Friday, October 26, 2007

Royalties- What Changes Are In Store?

Ed Stelmach's proposal includes:


*Introduce price-sensitive formulas before and after capital costs are paid out. The payments will slide between 1 percent and 9 percent of revenues with increases starting at an oil price of $55 a barrel and a cap set at $120 a barrel. Post-payout, royalties will be 25 to 40 percent of net profits.


*Gas royalties will be set on a formula using price and production volume. New royalty rates will range from 5 percent to 50 percent with rate caps at C$17.50 per million British thermal units.

*Royalties for natural gas liquids will be set at 40 percent for pentanes and 30 percent for butanes and propane.


*Royalties will be linked to well production and price with the government's take rising as high as 50 percent. Rates to be capped if the oil price hits $120 per barrel.

Source: Government of Alberta

Read Factbox Uk Reuters Article Here

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