Ultra-marginal Well Royalty Reduction
Shallow gas well events that meet stringent low productivity and depth requirements, qualify for the ultramarginal well reduction.
If the well event qualifies for the reduction, a lower royalty rate is automatically used to calculate your royalties when the average daily rate of production in a calendar month is less than 60,000 cubic metres.
Offered by Ministry of Energy and Climate Solutions
Amount
No fixed amount
Quick eligibility check
Who can apply
Effective September 1, 2022, new gas wells with a spud date on or after September 1, 2022, do not qualify for the low productivity, marginal or ultramarginal royalty reduction programs.
Shallow gas well events that meet stringent low productivity and depth requirements, qualify for the ultramarginal well reduction.
Well events must produce for 12 months before they qualify for this reduction. After the 12-month qualification period, the royalty on a qualifying well event for the previous 12 months will be recalculated.
Only one production based royalty reduction can be applied to the same well event.
Note:
This program is only available to wells with a spud date before September 1, 2022.
About the funding
If the well event qualifies for the reduction, a lower royalty rate is automatically used to calculate your royalties when the average daily rate of production in a calendar month is less than 60,000 cubic metres.
Well events must produce for 12 months before they qualify for this reduction. After the 12-month qualification period, the royalty on a qualifying well event for the previous 12 months will be recalculated. Only one production based royalty reduction can be applied to the same well event.
Similar programs
| Program | Type | Amount | Status |
|---|---|---|---|
| Deep-Well Royalty Program | Royalty | Royalty credits covering a portion of drilling and completion costs: Tier 1 deep wells from a minimum of $440,000 (for a well with a deep-well depth of 2,500 metres) to a maximum of $2.81 million (for wells 5,500 metres or deeper) | Open |
| Low Productivity Well Royalty Reduction | Royalty | No fixed amount | Open |
| Royalty Program for Marginal Gas Wells | Royalty | No fixed amount | Open |
