fiscal regimes applied to natural gas production
DESCRIPTION
Top strip. FISCAL REGIMES APPLIED TO NATURAL GAS PRODUCTION ADMINISTERED BY INDUSTRY AND RESOURCES CROWN ROYALTY FREEHOLD PRODUCTION TAX ADMINISTERED BY FINANCE CORPORATION CAPITAL TAX SURCHARGE. Top strip. SASKATCHEWAN’S NATURAL GAS. CROWN ROYALTY REGIME. - PowerPoint PPT PresentationTRANSCRIPT
www.ir.gov.sk.cawww.ir.gov.sk.ca
SASKATCHEWAN NATURAL GAS ROYALTY REGIME
DALE FLETCHER
DIRECTOR, PETROLEUM ROYALTIES BRANCH SASKATCHEWAN INDUSTRY AND RESOURCES
(306) 787-2605 [email protected]
www.ir.gov.sk.ca
FISCAL REGIMES APPLIED TO NATURAL GAS PRODUCTION
ADMINISTERED BY INDUSTRY AND RESOURCES
CROWN ROYALTY
FREEHOLD PRODUCTION TAX
ADMINISTERED BY FINANCE
CORPORATION CAPITAL TAX SURCHARGE
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TWO COMPONENTS:
1. BASIC ROYALTY STRUCTURE
- SENSITIVE TO PRICE
- SENSITIVE TO PRODUCTION RATEOF WELL
2. VOLUME INCENTIVE
SASKATCHEWAN’S NATURAL GAS CROWN ROYALTY REGIME
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www.ir.gov.sk.ca
Basic Royalty Structure
Monthly Gas Production Per Well (thousand cubic metres per month)
Cro
wn
Ro
ya
lty
Ra
te (
%)
25
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www.ir.gov.sk.ca
ILLUSTRATION OF PRICE SENSITIVE ROYALTY STRUCTURE@ VARIOUS AVERAGE NATURAL GAS PRICES
0
5
10
15
20
25
30
35
40
Production (103m3/month)
Cro
wn
Ro
yalt
y R
ate
(%)
Reference Well
Minimum @ $50/103m3
25025
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www.ir.gov.sk.ca
ILLUSTRATION OF PRICE SENSITIVE ROYALTY STRUCTURE@ VARIOUS AVERAGE NATURAL GAS PRICES
0
5
10
15
20
25
30
35
40
Production (103m3/month)
Cro
wn
Ro
yalt
y R
ate
(%)
Reference Well
Minimum @ $50/103m3
@ $75/103m3
25025
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www.ir.gov.sk.ca
ILLUSTRATION OF PRICE SENSITIVE ROYALTY STRUCTURE@ VARIOUS AVERAGE NATURAL GAS PRICES
0
5
10
15
20
25
30
35
40
Production (103m3/month)
Cro
wn
Ro
yalt
y R
ate
(%)
Reference Well
Minimum @ $50/103m3
@ $75/103m3
@ $100/103m3
25025
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www.ir.gov.sk.ca
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ILLUSTRATION OF PRICE SENSITIVE ROYALTY STRUCTURE@ VARIOUS AVERAGE NATURAL GAS PRICES
0
5
10
15
20
25
30
35
40
Production (103m3/month)
Cro
wn
Ro
yalt
y R
ate
(%
)
Reference Well
@ $300/103m3
Minimum @ $50/103m3
@ $75/103m3
@ $100/103m3
25025
www.ir.gov.sk.ca
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ILLUSTRATION OF PRICE SENSITIVE ROYALTY STRUCTURE@ VARIOUS AVERAGE NATURAL GAS PRICES
0
5
10
15
20
25
30
35
40
Production (103m3/month)
Cro
wn
Ro
yalt
y R
ate
(%
)
Reference Well
@ $300/103m3
Minimum @ $50/103m3
@ $75/103m3
@ $100/103m3
Maximum @ Infinite Price
25025 100
www.ir.gov.sk.ca
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Saskatchewan, British Columbia and Alberta Natural Gas Royalty Comparison using a Natural Gas Price equal to $300/103m3 ($8.20/GJ)
0
5
10
15
20
25
30
35
40
0 50 100 150 200 250 300 350 400 450 500
Production (103m3/month)
Cro
wn
Ro
ya
lty
Ra
te (
%)
Alberta Old Gas (New Drilling in Old Pools)
Alberta New Gas (New Drilling in New Pools)
BC New Gas (All New Drilling)
Saskatchewan Fourth Tier (All New Drilling)(includes 2% Corporation Capital Tax Surcharge)
www.ir.gov.sk.ca
GENERAL INCENTIVE CROWN FREEHOLDEXPLORATORY DEFINITION VOLUME ROYALTY PRODUCTION TAX
Well at least 4.8 km (3miles) 25,000,000 2.5% ZEROfrom Another Well CUBIC METRES
INCENTIVE VOLUME AND APPLICABLE ROYALTY/TAX RATESFOR "EXPLORATORY" NATURAL GAS WELLS
MAXIMUM RATE
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Royalty Rate Applied To Incentive Volume
Monthly Gas Production Per Well (thousand cubic metres)
Cro
wn
Ro
ya
lty
Ra
te (
%)
2.5Maximum Rate Applied to Volume Incentive
25
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www.ir.gov.sk.ca
0
5
10
15
20
25
Crown RoyaltyCorporation Capital Tax Surcharge
Comparison of Average Crown Royalty Rates for Gas Wells
Average Northwest Gas Well
SaskatchewanRegime
Alberta New Pool Regime
Average Southwest Gas Well
SaskatchewanRegime
Alberta New Pool Regime
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www.ir.gov.sk.ca
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Associated Gas Royalty Structure@ $300/103m3 Average Natural Gas Price ($8.20/GJ)
0
5
10
15
20
25
30
35
40
Monthly Gas Production From An Oil Well (103m3)
Cro
wn
Roy
alty
Rat
e (%
)
Alberta
British Columbia
Saskatchewan
64.725
www.ir.gov.sk.ca
Top stripAssociated Gas Royalty Structure
@ $300/103m3 Average Natural Gas Price ($8.20/GJ)
0
5
10
15
20
25
30
35
40
Monthly Gas Production From An Oil Well (103m3)
Cro
wn
Roy
alty
Rat
e (%
)
Alberta
British Columbia
Saskatchewan(Includes 2% Corporation Capital Tax Surcharge)
64.725
Average Saskatchewan
Well
www.ir.gov.sk.ca
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PR - IC01 Crude Oil Price Sensitive Royalty/Tax Structure
PR - IC02 Natural Gas Price Sensitive Royalty/Tax Structure
PR - IC03 Royalty/Tax Incentive Volumes for Vertical Oil Wells
PR - IC04 Royalty/Tax Incentive Volumes for Exploratory Gas Wells
PR - IC05 Royalty/Tax Incentive Volumes for Horizontal Oil Wells
PR - IC06 Royalty/Tax Regime For Incremental Oil Produced From Projects
PR - IC07 Reclassification Program For Oil Wells Producing "Old Oil"
PR - IC08 Helium and Associated Gases Royalty Structure
PR - IC09 Well-Head Value of Crude Oil For Royalty/Tax Purposes
PR - IC10 Well-Head Value of Natural Gas For Royalty/Tax Purposes
PR - IC11/11A Royalty/Tax Regime Applicable to EOR Projects
PR - IC12 Royalty/Tax Program of High Water-Cut Oil Wells
PR - IC13 Recovered Crude Oil Tax Structure
www.ir.gov.sk.ca/royaltytaxinfocirc
www.ir.gov.sk.ca
LOCATION OF ROYALTY/TAX RATE CALCULATOR
www.ir.gov.sk.ca/royaltytaxfactors
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www.ir.gov.sk.ca
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SASKATCHEWAN NATURAL GAS WELLS DRILLED
268
369327
634
1038
1209
1409
1874
2318
1938
0
500
1000
1500
2000
2500
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
Nu
mb
er
of
Ga
s W
ell
s D
rill
ed
www.ir.gov.sk.ca
PETROLEUM ROYALTIES BRANCHPETROLEUM ROYALTIES BRANCHPETROLEUM ROYALTIES BRANCHPETROLEUM ROYALTIES BRANCH
DALE FLETCHERDirector
[email protected] (306) 787-2605
DALE FLETCHERDirector
[email protected] (306) 787-2605
MIKE FERGUSONSenior Engineer
[email protected](306) 787-2604
MIKE FERGUSONSenior Engineer
[email protected](306) 787-2604
BRUCE LERNERSenior Engineer
[email protected] (306) 787-2748
BRUCE LERNERSenior Engineer
[email protected] (306) 787-2748
Conventional Oil Royalties and IncentivesConventional Oil Royalties and Incentives
Currently VacantJunior Engineer
Position (306) 787-2612
Currently VacantJunior Engineer
Position (306) 787-2612
Currently VacantJunior Engineer
Position(306) 787-8588
Currently VacantJunior Engineer
Position(306) 787-8588
Gas Royalties and EORGas Royalties and EOR ForecastingForecasting
GLEN BRULEJunior Engineer
[email protected](306) 787-2597
GLEN BRULEJunior Engineer
[email protected](306) 787-2597
DEAN REDINGEngineer
[email protected](306) 787-8585
DEAN REDINGEngineer
[email protected](306) 787-8585
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www.ir.gov.sk.ca
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$/1000m3 $/gj * $/mcf 1000m3/mth gj/mth * mcf/mth
50.00 1.37 1.41 25 915 88760.00 1.64 1.69 50 1,830 1,77570.00 1.91 1.97 65 2,379 2,30780.00 2.19 2.25 100 3,660 3,54990.00 2.46 2.54 125 4,575 4,437
100.00 2.73 2.82 150 5,490 5,324110.00 3.01 3.10 175 6,405 6,211120.00 3.28 3.38 200 7,320 7,099130.00 3.55 3.66 225 8,235 7,986140.00 3.83 3.94 250 9,150 8,873150.00 4.10 4.23 275 10,065 9,761160.00 4.37 4.51 300 10,980 10,648170.00 4.64 4.79 325 11,895 11,535180.00 4.92 5.07 350 12,810 12,423190.00 5.19 5.35 375 13,725 13,310200.00 5.46 5.63 400 14,640 14,197210.00 5.74 5.92 425 15,555 15,085220.00 6.01 6.20 450 16,470 15,972230.00 6.28 6.48 475 17,385 16,860240.00 6.56 6.76 500 18,300 17,747250.00 6.83 7.04 525 19,215 18,634260.00 7.10 7.33 550 20,130 19,522270.00 7.38 7.61 575 21,045 20,409280.00 7.65 7.89 600 21,960 21,296290.00 7.92 8.17 625 22,875 22,184300.00 8.20 8.45 650 23,790 23,071310.00 8.47 8.73 675 24,705 23,958320.00 8.74 9.02 700 25,620 24,846330.00 9.02 9.30 725 26,535 25,733340.00 9.29 9.58 750 27,450 26,620350.00 9.56 9.86 775 28,365 27,508
* Based on an average heat factor for Saskatchewan natural gas of 36.6 gigajoules per thousand cubic metres.
PRICE CONVERSIONS VOLUME CONVERSIONS
NATURAL GAS CONVERSION TABLE
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