The following discussion should be read in conjunction with the Company's Condensed Consolidated Financial Statements, and respective notes thereto, included elsewhere herein. The information below should not be construed to imply that the results discussed herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of the management of FieldPoint Petroleum Corporation.

General

FieldPoint Petroleum Corporation derives its revenues from its operating activities including sales of oil and natural gas and operating oil and natural gas properties. The Company's capital for investment in producing oil and natural gas properties has been provided by cash flow from operating activities and bank financing. The Company categorizes its operating expenses into the categories of production expenses and other expenses.

Comparison of the Three Months Ended September 30, 2008 to the Three Months Ended September 30, 2007

Results of Operations

Total revenues increased 78% or $853,347 to $1,953,732 for the three-month period ended September 30, 2008 from the comparable 2007 period. This was due primarily to the overall increase in oil and natural gas sales. Production volumes increased 17% on a BOE basis due to acquisitions during the fourth quarter 2007 and 2008. Average oil sales prices increased 55% to $111.33 for the three-month period ended September 30, 2008 compared to $72.05 for the three-month period ended September 30, 2007. Average natural gas sales prices increased 44% to $10.22 for the three-month period ended September 30, 2008 compared to $7.11 for the three-month period ended September 30, 2007.

                                       Quarter Ended       %
                                       September 30,
                                       2008      2007    Change
Oil sales volumes (Bbls)                14,320    11,456    25%
Average sales price per Bbl ($/Bbl) $   111.33 $   72.05    55%

Natural gas sales volumes (Mcf)         32,468    32,769     1%
Average sales price per Mcf ($/Mcf) $    10.22 $    7.11    44%
Production (BOE)                        19,731    16,918    17%
Lifting cost per BOE                $    31.39 $   22.09    42%

Production expenses increased 66% or $245,598 to $619,400 for the three-month period ended September 30, 2008 from the comparable 2007 period. This was primarily due to the increase in new wells acquired and cost associated with workovers in the form of remedial repairs in the 2008 period. Depletion and depreciation increased 41% or $83,000 to $286,000 for the three-month period ended September 30, 2008 versus the comparable 2007 period. This was primarily due to the addition of oil

General and administrative expense increased 26% or $42,170 to $203,831 for the three-month period ended September 30, 2008 from the three-month period ended September 30, 2007. This was primarily due to an overall increase in administrative expenses, salaries and fees in the 2008 period.

Interest expense increased $8,051 to $42,354 for the three month period ended September 30, 2008 from $34,303 for the comparable 2007 period due to $3,489,125 in bank financing outstanding in the 2008 period compared with $1,989,125 in bank financing outstanding in the 2007 period.

Comparison of the Nine Months Ended September 30, 2008 to the Nine Months Ended September 30, 2007

Results of Operations

Total revenues increased 82% or $2,466,088 to $5,463,046 for the nine-month period ended September 30, 2008 from $2,996,958 for the comparable 2007 period, primarily due to the overall increase in oil and natural gas sales prices.
Production volumes on a BOE basis increased 11% due to acquisitions during the fourth quarter 2007 and 2008. Average oil sales prices increased 67% to $108.26 for the nine month period ended September 30, 2008 compared to $64.82 for the nine-month period ended September 30, 2007. Average natural gas sales prices increased 45% to $8.67 for the nine-month period ended September 30, 2008 compared to $5.99 for the nine-month period ended September 30, 2007.

                                     Nine Months Ended     %
                                       September 30,
                                          2008      2007 Change
Oil sales volumes (Bbls)                41,702    34,253    22%
Average sales price per Bbl ($/Bbl) $   108.26 $   64.82    67%

Natural gas sales volumes (Mcf)         97,593   108,218  (10)%
Average sales price per Mcf ($/Mcf) $     8.67 $    5.99    45%
Production (BOE)                        57,968    52,289    11%
Lifting cost per BOE                $    28.65 $   20.50    40%

Production expenses increased 55% or $588,628 to $1,660,699 for the nine-month period ended September 30, 2008 from the comparable 2007 period. This was primarily due to the increase in new wells and cost associated with workovers and remedial repairs for the period ended September 30, 2008. Depletion and depreciation expense increased 31% to $831,000, compared to $632,000 for the comparable 2007 period. This was primarily due to the addition of the Apache Bromide and Sulimar properties we acquired in 2007. As a result of additional wells and workovers, lifting costs per BOE increased 40% or $8.15 to $28.65 for the nine months ended September 30, 2008.

General and administrative expense increased 8% or $38,614 to $493,689 for the nine-month period ended September 30, 2008 from the nine-month period ended September 30, 2007. This was attributable primarily to an overall increase in administrative expenses, salaries and fees in the 2008 period slightly offset by the collection of a reserved joint interest billing receivable and reversal of the associated allowance of $44,624.

Liquidity and Capital Resources

Cash flow provided by operating activities was $2,528,580 for the nine-month period ended September 30, 2008, as compared to cash flow provided by operating activities of $1,439,426 in the comparable 2007 period. The increase in cash from operating activities was primarily due to an increase in net income for the period.

Cash flow used in investing activities was $1,806,392 for the nine-month period ended September 30, 2008 as compared to $2,086,440 used in investing activities for the comparable period ended September 30, 2007. This was primarily due to the increase in acquisition of oil and natural gas properties in 2007.

Cash flow provided by financing activities for the nine months ended September 30, 2007, resulted primarily from bank financing and the exercise of stock options and the related income tax effects. There were no financing activities during the nine months ended September 30, 2008, as we had no outstanding exercisable stock options during the period, nor did we require additional borrowings under our revolving credit arrangement.

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