenditures guidance remained unchanged at $875.0 - $900.0 million as previously announced.
Strong financial results and proceeds from non-core asset sales enabled the Company to achieve its near-term debt target of $1.30 billion early in the third quarter, ahead of its anticipated timeline. With this success, the Company enhanced its return of capital to shareholders with an increase to its base dividend and updated return of capital framework, where the majority of excess cash flow can be returned to shareholders. The Company announced an increase to its quarterly dividend to $0.080 per share from $0.065 per share, effective for the dividend payable on October 3, 2022. In addition to the base dividend, the Company announced an updated return of capital framework targeting the return of up to 50 percent of discretionary excess cash flow beginning in the third quarter of 2022.
Adjusted funds flow from operations, adjusted net earnings from operations, net debt, net debt to adjusted funds flow from operations, excess cash flow and discretionary excess cash flow are specified financial measures that do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
Results of Operations
Production
Three months ended June 30Six months ended June 30
20222021
% Change
20222021
% Change
Crude oil and condensate (bbls/d)91,250 107,444 (15)92,106 101,394 (9)
NGLs (bbls/d)16,139 18,608 (13)16,586 15,978 4 
Natural gas (mcf/d)
130,724 135,531 (4)133,679 100,327 33 
Total (boe/d)
129,176 148,641 (13)130,972 134,093 (2)
Crude oil and liquids (%)83 85 (2)83 88 (5)
Natural gas (%)
17 15 2 17 12 5 
Total (%)
100 100 — 100 100 — 
CRESCENT POINT ENERGY CORP.
1

The following is a summary of Crescent Point's production by area:
Three months ended June 30Six months ended June 30
Production By Area (boe/d)2022
2021 (1)
% Change2022
2021 (1)
% Change
Saskatchewan
71,189 84,305 (16)71,601 86,110 (17)
Alberta
41,646 41,648 — 41,533 25,161 65 
United States
16,341 22,688 (28)17,838 22,822 (22)
Total
129,176 148,641 (13)130,972 134,093 (2)
(1)Comparative periods revised to reflect current period presentation. Refer to the Critical Accounting Estimates section of the Company's MD&A for the year ended December 31, 2021 for further information.
Total production averaged 129,176 boe/d during the second quarter of 2022 compared to 148,641 boe/d for the second quarter of 2021. The decrease is primarily due to the non-core southeast Saskatchewan asset disposition in June 2021 and the effect of lower capital spending levels in 2021. Production in the second quarter of 2022 was also impacted by a severe storm and power outage in North Dakota that reduced production by approximately 4,000 boe/d.
The Company's production averaged 130,972 boe/d for the six months ended June 30, 2022 compared to 134,093 boe/d for the same period of 2021. The decrease reflects the lower volumes during the second quarter of 2022 as mentioned above, which were partially offset by additional volumes from the Kaybob Duvernay acquisition that closed in April 2021.
The Company's weighting to crude oil and liquids production in the three and six months ended June 30, 2022 decreased by 2 percent and 5 percent, respectively, primarily due to higher natural gas production as a result of the acquisition of the Kaybob Duvernay assets and the disposition of oil weighted assets in southeast Saskatchewan, both of which closed in the second quarter of 2021.
Exhibit 1
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Marketing and Prices
Three months ended June 30Six months ended June 30
Average Selling Prices (1)
20222021% Change20222021
% Change
Crude oil and condensate ($/bbl)134.50 75.88 77 124.04 70.88 75 
NGLs ($/bbl)
50.57 36.78 37 49.17 37.16 32 
Natural gas ($/mcf)
8.02 3.64 120 6.77 3.92 73 
Total ($/boe)
109.44 62.78 74 100.36 60.95 65 
(1)The average selling prices reported are before realized commodity derivatives and transportation.
CRESCENT POINT ENERGY CORP.
2

Three months ended June 30Six months ended June 30
Benchmark Pricing
20222021
% Change
20222021
% Change
Crude Oil Prices
WTI crude oil (US$/bbl) (1)
108.42 66.06 64 101.44 61.95 64 
WTI crude oil (Cdn$/bbl)
138.47 81.06 71 128.89 77.24 67 
Crude Oil and Condensate Differentials
LSB crude oil (Cdn$/bbl) (2)
(1.92)(4.12)(53)(3.47)(5.21)(33)
FOS crude oil (Cdn$/bbl) (3)
(14.30)(11.28)27 (15.36)(11.60)32 
UHC crude oil (US$/bbl) (4)
4.29 0.53 709 2.91 (0.69)(522)
C5+ condensate (Cdn$/bbl) (5)
(0.09)0.40 (123)1.08 0.32 238 
Natural Gas Prices
AECO daily spot natural gas (Cdn$/mcf) (6)
7.24 3.09 134 6.00 3.11 93 
AECO monthly index natural gas (Cdn$/mcf)
6.27 2.85 120 5.43 2.89 88 
NYMEX natural gas (US$/mmbtu) (7)
7.17 2.83 153 6.05 2.76 119 
Foreign Exchange Rate
Exchange rate (US$/Cdn$)
0.783 0.815 (4)0.787 0.802 (2)
(1)WTI refers to the West Texas Intermediate crude oil price.
(2)LSB refers to the Light Sour Blend crude oil price.
(3)FOS refers to the Fosterton crude oil price, which typically receives a premium to the Western Canadian Select price.
(4)UHC refers to the Sweet at Clearbrook crude oil price.
(5)C5+ condensate refers to the Canadian C5+ condensate index.
(6)AECO refers to the Alberta Energy Company natural gas price.
(7)NYMEX refers to the New York Mercantile Exchange natural gas price.
Benchmark crude oil prices strengthened in the three and six months ended June 30, 2022 compared to the same periods in 2021, primarily due to the Russian invasion of Ukraine and official European Union bans on waterborne Russian crude oil leading to global oil supply constraints. Global demand continued to recover from the impacts of the COVID-19 pandemic and OPEC fell short of planned supply increases, which resulted in lower global inventory levels.
Natural gas prices strengthened in the three and six months ended June 30, 2022 compared to the same periods in 2021, primarily due to the escalation of the Russian invasion of Ukraine and sanctions occurring in Europe, which spurred incremental strength in global gas prices and further demand for natural gas. During the second quarter of 2022, Alberta gas prices remained strong due to seasonal peak level demand and lower inventory levels. The AECO daily benchmark price was 134 percent and 93 percent higher in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.
U.S. natural gas prices were higher on average in the first half of 2022 compared to the same period in 2021 as demand continued to outpace supply and the impacts from the Russian invasion discussed above pushed global gas prices upward. The NYMEX benchmark gas price was 153 percent and 119 percent higher in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.
Exhibit 2
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LSB and UHC crude oil differentials improved in the three and six months ended June 30, 2022 compared to the same periods in 2021, primarily due to seasonal maintenance of oil sands upgraders which removed significant light oil supply from the market. FOS crude oil differentials widened in the three and six months ended June 30, 2022 compared to the same periods in 2021. In 2021, the Company received higher premiums to Western Canadian Select on FOS sales due to apportionment on the Enbridge mainline. Condensate differentials weakened in the second quarter of 2022 compared to the same period of 2021, primarily due to reduced Gulf Coast exports. Condensate differentials improved in the six months ended June 30, 2022, primarily due to the increase in demand as a result of the continued recovery from the COVID-19 pandemic.
CRESCENT POINT ENERGY CORP.
3

For the three and six months ended June 30, 2022, the Company's average selling price for crude oil and condensate increased 77 percent and 75 percent from the same periods in 2021, respectively, primarily due to the 71 percent and 67 percent increase in the Cdn$ WTI benchmark price in three and six months ended June 30, 2022, respectively, and a narrower corporate oil price differential.
Crescent Point's corporate crude oil and condensate differential relative to Cdn$ WTI for the three and six months ended June 30, 2022 was $3.97 per bbl and $4.85 per bbl, respectively, compared to $5.18 per bbl and $6.36 per bbl in the same periods of 2021. The narrower corporate oil differential was primarily due to improved LSB, UHC and C5+ differentials for the three and six months ended June 30, 2022, compared to the same periods in 2021 and the improved condensate differentials for the six months ended June 30, 2022.
For the three and six months ended June 30, 2022, the Company's average selling price for NGLs increased significantly from $36.78 per bbl to $50.57 per bbl and from $37.16 per bbl to $49.17 per bbl, respectively, from the same periods in 2021. The increases in average selling price for NGLs were primarily due to the increases in US$ WTI and propane benchmark prices.
The Company's average selling price for natural gas for the three and six months ended June 30, 2022 increased 120 percent and 73 percent, respectively, compared to the same periods in 2021, primarily as a result of the increases in the AECO daily and NYMEX benchmark prices.
Exhibit 3
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Exhibit 4
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Commodity Derivatives
Management of cash flow variability is an integral component of Crescent Point's business strategy. Crescent Point regularly monitors changing business and market conditions while executing its strategic risk management program. Crescent Point proactively manages the risk exposure inherent in movements in the price of crude oil, propane, natural gas, interest rates, the Company's share price and the US/Cdn dollar exchange rate through the use of derivatives with investment-grade counterparties.
The Company's crude oil and NGL derivatives are referenced to WTI and Conway C3, respectively. The Company's natural gas derivatives are referenced to NYMEX and the AECO monthly index. Crescent Point utilizes a variety of derivatives, including swaps, collars and put options, to protect against downward commodity price movements while also providing the opportunity for some upside participation during periods of rising prices. This reduces the volatility of the selling price of crude oil and natural gas production and provides a measure of stability to the Company's cash flow. See Note 18 – "Financial Instruments and Derivatives" in the unaudited consolidated financial statements for the period ended June 30, 2022 for additional information on the Company's derivatives.
CRESCENT POINT ENERGY CORP.
4

The following is a summary of the realized commodity derivative losses:
Three months ended June 30Six months ended June 30
($ millions, except volume amounts)
20222021
% Change
20222021
% Change
Average crude oil volumes hedged (bbls/d) (1)
46,750 56,000 (17)46,750 56,497 (17)
Crude oil realized derivative loss (1)
(259.0)(97.0)167 (421.3)(155.8)170 
per bbl
(31.19)(9.92)214 (25.27)(8.49)198 
Average NGL volumes hedged (bbls/d)500 — 100 500 — 100 
NGL realized derivative loss(0.4)— (100)(1.0)— (100)
per bbl
(0.27)— (100)(0.33)— (100)
Average natural gas volumes hedged (GJ/d) (2) (3)
25,055 29,615 (15)32,480 27,320 19 
Natural gas realized derivative loss (3)
(1.2)(0.7)71 (3.7)(1.6)131 
per GJ(0.10)(0.06)67 (0.15)(0.09)67 
Average barrels of oil equivalent hedged (boe/d) (1) (3)
51,208 60,678 (16)52,381 60,813 (14)
Total realized commodity derivative losses (1) (3)
(260.6)(97.7)167 (426.0)(157.4)171 
per boe
(22.17)(7.22)207 (17.97)(6.48)177 
(1)The crude oil realized derivative loss for the three and six months ended June 30, 2022 and June 30, 2021 includes the realized derivative gains and losses on financial crude oil price differential contracts. The average crude oil volumes hedged and average barrels of oil equivalent hedged do not include the hedged volumes related to financial crude oil price differential contracts.
(2)GJ/d is defined as gigajoules per day.
(3)The natural gas derivative loss for the three months ended June 30, 2022 includes the realized derivative gains on financial natural gas price differential contracts. The average natural gas volumes hedged and average barrels of oil equivalent hedged do not include the hedged volumes related to financial natural gas price differentials contracts.
The Company's realized derivative losses for crude oil were $259.0 million and $421.3 million for the three and six months ended June 30, 2022, respectively, compared to $97.0 million and $155.8 million for the same periods in 2021. The increased realized derivative losses were primarily attributable to the increase in the Cdn$ WTI benchmark price.
The Company's realized derivative losses for NGLs were $0.4 million and $1.0 million for the three and six months ended June 30, 2022, respectively, compared to nil for the same periods of 2021. The losses in 2022 were due to the increases in the Conway C3 benchmark prices compared to the Company's average derivative NGL prices.
Crescent Point's realized derivative losses for natural gas were $1.2 million and $3.7 million for the three and six months ended June 30, 2022, respectively, compared to $0.7 million and $1.6 million for the same periods in 2021. The losses in 2022 were due to the higher average AECO monthly index prices.
Exhibit 5
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The following is a summary of the Company's unrealized commodity derivative gains (losses):
Three months ended June 30Six months ended June 30
($ millions)
20222021
% Change
20222021
% Change
Crude oil85.6 (102.5)(184)(190.6)(184.8)3 
NGL0.9 — 100 (0.7)— (100)
Natural gas
8.5 (6.1)(239)7.7 (7.0)(210)
Total unrealized commodity derivative gains (losses)95.0 (108.6)(187)(183.6)(191.8)(4)
During the second quarter of 2022, the Company recognized a total unrealized derivative gain of $95.0 million on its commodity contracts compared to a total unrealized derivative loss of $108.6 million in the same period of 2021, primarily due to the maturity of out-of-the-money derivative contracts during the quarter, partially offset by the increase in the Cdn$ WTI forward benchmark prices at June 30, 2022 compared to March 31, 2022.
CRESCENT POINT ENERGY CORP.
5

In the six months ended June 30, 2022, the Company recognized a total unrealized derivative loss of $183.6 million on its commodity contracts compared to $191.8 million in the same period of 2021. The unrealized derivative loss in 2022 was primarily attributable to the increase in the Cdn$ WTI forward benchmark prices at June 30, 2022 compared to December 31, 2021, partially offset by the maturity of out-of-the-money derivative contracts.
Oil and Gas Sales
Three months ended June 30Six months ended June 30
($ millions) (1)
20222021
% Change
20222021
% Change
Crude oil and condensate sales1,116.9 742.0 51 2,067.9 1,300.8 59 
NGL sales
74.2 62.3 19 147.6 107.5 37 
Natural gas sales
95.4 44.9 112 163.7 71.1 130 
Total oil and gas sales
1,286.5 849.2 51 2,379.2 1,479.4 61 
(1)Oil and gas sales are reported before realized commodity derivatives.
Total oil and gas sales increased by 51 percent and 61 percent in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021. The increases were primarily due to the increase in realized crude oil prices as a result of the recovery in benchmark commodity prices, partially offset by lower production volumes.
Exhibit 6
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Royalties
Three months ended June 30Six months ended June 30
($ millions, except % and per boe amounts)20222021% Change20222021% Change
Royalties172.7 106.8 62 319.1 192.5 66 
As a % of oil and gas sales13 13 — 13 13 — 
Per boe14.69 7.90 86 13.46 7.93 70 
Royalties increased 62 percent and 66 percent in the three and six months ended June 30, 2022, respectively, compared to the same 2021 periods. This increase was largely due to the increase in oil and gas sales in both periods. Royalties as a percentage of oil and gas sales remained consistent in the three and six months ended June 30, 2022 with the 2021 comparative periods.
Exhibit 7
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CRESCENT POINT ENERGY CORP.
6

Operating Expenses
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)
20222021
% Change
20222021
% Change
Operating expenses
180.5 170.8 6 349.2 313.4 11 
Per boe
15.36 12.63 22 14.73 12.91 14 
Operating expenses increased 6 percent and 11 percent in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021. The increases were due to several factors including higher overall field activity levels in 2022 in response to stronger commodity pricing and general inflationary pressures across a number of cost categories. The increases were primarily related to gas gathering and processing, maintenance, utilities, fuel, labour and trucking expenditures.
Operating expenses per boe increased by 22 percent and 14 percent in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily due to the increased activity levels and cost increases mentioned above, combined with lower production volumes. Operating expenses per boe in the second quarter of 2022 were particularly affected by a severe winter storm and power outage in April 2022 that reduced the Company's North Dakota production volumes, which returned to full capacity near the end of May 2022.
Exhibit 8
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Transportation Expenses
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)20222021% Change20222021% Change
Transportation expenses33.2 32.2 3 65.8 57.3 15 
Per boe2.82 2.38 18 2.78 2.36 18 
Transportation expenses increased 3 percent and 15 percent in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily due to higher pipeline tolls and tariffs, partially offset by lower production volumes. On a per boe basis, transportation expenses increased by $0.44 per boe and $0.42 per boe in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily due to increased pipeline tariff rates.
Exhibit 9
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CRESCENT POINT ENERGY CORP.
7

Netback
Three months ended June 30Six months ended June 30
2022202120222021
Total (2)
($/boe)
Total (2)
($/boe)
% Change
Total (2)
($/boe)
Total (2)
($/boe)
% Change
Oil and gas sales109.44 62.78 74 100.36 60.95 65 
Royalties
(14.69)(7.90)86 (13.46)(7.93)70 
Operating expenses
(15.36)(12.63)22 (14.73)(12.91)14 
Transportation expenses
(2.82)(2.38)18 (2.78)(2.36)18 
Operating netback (1)
76.57 39.87 92 69.39 37.75 84 
Realized loss on commodity derivatives(22.17)(7.22)207 (17.97)(6.48)177 
Netback (1)
54.40 32.65 67 51.42 31.27 64 
(1)Specified financial measure that does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
(2)The dominant production category for the Company's properties is crude oil and condensate. These properties include associated natural gas and NGL volumes, therefore, the total operating netback and netback have been presented.
The Company's operating netback for the three and six months ended June 30, 2022 increased significantly to $76.57 per boe and $69.39 per boe, respectively, from $39.87 per boe and $37.75 per boe in the same periods of 2021. The increases in the Company's operating netback were primarily due to the increase in average selling price, partially offset by higher royalties and the increases in operating and transportation expenses. The increases in the Company's netback was a result of the increase in the operating netback, partially offset by an increased realized loss on commodity derivatives.
Exhibit 10
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General and Administrative Expenses
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)
20222021% Change20222021
% Change
Gross general and administrative expenses32.2 41.9 (23)67.0 70.0 (4)
Overhead recoveries(4.5)(4.0)13 (9.4)(9.6)(2)
Capitalized
(8.6)(7.7)12 (17.0)(15.0)13 
Total general and administrative expenses
19.1 30.2 (37)40.6 45.4 (11)
Transaction costs(0.3)(11.7)(97)(0.4)(11.8)(97)
General and administrative expenses18.8 18.5 2 40.2 33.6 20 
Per boe
1.60 1.37 17 1.70 1.38 23 
General and administrative ("G&A") expenses increased 2 percent and 20 percent in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021. The increases in 2022, which were primarily in the first quarter, were mainly attributable to higher employee related costs and professional fees.
For the three and six months ended June 30, 2022, G&A expenses on a per boe basis increased 17 percent and 23 percent, respectively, compared to the same periods in 2021, primarily due to the increases in total G&A discussed above and lower production volumes.
CRESCENT POINT ENERGY CORP.
8

Exhibit 11
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Interest Expense
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)
20222021% Change20222021
% Change
Interest expense on long-term debt
17.9 24.0 (25)37.8 47.9 (21)
Unrealized (gain) loss on interest derivative contracts(1.8)2.5 (172)0.3 2.4 (88)
Interest expense16.1 26.5 (39)38.1 50.3 (24)
Per boe
1.37 1.96 (30)1.61 2.07 (22)
Interest expense on long-term debt decreased 25 percent and 21 percent in the three and six months ended June 30, 2022 compared to the same periods in 2021, primarily due to the Company's lower average debt balances, partially offset by a higher effective interest rate.
Crescent Point's hedged effective interest rate increased to 4.55 percent and 4.44 percent in three and six months ended June 30, 2022, respectively, compared to 3.79 percent and 4.10 percent in the same periods of 2021, primarily due to the increase in underlying market rates and the lower proportion of the Company's debt at lower floating rates, partially offset by the decrease in the margin on interest from the Company's credit facilities.
Crescent Point manages its interest rate exposure through a combination of interest rate swaps and a debt portfolio including short-term floating rate bank debt and long-term fixed rate senior guaranteed notes. At June 30, 2022, approximately 87 percent of the Company's long-term debt had fixed interest rates.
Exhibit 12
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CRESCENT POINT ENERGY CORP.
9

Foreign Exchange Gain (Loss)
Three months ended June 30Six months ended June 30
($ millions)
20222021% Change20222021% Change
Realized gain (loss) on CCS - principal63.6 (10.3)(717)63.8 (23.9)(367)
Translation of US dollar long-term debt(49.8)48.2 (203)(30.7)73.7 (142)
Unrealized loss on CCS - principal and foreign
exchange swaps		(16.2)(35.5)(54)(42.5)(44.6)(5)
Other
3.7 (0.6)(717)2.6 (2.0)(230)
Foreign exchange gain (loss)1.3 1.8 (28)(6.8)3.2 (313)
Crescent Point has US dollar denominated debt, including US dollar senior guaranteed notes and short-term London Inter-bank Offered Rate ("LIBOR") loans under its bank credit facilities. The Company hedges its foreign exchange exposure using a combination of CCS and foreign exchange swaps. During the three and six months ended June 30, 2022, the Company realized a $63.6 million and $63.8 million gain, respectively, on CCS related to senior guaranteed note maturities and LIBOR loan maturities.
The Company records foreign exchange gains or losses on the period end translation of US dollar long-term debt and related accrued interest. For the three and six months ended June 30, 2022, the Company recorded foreign exchange losses of $49.8 million and $30.7 million, respectively, which were attributed to the weaker Canadian dollar at June 30, 2022 as compared to March 31, 2022 and December 31, 2021, respectively.
For the three and six months ended June 30, 2022, Crescent Point recorded unrealized losses on foreign exchange derivatives of $16.2 million and $42.5 million, respectively, due to the maturity of in-the-money CCS contracts. The unrealized derivative losses in the three and six months ended June 30, 2022 were partially offset by the impact of the weaker forward Canadian dollar on the Company's CCS at June 30, 2022 as compared to March 31, 2022 and December 31, 2021, respectively.
Share-based Compensation Expense
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)20222021% Change20222021% Change
Share-based compensation costs 17.1 14.8 16 53.4 45.9 16 
Realized gain on equity derivative contracts(0.3)— (100)(26.1)(9.7)169 
Unrealized (gain) loss on equity derivative contracts(0.4)(3.0)(87)5.8 (13.5)(143)
Capitalized(2.0)(2.6)(23)(10.0)(9.1)10 
Share-based compensation expense14.4 9.2 57 23.1 13.6 70 
Per boe1.23 0.68 81 0.97 0.56 73 
During the three and six months ended June 30, 2022, the Company recorded share-based compensation ("SBC") costs of $17.1 million and $53.4 million, respectively, compared to $14.8 million and $45.9 million in the same periods of 2021. The higher SBC costs in 2022 primarily relate to the increase in the Company's share price along with higher performance achievements associated with the Company's Performance Share Unit ("PSU") Plan.
During the three months ended June 30, 2022, the Company recognized an unrealized gain on equity derivative contracts of $0.4 million compared to $3.0 million in the same period of 2021, primarily due to the increase in the Company's share price at June 30, 2022 compared to March 31, 2022. In the six months ended June 30, 2022, the Company recognized an unrealized loss of $5.8 million compared to an unrealized gain of $13.5 million in the same period of 2021. The unrealized loss was primarily due to the maturity of in-the-money equity derivative contracts in the first quarter of 2022, partially offset by the increase in the Company's share price at June 30, 2022 compared to December 31, 2021. In the six months ended June 30, 2022, the Company also recognized a realized gain of $26.1 million on equity derivative contracts which matured during the first quarter of 2022.
CRESCENT POINT ENERGY CORP.
10

Exhibit 13
chart-4904c1f8cbca44aca7aa.jpg
The following table summarizes the number of restricted shares, Employee Share Value Plan ("ESVP") awards, Performance Share Units, Deferred Share Units ("DSUs") and stock options outstanding:
June 30, 2022December 31, 2021
Restricted Share Bonus Plan (1)
2,498,736 3,267,717 
Employee Share Value Plan 5,476,253 8,329,291 
Performance Share Unit Plan (2)
4,118,686 3,214,620 
Deferred Share Unit Plan1,656,010 1,556,780 
Stock Option Plan (3)
4,373,957 5,839,464 
(1)At June 30, 2022, the Company was authorized to issue up to 11,478,298 common shares (December 31, 2021 - 12,924,280 common shares).
(2)Based on underlying units before any effect of performance multipliers.
(3)At June 30, 2022, the weighted average exercise price is $4.34 per share (December 31, 2021 - $4.04 per share).
As of the date of this report, the Company had 2,358,865 restricted shares, 5,404,859 ESVP awards, 4,119,089 PSUs, 1,644,700 DSUs and 4,373,957 stock options outstanding.
Depletion, Depreciation and Amortization
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)
20222021
% Change
20222021
% Change
Depletion and depreciation
237.8 184.8 29 448.0 321.6 39 
Amortization of exploration and evaluation undeveloped land 4.6 13.3 (65)11.2 27.1 (59)
Depletion, depreciation and amortization242.4 198.1 22 459.2 348.7 32 
Per boe20.62 14.65 41 19.37 14.37 35 
For the three and six months ended June 30, 2022, the Company's depletion, depreciation and amortization ("DD&A") rate increased to $20.62 per boe and $19.37 per boe from $14.65 per boe and $14.37 per boe from the same periods in 2021, respectively. The increases were due to the impairment reversals recorded in the second quarter of 2021 and first quarter of 2022, which increased the carrying value of the Company's property, plant and equipment ("PP&E").
DD&A increased 22 percent and 32 percent for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily due to the higher DD&A rates, partially offset by lower amortization of exploration and evaluation ("E&E") undeveloped land and lower production volumes.

CRESCENT POINT ENERGY CORP.
11

Exhibit 14
chart-924fd15f15cf435cad4a.jpg
Impairment Reversal
Three months ended June 30Six months ended June 30
($ millions, except per boe amounts)
20222021
% Change
20222021
% Change
Impairment reversal— (2,514.4)(100)(1,484.9)(2,514.4)(41)
Per boe— (185.89)(100)(62.64)(103.60)(40)
In the first quarter of 2022, the Company recognized an impairment reversal of $1.48 billion on its development and production assets due to the increase in forecast benchmark commodity prices at March 31, 2022 compared to June 30, 2021, which was the last time the Company completed an impairment test on its development and production assets. In the second quarter of 2021, the Company recognized an impairment reversal of $2.51 billion on its development and production assets, primarily due to the increase in forecast benchmark commodity prices at June 30, 2021. See Note 5 – "Property, Plant and Equipment" in the unaudited consolidated financial statements for the period ended June 30, 2022 for further information.
Taxes
Three months ended June 30Six months ended June 30
($ millions)
20222021
% Change
20222021
% Change
Current tax expense
— — — — — — 
Deferred tax expense121.7 523.3 (77)448.2 530.3 (15)
Current Tax Expense
In both the three and six months ended June 30, 2022 and June 30, 2021, the Company recorded current tax expense of nil. Refer to the Company's Annual Information Form for the year ended December 31, 2021 for information on the Company's expected tax horizon.
Deferred Tax Expense
In the three and six months ended June 30, 2022, the Company recorded deferred tax expense of $121.7 million and $448.2 million, respectively, compared to $523.3 million and $530.3 million in the same periods of 2021. The deferred tax expense in the second quarter of 2022 primarily relates to the pre-tax income recorded in the period. The deferred tax expense in the six months ended June 30, 2022 primarily relates to pre-tax income mainly resulting from the impairment reversal, partially offset by a change in estimate for future usable tax pools due to higher forecast commodity prices.
CRESCENT POINT ENERGY CORP.
12

Cash Flow from Operating Activities, Adjusted Funds Flow from Operations, Net Income and Adjusted Net Earnings from Operations
Three months ended June 30Six months ended June 30
($ millions, except per share amounts)
20222021% Change20222021
% Change
Cash flow from operating activities
529.6 285.5 85 955.7 589.2 62 
Adjusted funds flow from operations (1)
599.1 387.8 54 1,133.1 650.5 74 
Net income331.5 2,143.3 (85)1,515.1 2,165.0 (30)
Net income per share - diluted0.58 3.65 (84)2.62 3.85 (32)
Adjusted net earnings from operations (1)
272.1 117.6 131 513.0 212.7 141 
Adjusted net earnings from operations per share - diluted (1)
0.47 0.20 135 0.89 0.38 134 
(1)Specified financial measure that does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
Cash flow from operating activities increased from $285.5 million in the second quarter of 2021 to $529.6 million in the second quarter of 2022. In the six months ended June 30, 2022, cash flow from operating activities increased from $589.2 million to $955.7 million. Changes in cash flow from operating activities were due to fluctuations in adjusted funds flow from operations ("FFO") and working capital.
Exhibit 15

chart-e125bc4ff78745fd8fda.jpg
(1)Specified financial measure that does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
The Company's adjusted FFO increased in both the three and six months ended June 30, 2022 to $599.1 million and $1.13 billion, respectively, compared to $387.8 million and $650.5 million in the same periods of 2021. The increases were primarily a result of the higher total operating netback, partially offset by the increased realized commodity derivative losses and lower production volumes.
Exhibit 16
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CRESCENT POINT ENERGY CORP.
13

In the three months ended June 30, 2022, the Company reported net income of $331.5 million compared to $2.14 billion in the same period of 2021, primarily as a result of the impairment reversal recorded in the second quarter of 2021, partially offset by fluctuations in deferred tax and unrealized derivative losses and an increase to adjusted FFO. In the second quarter of 2022, the Company recorded net income per share - diluted of $0.58 compared to $3.65 in the same period of 2021.
In the six months ended June 30, 2022, the Company reported net income of $1.52 billion compared to $2.17 billion in the same period of 2021, primarily as a result of the lower impairment reversal recorded in the first quarter of 2022 compared to the impairment reversal recorded in the second quarter of 2021, partially offset by an increase in adjusted FFO. In the six months ended June 30, 2022, the Company recorded net income per share - diluted of $2.62 compared to $3.85 in the same period of 2021.
Exhibit 17
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The Company reported adjusted net earnings from operations for the three months ended June 30, 2022 of $272.1 million compared to $117.6 million in the same period of 2021, primarily due to the increase in adjusted FFO, partially offset by the increase in depletion and depreciation and fluctuations in deferred taxes. Adjusted net earnings from operations per share - diluted for the second quarter of 2022 increased to $0.47 from $0.20 in the second quarter of 2021.
The Company's adjusted net earnings from operations for the six months ended June 30, 2022 was $513.0 million compared to $212.7 million in the second quarter of 2021, primarily due to the increase in adjusted FFO, partially offset by the increase in depletion and depreciation and fluctuations in deferred taxes. Adjusted net earnings from operations per share - diluted for the six months ended June 30, 2022 increased to $0.89 from $0.38 in the same period of 2021.
Exhibit 18
chart-464cfb25feac427eae9a.jpg
Excess Cash Flow and Discretionary Excess Cash Flow
For the three and six months ended June 30, 2022, excess cash flow increased to $377.8 million and $667.1 million, respectively, from $274.6 million and $404.5 million in the same periods of 2021, primarily as a result of the increases in adjusted FFO, partially offset by higher capital expenditures and decommissioning expenditures. Discretionary excess cash flow for the three and six months ended June 30, 2022 increased to $340.7 million and $630.2 million, respectively, from $273.1 million and $401.7 million in the same periods of 2021, as a result of the increase in excess cash flow, partially offset by an increase in dividends.
CRESCENT POINT ENERGY CORP.
14

Dividends
Three months ended June 30Six months ended June 30
($ millions, except per share amounts)20222021% Change20222021% Change
Dividends declared to shareholders37.1 1.5 2,373 36.9 2.8 1,218 
Dividends declared to shareholders per share0.0650 0.0025 2,500 0.0650 0.0050 1,200 
In May 2022, Crescent Point declared a quarterly cash dividend of $0.065 per share to be paid on July 4, 2022.
Capital Expenditures
Three months ended June 30Six months ended June 30
($ millions)
20222021% Change20222021
% Change
Capital acquisitions
0.3 936.3 (100)1.2 936.3 100 
Capital dispositions
(37.8)(87.9)(57)(40.7)(95.1)(57)
Development capital expenditures
196.9 88.4 123 401.2 207.6 93 
Land expenditures
3.6 2.0 80 9.3 2.9 221 
Capitalized administration (1)
10.5 10.0 5 26.8 23.6 14 
Corporate assets
0.5 0.3 67 1.0 1.0 — 
Total
174.0 949.1 (82)398.8 1,076.3 (63)
(1)Capitalized administration excludes capitalized equity-settled SBC.
Capital Acquisitions and Dispositions
Minor Property Acquisitions and Dispositions
In the six months ended June 30, 2022, the Company completed minor property acquisitions and dispositions for total net consideration received of $39.5 million.
Assets Held for Sale
At June 30, 2022, the Company classified its non-core Saskatchewan Viking assets as held for sale at the lesser of their carrying value and recoverable amount. These assets were successfully sold in the third quarter of 2022.
Development Capital Expenditures
The Company's development capital expenditures for the three months ended June 30, 2022 were $196.9 million, compared to $88.4 million in the same period of 2021. In the second quarter of 2022, 31 (29.7 net) wells were drilled and $14.1 million was spent on facilities and seismic.
The Company's development capital expenditures for the six months ended June 30, 2022 were $401.2 million, compared to $207.6 million in the same period of 2021. In the six months ended June 30, 2022, 91 (86.5 net) wells were drilled and $30.2 million was spent on facilities and seismic.
Refer to the Guidance section in this MD&A for Crescent Point's development capital expenditure guidance for 2022.
Exhibit 19
chart-17a909b3a85c4a6b874a.jpg
Lease Liability
At June 30, 2022, the Company had $131.4 million of lease liabilities for contracts related to office space, fleet vehicles and equipment.
CRESCENT POINT ENERGY CORP.
15

Decommissioning Liability
The decommissioning liability, including liabilities associated with assets held for sale, decreased by $107.7 million in the second quarter of 2022, from $822.2 million at March 31, 2022 to $714.5 million at June 30, 2022. The decrease primarily relates to the change in discount and inflation rate estimates and the Company's continued abandonment and reclamation program. The liability is based on estimated undiscounted cash flows before inflation to settle the obligation of $899.0 million.
Liquidity and Capital Resources
Capitalization Table
($ millions, except share, per share, ratio and percent amounts)
June 30, 2022December 31, 2021
Net debt (1)
1,467.9 2,005.0 
Shares outstanding
567,368,661 579,484,032 
Market price at end of period (per share)9.15 6.75 
Market capitalization5,191.4 3,911.5 
Enterprise value (1)
6,659.3 5,916.5 
Net debt as a percentage of enterprise value (1)
22 34 
Adjusted funds flow from operations (1) (2)
1,959.5 1,476.9 
Net debt to adjusted funds flow from operations (1) (3)
0.7 1.4 
(1)Specified financial measure that does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
(2)The sum of adjusted funds flow from operations for the trailing four quarters.
(3)The net debt reflects the financing of acquisitions, however, the adjusted funds flow from operations only reflects adjusted funds flow from operations generated from the acquired properties since the closing date of the acquisitions.
At June 30, 2022, Crescent Point's enterprise value was $6.66 billion and the Company was capitalized with 78 percent equity compared to $5.92 billion and 66 percent at December 31, 2021, respectively. The Company's net debt to adjusted funds flow from operations ratio at June 30, 2022 decreased to 0.7 times from 1.4 times at December 31, 2021. The decrease was largely due to higher adjusted funds flow from operations, primarily as a result of the increase in the Cdn$ WTI benchmark price, and reduction in net debt as a result of excess cash flow generated in the first half of 2022.
Crescent Point's market capitalization increased to $5.19 billion at June 30, 2022, from $3.91 billion at December 31, 2021, primarily due to the increase in the Company's share price.
Exhibit 20
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(1)The sum of adjusted funds flow from operations for the trailing four quarters.
(2)The net debt reflects the financing of acquisitions, however, the adjusted funds flow from operations only reflects adjusted funds flow from operations generated from the acquired properties since the closing date of the acquisitions.
The Company has combined revolving credit facilities of $2.30 billion, including a $2.20 billion syndicated unsecured credit facility with eleven banks and a $100.0 million unsecured operating credit facility with one Canadian chartered bank. The current maturity date of the facilities is November 26, 2025. As at June 30, 2022, the Company had approximately $186.2 million drawn on bank credit facilities, including $2.6 million outstanding pursuant to letters of credit.
At June 30, 2022, the Company has senior guaranteed notes of US$921.0 million and Cdn$195.0 million outstanding. The notes are unsecured and rank pari passu with the Company's bank credit facilities and carry a bullet repayment on maturity. Crescent Point entered into various CCS and foreign exchange swaps to hedge its foreign exchange exposure on its US dollar long-term debt. During the three months ended June 30, 2022, the Company repaid senior guaranteed note maturities of US$200.0 million and Cdn$25.0 million.
CRESCENT POINT ENERGY CORP.
16

The Company is in compliance with all debt covenants at June 30, 2022 which are listed in the table below:
Covenant Description
Maximum Ratio
June 30, 2022
Senior debt to adjusted EBITDA (1) (2)
3.50.74
Total debt to adjusted EBITDA (1) (3)
4.00.74
Senior debt to capital (2) (4)
0.550.18
(1)Adjusted EBITDA is calculated as earnings before interest, taxes, depletion, depreciation, amortization, impairment and impairment reversals, adjusted for certain non-cash items. Adjusted EBITDA is calculated on a trailing twelve month basis adjusted for material acquisitions and dispositions.
(2)Senior debt is calculated as the sum of amounts drawn on the combined facilities, outstanding letters of credit and the principal amount of the senior guaranteed notes.
(3)Total debt is calculated as the sum of senior debt plus subordinated debt. Crescent Point does not have any subordinated debt.
(4)Capital is calculated as the sum of senior debt and shareholders' equity and excludes the effect of unrealized derivative gains or losses and the adoption of IFRS 16.
The Company's working capital deficiency and ongoing working capital requirements are expected to be financed through cash, adjusted funds flow from operations and its bank credit facilities. Given these sources of financing, the Company is able to adequately address its working capital deficiency.
Shareholders' Equity
At June 30, 2022, Crescent Point had 567.4 million common shares issued and outstanding compared to 579.5 million common shares at December 31, 2021. The decrease of 12.1 million shares is due to shares purchased and cancelled under the Normal Course Issuer Bid ("NCIB"), partially offset by shares issued pursuant to the Restricted Share Bonus Plan and stock options exercised pursuant to the Stock Option Plan.
As of the date of this report, the Company had 567,506,041 common shares outstanding.
Normal Course Issuer Bid     
On March 4, 2022, the Company announced the acceptance by the Toronto Stock Exchange of its notice to implement an NCIB. The NCIB allows the Company to purchase, for cancellation, up to 57,309,975 common shares, or 10 percent of the Company's public float, as at February 28, 2022. The NCIB commenced on March 9, 2022 and is due to expire on March 8, 2023.
In the first half of 2022, the Company purchased and cancelled 14.6 million common shares for a total consideration of $132.6 million. The total cost paid, including commissions and fees, was recognized directly as a reduction in shareholders' equity. Under the NCIB, all common shares purchased are cancelled.
Subsequent Events
Saskatchewan Viking Disposition
On July 6, 2022, Crescent Point completed the sale of its non-core Saskatchewan Viking assets. Including closing adjustments, total consideration was approximately $244.1 million.
Critical Accounting Estimates
There have been no changes in Crescent Point's critical accounting estimates in the period ended June 30, 2022. Further information on the Company's critical accounting policies and estimates can be found in the notes to the annual consolidated financial statements and MD&A for the year ended December 31, 2021.
CRESCENT POINT ENERGY CORP.
17

Summary of Quarterly Results
202220212020
($ millions, except per share amounts)Q2Q1Q4Q3Q2Q1Q4Q3
Oil and gas sales1,286.5 1,092.7 900.4 826.7 849.2 630.2 447.8 437.0 
Average daily production
Crude oil and condensate (bbls/d)91,250 92,971 88,544 92,206 107,444 95,276 87,512 89,260 
NGLs (bbls/d)16,139 17,039 20,884 18,176 18,608 13,319 13,033 13,458 
Natural gas (mcf/d)130,724 136,667 125,871 130,823 135,531 64,732 64,033 63,988 
Total (boe/d)129,176 132,788 130,407 132,186 148,641 119,384 111,217 113,383 
Net income (loss)
331.5 1,183.6 121.6 77.5 2,143.3 21.7 (51.2)0.5 
Net income (loss) per share0.58 2.05 0.21 0.13 3.68 0.04 (0.10)— 
Net income (loss) per share – diluted0.58 2.03 0.21 0.13 3.65 0.04 (0.10)— 
Adjusted net earnings from operations (1)
272.1 240.9 160.0 142.6 117.6 95.1 85.6 71.0 
Adjusted net earnings from operations
per share (1)
0.48 0.42 0.27 0.25 0.20 0.18 0.16 0.13 
Adjusted net earnings from operations
per share – diluted (1)
0.47 0.41 0.27 0.24 0.20 0.18 0.16 0.13 
Cash flow from operating activities529.6 426.1 492.4 414.2 285.5 303.7 245.1 219.5 
Adjusted funds flow from operations (1)
599.1 534.0 432.5 393.9 387.8 262.7 220.2 235.7 
Adjusted working capital deficiency (1)
(40.9)(91.8)(201.6)(108.8)(16.1)(55.9)(93.4)(65.5)
Total assets 10,279.4 10,412.5 9,171.2 9,231.5 9,283.4 6,610.7 6,645.9 6,864.2 
Total liabilities 3,501.3 3,901.2 3,765.9 3,897.4 4,044.4 3,777.5 3,823.1 3,952.3 
Net debt (1)
1,467.9 1,775.2 2,005.0 2,138.8 2,324.2 2,013.4 2,149.2 2,189.2 
Weighted average shares – diluted (millions)575.9 582.7 587.7 587.1 587.8 536.6 534.4 532.9 
Capital acquisitions0.3 0.9 5.2 0.9 936.3 — — — 
Capital dispositions(37.8)(2.9)(0.1)(3.8)(87.9)(7.2)1.1 (0.9)
Development capital expenditures 196.9 204.3 229.5 187.1 88.4 119.2 169.4 93.3 
Dividends declared37.1 (0.2)26.0 19.0 1.5 1.3 1.4 1.3 
Dividends declared per share0.0650 — 0.0450 0.0325 0.0025 0.0025 0.0025 0.0025 
(1)Specified financial measure that does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
Over the past eight quarters, the Company's oil and gas sales have fluctuated due to volatility in the Cdn$ WTI benchmark price, changes in production and fluctuations in corporate oil price differentials. The Company's production has fluctuated due to changes in its development capital spending levels, acquisitions and dispositions, voluntary shut-ins and natural declines.
Net income (loss) has fluctuated over the past eight quarters primarily due to changes in PP&E impairment charges and reversals, changes in adjusted funds flow from operations, unrealized derivative gains and losses, which fluctuate with changes in forward market prices and foreign exchange rates, gains and losses on capital dispositions, and fluctuations in deferred tax expense.
Adjusted net earnings from operations has fluctuated over the past eight quarters, primarily due to changes in adjusted funds flow from operations, depletion and share-based compensation expense along with associated fluctuations in deferred tax expense.
Capital expenditures have also fluctuated throughout this period due to the timing of acquisitions, dispositions and changes in the Company's development capital spending levels which vary based on a number of factors, including the prevailing commodity price environment.
CRESCENT POINT ENERGY CORP.
18

Internal Control Update
Crescent Point is required to comply with Multilateral Instrument 52-109 Certification of Disclosure on Issuers' Annual and Interim Filings. The certificate requires that Crescent Point disclose in the interim MD&A any weaknesses or changes in Crescent Point's internal control over financial reporting that occurred during the period that have materially affected, or are reasonably likely to materially affect Crescent Point's internal controls over financial reporting. Crescent Point confirms that no such weaknesses or changes were identified in the Company's internal controls over financial reporting during the second quarter of 2022.
Guidance
Crescent Point's guidance for 2022 is as follows:
Prior (1)
Revised (2)
Total Annual Average Production (boe/d) (3)
133,000 - 137,000130,000 - 134,000
Capital Expenditures
Development capital expenditures ($ millions)$875 - $900$875 - $900
Capitalized G&A ($ millions)$40$40
Total ($ millions) (4)
$915 - $940$915 - $940
Other Information for 2022 Guidance
Reclamation activities ($ millions) (5)
$20$20
Capital lease payments ($ millions)$20$20
Annual operating expenses ($/boe)$13.75 - $14.25$13.75 - $14.25
Royalties 13.5% - 14.0%13.5% - 14.0%
(1)Prior guidance published in the Company's May 12, 2022 press release.
(2)Revised guidance published in the Company's July 6, 2022 press release.
(3)Total annual average production (boe/d) is comprised of approximately 80% Oil, Condensate & NGLs and 20% Natural Gas.
(4)Land expenditures and net property acquisitions and dispositions are not included. Development capital expenditures spend is allocated on an approximate basis as follows: 85% drilling & development and 15% facilities & seismic.
(5)Reflects Crescent Point's portion of its expected total budget.
Return of Capital Outlook
Base Dividend
Current quarterly base dividend per share$0.08
Additional Return of Capital
% of discretionary excess cash flow (1) (2)
50%
(1)Discretionary excess cash flow is calculated as excess cash flow less base dividends. Specified financial measure that does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this MD&A for further information.
(2)Additional return of capital % to begin in third quarter 2022. This % is part of a framework that targets to return up to 50% of discretionary excess cash flow to shareholders.
Additional information relating to Crescent Point, including the Company's December 31, 2021 Annual Information Form, which along with other relevant documents are available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.

CRESCENT POINT ENERGY CORP.
19

Specified Financial Measures
Throughout this MD&A, the Company uses the terms “total operating netback”, “total netback”, "operating netback", "netback", “adjusted funds flow from operations”, "excess cash flow", "discretionary excess cash flow", "adjusted working capital deficiency", “net debt”, “enterprise value”, “net debt to adjusted funds flow from operations”, "net debt as a percentage of enterprise value", “adjusted net earnings from operations”, “adjusted net earnings from operations per share” and “adjusted net earnings from operations per share - diluted”. These terms do not have any standardized meaning as prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other issuers.
Total operating netback and total netback are historical non-GAAP financial measures. Total operating netback is calculated as oil and gas sales, less royalties, operating and transportation expenses. Total netback is calculated as total operating netback plus realized commodity derivative gains and losses. Total operating netback and total netback are common metrics used in the oil and gas industry and are used to measure operating results to better analyze performance against prior periods on a comparable basis. The most directly comparable financial measure to total operating netback and total netback is oil and gas sales.
The following table reconciles oil and gas sales to total operating netback and total netback:
Three months ended June 30Six months ended June 30
($ millions)
20222021% Change20222021% Change
Oil and gas sales1,286.5 849.2 51 2,379.2 1,479.4 61 
Royalties
(172.7)(106.8)62 (319.1)(192.5)66 
Operating expenses
(180.5)(170.8)6 (349.2)(313.4)11 
Transportation expenses
(33.2)(32.2)3 (65.8)(57.3)15 
Total operating netback900.1 539.4 67 1,645.1 916.2 80 
Realized loss on commodity derivatives(260.6)(97.7)167 (426.0)(157.4)171 
Total netback639.5 441.7 45 1,219.1 758.8 61 
Operating netback and netback are non-GAAP ratios and are calculated as total operating netback and total netback, respectively, divided by total production. Operating netback and netback are common metrics used in the oil and gas industry and are used to measure operating results on a per boe basis.
Adjusted funds flow from operations is a capital management measure and is calculated based on cash flow from operating activities before changes in non-cash working capital, transaction costs and decommissioning expenditures funded by the Company. Transaction costs are excluded as they vary based on the Company's acquisition and disposition activity and to ensure that this metric is more comparable between periods. Decommissioning expenditures are discretionary and are excluded as they may vary based on the stage of the Company's assets and operating areas. The most directly comparable financial measure to adjusted funds flow from operations is cash flow from operating activities. Adjusted funds flow from operations is a key measure that assesses the ability of the Company to finance dividends, operating activities, capital expenditures and debt repayments. Adjusted funds flow from operations as presented is not intended to represent cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. See Note 12 – "Capital Management" in the unaudited consolidated financial statements for the period ended June 30, 2022 for additional information on the Company's capital management.
Excess cash flow is a historical non-GAAP financial measure and is defined as adjusted funds flow from operations less capital expenditures, payments on lease liability, decommissioning expenditures funded by the Company and other items (excluding net acquisitions and dispositions). The most directly comparable financial measure to excess cash flow disclosed in the Company's financial statements is cash flow from operating activities. Excess cash flow is a key measure that assesses the ability of the Company to finance dividends, potential share repurchases, debt repayments and returns-based growth. The Company has previously presented excess cash flow as net of dividends. To provide a more comparable definition of excess cash flow to other issuers, excess cash flow is now presented prior to dividends.
Discretionary excess cash flow is a historical non-GAAP financial measure and is defined as excess cash flow less base dividends. The most directly comparable financial measure to discretionary excess cash flow disclosed in the Company's financial statements is cash flow from operating activities. Discretionary excess cash flow is a key measure that assesses the funds available for reinvestment in the Company’s business or for return of capital to shareholders beyond the base dividend.
CRESCENT POINT ENERGY CORP.
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The following table reconciles cash flow from operating activities to adjusted funds flow from operations, excess cash flow and discretionary excess cash flow:
Three months ended June 30Six months ended June 30
($ millions)
2022
2021 (1)
% Change2022
2021 (1)
% Change
Cash flow from operating activities
529.6 285.5 85 955.7 589.2 62 
Changes in non-cash working capital
64.7 88.4 (27)166.1 41.2 303 
Transaction costs
0.3 11.7 (97)0.4 11.8 (97)
Decommissioning expenditures (2)
4.5 2.2 105 10.9 8.3 31 
Adjusted funds flow from operations
599.1 387.8 54 1,133.1 650.5 74 
Capital expenditures(211.5)(100.7)110 (438.3)(235.1)86 
Payments on lease liability(5.1)(5.1)— (10.2)(10.2)— 
Decommissioning expenditures(4.5)(2.2)105 (10.9)(8.3)31 
Other items (3)
(0.2)(5.2)(96)(6.6)7.6 (187)
Excess cash flow377.8 274.6 38 667.1 404.5 65 
Dividends(37.1)(1.5)2,373 (36.9)(2.8)1,218 
Discretionary excess cash flow340.7 273.1 25 630.2 401.7 57 
(1)Comparative period revised to reflect current period presentation.
(2)Excludes amounts received from government subsidy programs.
(3)Other items include, but are not limited to, unrealized gains and losses on equity derivative contracts and transaction costs. Other items exclude net acquisitions and dispositions.    
Adjusted working capital deficiency is a capital management measure and is calculated as accounts payable and accrued liabilities, dividends payable and long-term compensation liability net of equity derivative contracts, less cash, accounts receivable, prepaids and deposits, including deposit on acquisition and long-term investments. Adjusted working capital deficiency is a component of net debt and is a measure of the Company's liquidity.
The following table reconciles adjusted working capital deficiency:
($ millions)
June 30, 2022December 31, 2021
% Change
Accounts payable and accrued liabilities
525.9 450.7 17 
Dividends payable
37.0 43.5 (15)
Long-term compensation liability (1)
41.2 42.6 (3)
Cash
(15.9)(13.5)18 
Accounts receivable
(532.8)(314.3)70 
Prepaids and deposits(14.5)(7.4)96 
Adjusted working capital deficiency40.9 201.6 (80)
(1)Includes current portion of long-term compensation liability and is net of equity derivative contracts.
Net debt is a capital management measure and is calculated as long-term debt plus adjusted working capital deficiency, excluding the unrealized foreign exchange on translation of US dollar long-term debt. The most directly comparable financial measure to net debt disclosed in the Company's financial statements is long-term debt. Net debt is a key measure of the Company's liquidity.
The following table reconciles long-term debt to net debt:
($ millions)
June 30, 2022December 31, 2021
% Change
Long-term debt (1)
1,560.7 1,970.2 (21)
Adjusted working capital deficiency40.9 201.6 (80)
Unrealized foreign exchange on translation of US dollar long-term debt(133.7)(166.8)(20)
Net debt
1,467.9 2,005.0 (27)
(1)Includes current portion of long-term debt.
Enterprise value is a supplementary financial measure and is calculated as market capitalization plus net debt. Enterprise value is used to assess the valuation of the Company. Refer to the Liquidity and Capital Resources section in this MD&A for further information.
Net debt to adjusted funds flow from operations is a capital management measure and is calculated as the period end net debt divided by the sum of adjusted funds flow from operations for the trailing four quarters. Net debt as a percentage of enterprise value is a supplementary financial measure and is calculated as net debt divided by enterprise value. The measures of net debt to adjusted funds flow from operations and net debt as a percentage of enterprise value are used to measure the Company's overall debt position and to measure the strength of the Company's balance sheet. Crescent Point monitors these measures and uses them as key measures in making decisions regarding financing, capital spending and dividend levels.
CRESCENT POINT ENERGY CORP.
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Adjusted net earnings from operations is a historical non-GAAP financial measure and is calculated based on net income before amortization of E&E undeveloped land, impairment or impairment reversals, unrealized derivative gains or losses, unrealized foreign exchange gain or loss on translation of hedged US dollar long-term debt, unrealized gains or losses on long-term investments, gains or losses on the sale of long-term investments, gains or losses on capital acquisitions and dispositions and deferred tax related to these adjustments. Adjusted net earnings from operations is a key measure of financial performance that is more comparable between periods. The most directly comparable financial measure to adjusted net earnings from operations disclosed in the Company's financial statements is net income.
The following table reconciles net income to adjusted net earnings from operations:
Three months ended June 30Six months ended June 30
($ millions)
20222021
% Change
20222021
% Change
Net income331.5 2,143.3 (85)1,515.1 2,165.0 (30)
Amortization of E&E undeveloped land
4.6 13.3 (65)11.2 27.1 (59)
Impairment reversal— (2,514.4)(100)(1,484.9)(2,514.4)(41)
Unrealized derivative (gains) losses(81.0)143.6 (156)232.2 225.3 3 
Unrealized foreign exchange gain on translation of hedged US dollar long-term debt(13.8)(37.9)(64)(33.1)(49.8)(34)
Unrealized gain on long-term investments— (3.9)(100)— (6.1)(100)
Net (gain) loss on capital dispositions0.1 (73.8)(100)(2.8)(56.5)(95)
Deferred tax adjustments30.7 447.4 (93)275.3 422.1 (35)
Adjusted net earnings from operations272.1 117.6 131 513.0 212.7 141 
Adjusted net earnings from operations per share and adjusted net earnings from operations per share - diluted are non-GAAP ratios and are calculated as adjusted net earnings from operations divided by the number of weighted average basic and diluted shares outstanding, respectively. Adjusted net earnings from operations presents a measure of financial performance that is more comparable between periods. Adjusted net earnings from operations as presented is not intended to represent net earnings or other measures of financial performance calculated in accordance with IFRS.
Management believes the presentation of the specified financial measures above provide useful information to investors and shareholders as the measures provide increased transparency and the ability to better analyze performance against prior periods on a comparable basis.
CRESCENT POINT ENERGY CORP.
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Forward-Looking Information
Certain statements contained in this management's discussion and analysis constitute forward-looking statements and are based on Crescent Point's beliefs and assumptions based on information available at the time the assumption was made. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements are effective only as of the date of this report. Crescent Point undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so pursuant to applicable law.
Any “financial outlook” or “future oriented financial information” in this management’s discussion and analysis, as defined by applicable securities legislation, has been approved by management of Crescent Point. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
Certain statements contained in this MD&A, including statements related to Crescent Point's capital expenditures, projected asset growth, view and outlook toward future commodity prices, drilling activity and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may", “projected”, “sustain”, “continues”, “strategy”, “potential”, “projects”, “grow”, “take advantage”, “estimate” and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. The material assumptions and factors in making these forward-looking statements are disclosed in this MD&A under the headings "Overview", "Commodity Derivatives", “Liquidity and Capital Resources” and “Guidance”.
In particular, forward-looking statements include:
l Continued focus on enhancing excess cash flow generation and expectations of further balance sheet strengthening through the remainder of 2022 in the current commodity price environment;
l Return of capital framework, targeting the return of up to 50 percent of discretionary excess cash flow, and under which the majority of excess cash flow can be returned to shareholders;
l Crescent Point's approach to proactively manage the risk exposure inherent in movements in the price of crude oil, propane, natural gas, the Company's share price, the US/Cdn dollar exchange rate and interest rates through the use of derivatives with investment-grade counterparties;
l Crescent Point's use of derivatives to reduce the volatility of the selling price of its crude oil and natural gas production and how this provides a measure of stability to cash flow;
l The extent and effectiveness of hedges;


l Higher forecast commodity prices used to estimate useable tax pools;
l Crescent Point's 2022 production and capital expenditures guidance;
l Crescent Point's return of capital outlook including dividend expectations and additional return of capital target as a percentage of discretionary excess cash flow;
l The Company's liquidity and financial flexibility;
l NCIB expectations;
l Estimated undiscounted and uninflated cash flows to settle decommissioning liability; and
l The Company evaluating returns to shareholders as market conditions permit in the context of its capital allocation framework, leverage targets and adjusted funds flow generation.

This information contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, many of which are beyond Crescent Point's control. Such risks and uncertainties include, but are not limited to: financial risk of marketing reserves at an acceptable price given market conditions; volatility in market prices for oil and natural gas, decisions or actions of OPEC and non-OPEC countries in respect of supplies of oil and gas; delays in business operations or delivery of services due to pipeline restrictions, rail blockades, outbreaks, blowouts and business closures and social distancing measures mandated by public health authorities in response to COVID-19, including current and new variants thereof; the risk of carrying out operations with minimal environmental impact; industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; uncertainties associated with estimating oil and natural gas reserves; risks and uncertainties related to oil and gas interests and operations on Indigenous lands; economic risk of finding and producing reserves at a reasonable cost; uncertainties associated with partner plans and approvals; operational matters related to non-operated properties; increased competition for, among other things, capital, acquisitions of reserves and undeveloped lands; competition for and availability of qualified personnel or management; incorrect assessments of the value and likelihood of acquisitions and dispositions, and exploration and development programs; unexpected geological, technical, drilling, construction, processing and transportation problems; the impact of severe weather events; availability of insurance; fluctuations in foreign exchange and interest rates; stock market volatility; general economic, market and business conditions, including uncertainty in the demand for oil and gas and economic activity in general as a result of the COVID-19 pandemic; changes in interest rates and inflation; uncertainties associated with regulatory approvals; geopolitical conflicts, including the Russian invasion of Ukraine; uncertainty of government policy changes; the impact of the implementation of the Canada-United States-Mexico Agreement; uncertainty regarding the benefits and costs of dispositions; failure to complete acquisitions and dispositions; uncertainties associated with credit facilities and counterparty credit risk; changes in income tax laws, tax laws, crown royalty rates and incentive programs relating to the oil and gas industry; the wide-ranging impacts of the COVID-19 pandemic, including on demand, health and supply chain; and other factors, many of which are outside the control of the Company.
CRESCENT POINT ENERGY CORP.
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Therefore, Crescent Point's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and if such actual results, performance or achievements transpire or occur, or if any of them do so, there can be no certainty as to what benefits or detriments Crescent Point will derive therefrom.
Crude oil and condensate, and natural gas information is provided in accordance with the United States Financial Accounting Standards Board ("FASB") Topic 932 - "Extractive Activities - Oil and Gas" and where applicable, financial information is prepared in accordance with International Financial Reporting Standards ("IFRS").
The Company files its reserves information under National Instrument 51-101 - "Standards of Disclosure of Oil and Gas Activities" (NI 51-101), which prescribes the standards for the preparation and disclosure of reserves and related information for companies listed in Canada.
There are significant differences to the type of volumes disclosed and the basis from which the volumes are economically determined under the United States Securities and Exchange Commission (“SEC”) requirements and NI 51-101. The SEC requires disclosure of net reserves, after royalties, using 12-month average prices and current costs; whereas NI 51-101 requires Company gross reserves, before royalties, using forecast pricing and costs. Therefore the difference between the reported numbers under the two disclosure standards may be material.
Barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil and condensate as compared to natural gas is significantly different from the energy equivalency of oil, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. Oil and gas metrics such as operating netback and netback do not have standardized meaning and as such may not be reliable, and should not be used to make comparisons.
NI 51-101 includes condensate within the natural gas liquids (NGLs) product type. The Company has disclosed condensate as combined with crude oil and separately from other natural gas liquids in this MD&A since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this crude oil and condensate presentation provides a more accurate description of its operations and results therefrom.
The Company’s aggregate average production for the three and six months ended June 30, 2022 and June 30, 2021 and the references to “natural gas”, “crude oil" and "condensate”, reported in this MD&A consist of the following product types, as defined in NI 51-101 and using a conversion ratio of 6 mcf : 1 bbl where applicable:
Three months ended June 30Six months ended June 30
2022202120222021
Light & Medium Crude Oil (bbl/d)15,752 20,181 15,559 20,482 
Heavy Crude Oil (bbl/d)4,103 4,269 4,069 4,193 
Tight Oil (bbl/d)53,521 65,595 54,672 67,972 
Total Crude Oil (bbl/d)73,376 90,045 74,300 92,647 
NGLs (bbl/d)34,013 36,007 34,392 24,725 
Shale Gas (mcf/d)119,924 125,830 123,254 89,618 
Conventional Natural Gas (mcf/d)10,800 9,701 10,425 10,709 
Total Natural Gas (mcf/d)130,724 135,531 133,679 100,327 
Total (boe/d)129,176 148,641 130,972 134,093 
CRESCENT POINT ENERGY CORP.
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The Company’s aggregate production for the past eight quarters and the references to “natural gas”, “crude oil" and "condensate”, reported in this MD&A consist of the following product types, as defined in NI 51-101 and using a conversion ratio of 6 mcf : 1 bbl where applicable:
202220212020
Q2Q1Q4Q3Q2Q1Q4Q3
Light & Medium Crude Oil (bbl/d) 15,752 15,365 15,517 15,046 20,181 20,699 21,025 18,846 
Heavy Crude Oil (bbl/d) 4,103 4,034 4,226 4,199 4,269 4,118 4,276 4,223 
Tight Oil (bbl/d)53,521 55,837 55,965 58,233 65,595 70,459 62,211 66,191 
Total Crude Oil (bbl/d)73,376 75,236 75,708 77,478 90,045 95,276 87,512 89,260 
NGLs (bbl/d) 34,013 34,774 33,720 32,904 36,007 13,319 13,033 13,458 
Shale Gas (mcf/d) 119,924 126,622 115,482 117,339 125,830 53,198 52,370 50,776 
Conventional Natural Gas (mcf/d)10,800 10,045 10,389 13,484 9,701 11,534 11,663 13,212 
Total Natural Gas (mcf/d) 130,724 136,667 125,871 130,823 135,531 64,732 64,033 63,988 
Total (boe/d)129,176 132,788 130,407 132,186 148,641 119,384 111,217 113,383 
CRESCENT POINT ENERGY CORP.
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Directors
Barbara Munroe, Chair (6)
James Craddock (2) (3) (5)
John Dielwart (3) (4)
Ted Goldthorpe (1) (5)
Mike Jackson (1) (5)
Jennifer Koury (2) (5)
Francois Langlois (1) (3) (4)
Myron Stadnyk (2) (3) (4)
Mindy Wight (1) (2)
Craig Bryksa (4)
(1) Member of the Audit Committee of the Board of Directors
(2) Member of the Human Resources and Compensation Committee of the Board of Directors
(3) Member of the Reserves Committee of the Board of Directors
(4) Member of the Environment, Safety and Sustainability Committee of the Board of Directors
(5) Member of the Corporate Governance and Nominating Committee
(6) Chair of the Board serves in an ex officio capacity on each Committee
Officers
Craig Bryksa
President and Chief Executive Officer
Ken Lamont
Chief Financial Officer
Ryan Gritzfeldt
Chief Operating Officer
Mark Eade
Senior Vice President, General Counsel and Corporate Secretary
Garret Holt
Senior Vice President, Corporate Development
Michael Politeski
Vice President, Finance and Treasurer
Shelly Witwer
Vice President, Business Development
Head Office
Suite 2000, 585 - 8th Avenue S.W.
Calgary, Alberta T2P 1G1
Tel: (403) 693-0020
Fax: (403) 693-0070
Toll Free: (888) 693-0020
Banker
The Bank of Nova Scotia
Calgary, Alberta
Auditor
PricewaterhouseCoopers LLP
Calgary, Alberta
Legal Counsel
Norton Rose Fulbright Canada LLP
Calgary, Alberta
Evaluation Engineers
McDaniel & Associates Consultants Ltd.
Calgary, Alberta
Registrar and Transfer Agent
Investors are encouraged to contact Crescent Point's Registrar and Transfer Agent for information regarding their security holdings:
Computershare Trust Company of Canada
600, 530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Tel: (403) 267-6800
Stock Exchanges
Toronto Stock Exchange - TSX
New York Stock Exchange - NYSE
Stock Symbol
CPG
Investor Contacts
Shant Madian
Vice President, Capital Markets
(403) 693-0020

Sarfraz Somani
Manager, Investor Relations
(403) 693-0020

CRESCENT POINT ENERGY CORP.
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