Fort Nelson Indian Reserve Minerals Revenue Sharing Act — F-31.4 7
7 NATURAL GAS NET PROFIT FORMULA (1) For the purposes of this Agreement, the amount of Net Profit derived by the Province, including agencies of the Province, from the disposition of Natural Gas underlying the Reserve shall be determined separately in respect of each Production Month, in accordance with the steps set forth in this paragraph 7, but for the purposes of making the calculations under each of the steps it is agreed that whenever Subject Gas is intermingled with Other Gas (that is, Natural Gas which is not Subject Gas) the Subject Gas shall for all such purposes be deemed to be apportioned among each of the Domestic Utilities and the Foreign Utility in the same proportions as deemed for the purposes of calculating the volume of British Columbia-produced gas sold and delivered under Licence GL-41, (as amended from time to time) issued by the National Energy Board (herein called the “NEB”) and for the settling of accounts between Westcoast and the Petroleum Corporation pursuant to either the Basic Agreement as amended from time to time or the directions of the NEB. Step One Determine the Domestic Price (“DP”) for the Production Month which is the subject of the calculation (the Production Month which is the subject of the calculation being referred to herein as the “Subject Month”) by use of Alternative One hereunder until the date of execution of this Agreement, and thereafter by use of whichever of Alternative One and Alternative Two will produce the greater Domestic Price in the Subject Month. Alternative One By use of the formula DP = P/V where P = The total amount of money payable by the Domestic Utilities to Westcoast for the Sales Volume (that is, the volume of Natural Gas produced in British Columbia and purchased by the Domestic Utilities during the Subject Month); V = The Sales Volume expressed in Mcf. Alternative Two By the use of the formula DP = CS+CG+1¢ (one cent); where CS and CG have the meanings assigned to them in Step Three of this paragraph 7. Step Two Calculate the Average Price (“AP”) by use of the formula AP = (DP×a) + (EP×b) where DP = Domestic Price determined according to Step One; a = Domestic Sales (that is, the volume of Natural Gas sold and delivered to the Domestic Utilities) during the Subject Month, stated as a percentage of Total Sales (defined below) for that month; b = Export Sales (that is, the volume of Natural Gas produced in British Columbia and delivered to the US-Canada boundary pursuant to NEB Licence GL-41, as amended from time to time) for the Subject Month, stated as a percentage of Total Sales; EP = The total amount payable to Westcoast by Northwest Pipeline Corporation, the successors to or assigns of the right to purchase gas under NEB Licence GL-41 for the Export Sales made during the Subject Month divided by the volume of such sales expressed in Mcf. Total Sales , where used in the paragraph 7, means the total of Domestic Sales and Export Sales for the Subject Month expressed in Mcf. Step Three Calculate Net Profit (“NP”) by use of the formula NP = (GP-Sh) × (AP-(CS+CG)) where GP = the number of Mcf of Residue Gas derived from Subject Gas produced during the Subject Month; Sh = the number of Mcf which is that percentage of GP which Shrinkage during the Subject Month is of the Residue Gas Supply for that month; AP = Average Price calculated as aforesaid in respect of the Subject Month; CS = the total of the following: (i) all sums which Westcoast is entitled (either by virtue of the Basic Agreement as amended from time to time or the orders of the National Energy Board) to recover from the Petroleum Corporation in respect of the handling (including gathering, processing and transmission) of Natural Gas during the Subject Month, (ii) all costs (other than those referred to in either clause (i) of this definition of CS or in the definition of CG) incurred by the Petroleum Corporation in the course of its operations during the Subject Month, expressed in an amount per Mcf