Indian Oil and Gas Regulations — 3
Calculation of royalty — oil 3 (1) The royalty on oil that is recovered from, or attributed to, lands in a contract area consists of the basic royalty determined in accordance with subsection (2) or (3) and the supplementary royalty determined in accordance with subsection (5). All amounts are to be calculated at the time and place of production. Basic royalty — first five years (2) During the five-year period beginning on the day on which production of oil from the contract area begins, the basic royalty for each month of that period is equal to the actual selling price multiplied by the monthly royalty determined in accordance with column 2 of the table to this subsection, based on the monthly production, referred to in column 1, of oil that is recovered from, or attributed to, each well. TABLE Item Column 1 Column 2 Monthly Production (m 3 ) Monthly Royalty (m 3 ) 1 80 or less 10% of the number of cubic metres 2 More than 80 but not more than 160 8 m 3 plus 20% of the number of cubic metres in excess of 80 3 More than 160 24 m 3 plus 26% of the number of cubic metres in excess of 160 Basic royalty — subsequent years (3) Beginning immediately after the period referred to in subsection (2), the basic royalty for each subsequent month is equal to the actual selling price multiplied by the monthly royalty determined in accordance with column 2 of the table to this subsection, based on the monthly production, referred to in column 1, of oil that is recovered from, or attributed to, each well. TABLE Item Column 1 Column 2 Monthly Production (m 3 ) Monthly Royalty (m 3 ) 1 80 or less 10% of the number of cubic metres 2 More than 80 but not more than 160 8 m 3 plus 20% of the number of cubic metres in excess of 80 3 More than 160 but not more than 795 24 m 3 plus 26% of the number of cubic metres in excess of 160 4 More than 795 189 m 3 plus 40% of the number of cubic metres in excess of 795 Notice to council (4) The Minister must send the council notice of the date on which the production referred to in subsection (2) begins. Supplementary royalty (5) The supplementary royalty is (a) in respect of oil to which subsection (2) applies, the amount determined by the formula (T – B)0.50(P – R) where T is the amount of oil, in cubic metres, that is recovered from, or attributed to, each well in the contract area during the month, B is the monthly royalty, in cubic metres, determined in accordance with the table to subsection (2), P is the actual selling price of the oil per cubic metre, and R is the reference price, equal to (i) in the case of oil recovered from a source set out in column 2 of the table to this subsection, the price set out in column 3, and (ii) in any other case, $25 per cubic metre; and (b) in respect of oil to which subsection (3) applies, the amount determined by the formula (T – B)[0.75(P – R – $12.58) + $6.29] where T is the amount of oil, in cubic metres, that is recovered from, or attributed to, each well in the contract area during the month, B is the monthly royalty, in cubic metres, determined in accordance with the table to subsection (3), P is the actual selling price of the oil per cubic metre, and R is the reference price, equal to (i) in the case of oil recovered from a source set out in column 2 of the table to this subsection, the price set out in column 3, and (ii) in any other case, $25 per cubic metre. TABLE Item Column 1 Column 2 Column 3 First Nation Lands Source Producing Before January 1, 1974 Reference Price ($/m 3 ) 1 Pigeon Lake 138A Cardium 24.04 Leduc 25.37 2 Sawridge 150G Gilwood Sand 25.13 3 Enoch Cree Nation 135 Lower Cretaceous 24.64 Acheson Leduc 24.45 Yekau Lake Leduc 25.01 4 Sturgeon Lake 154 Leduc 21.51 5 Utikoomak Lake 155 Gilwood Sand Unit No. 1 25.00 West Nipisi Unit No. 1 24.58 6 White Bear 70 10-2-10-2 W2 well 22.40 8-9-10-2 W2 well 22.63 7 Siksika 146 6-25-20-21 W4 well 18.19 8 Ermineskin 138 6-11-45-25 W4 well 19.18