Frontier Lands Petroleum Royalty Regulations — 1
1 (1) Subject to sections 2 to 5, allowed capital costs of a project are costs or expenses that are reasonably related to the project and that are (a) incurred in drilling or completing a discovery well, a delineation well or a development well located on the project lands; (b) incurred in building an access road to or preparing a site in respect of a discovery well, a delineation well or a development well, where the well is located on the project lands; (c) incurred, after the drilling of a discovery well, in respect of the collection in the field of basic geological, geophysical and geochemical information for the purpose of delineating the significant discovery indicated by the discovery well located on the project lands; (d) a geological, geophysical or geochemical expense incurred in respect of logging, coring or testing conducted in the course of the drilling of a well referred to in paragraph (a); (e) incurred in drilling or converting a well for (i) the disposal of waste liquids from a well located on the project lands, (ii) the injection of water, gas or any other substance into a petroleum formation to assist in the recovery of petroleum from another well located on the project lands, or (iii) the purposes of monitoring fluid levels, pressure changes or other phenomena in an accumulation of petroleum located on the project lands; (f) incurred in drilling for water or gas on the project lands for injection into a petroleum formation located on the project lands; (g) incurred in drilling or recompleting a petroleum well located on the project lands after the commencement of production from the well; (h) incurred in respect of abandonment and restoration; (i) incurred in acquiring or constructing production infrastructure that is to be located on the project lands or installing production infrastructure on the project lands; (j) incurred in order to licence or purchase technology for the project, including any royalty or other cost paid in respect of letters patent; (k) incurred to repair or maintain production infrastructure that is located on the project lands when the cost of those repairs or that maintenance is equal to or greater than 50% of the cost of equivalent new production infrastructure; (l) incurred in conducting a study of some aspect of the project that is required by or under law before the project or the relevant part of the project is allowed to proceed; or (m) expressly incurred as a cost under paragraph (i) or (k) but, for economic, environmental or logistical reasons, is for production infrastructure that is not located on project lands. (2) Subject to sections 2 to 5, allowed operating costs of a project are costs or expenses, other than allowed capital costs, that are reasonably related to the project and that are (a) incurred on account of the salary, wages or other remuneration or related benefits of persons employed by the operator of production infrastructure that is located on the project lands; (b) incurred (i) in respect of the repair or maintenance of production infrastructure that is located on the project lands, when the cost of those repairs or that maintenance is less than 50% of the cost of equivalent new production infrastructure, (ii) on account of taxes in respect of production infrastructure that is located on the project lands, or (iii) on account of the rental or leasing of production infrastructure that is located on the project lands; (c) incurred on account of premiums payable in respect of a policy of insurance, other than a policy of insurance for loss of revenue; (d) incurred on account of (i) the use of or the right to use any property located on the project lands, (ii) compensation for a service performed on the project lands, (iii) the acquisition of materials, parts or supplies for use on the project lands, or (iv) the transportation of supplies or personnel to or from the project lands; (e) incurred on account of telecommunications, power, water or fuel used on the p