Royalties En Canada (Alberta) A La Venta De Crudo

Alberta Royalty Framework: Formulas – Natural Gas
Effective January 1, 2011
R% = Price Component (rp) + Quantity Component (rq)
R% has a minimum of 5% and a maximum of 36%
For Transition Wells*R% has a minimum of 5% and a maximum of 30%

P1
P2
P3

Q1
Q2
Q3

Royalty Parameters
Price ($/GJ)
ARF (2011)
Transition Wells
4.50
2.00
5.25
3.25
9.00
5.00
Q (103m3/d)
ARF (2011)Transition Wells
4
2
6
4
11
9

%Change (%/$/GJ)
ARF (2011)
Transition Wells
4.5%
3.5%
2%
0.5%
1%
0%
% Change (%/103m3/GJ)
ARF (2011)
Transition Wells
5%
5%
3%
2%
1%
1%

PriceComponent (rp)
Alberta Royalty Framework (2011)
Price ($/GJ)
rp
Price ($/GJ)
PP ≤ 5.25
5.25 < PP ≤ 9.00
PP > 9.00
Maximum

((PP – 4.50) * 0.0450)*100
((PP – 5.25) * 0.0200 + 0.03375)*100((PP – 9.00) * 0.0100 + 0.10875)*100
30%

Transition Wells
rp Transition Wells

PP ≤ 3.25
3.25 < PP ≤ 5.00
PP > 5.00
Maximum

((PP – 2.00) * 0.0350)*100
((PP – 3.25) * 0.0050 + 0.0437)*100((PP – 5.00) * 0.0000 + 0.0525)*100
5.25%

PP is the par price for the month in $/GJ
Note: rp can be negative
Quantity Component (rq)
Alberta Royalty Framework (2011)
Transition Wells
rqTransition Wells
Quantity (103m3/d)
rq
Quantity
33
(10 m /d)
ADP ≤ (6*DF)
(6*DF) < ADP ≤ (11*DF)
ADP > (11*DF)
Maximum

([ADP - (4*DF)]*(0.0500/DF))*100
([ADP - (6*DF)]*(0.0300/DF) +0.1000)*100
([ADP – (11*DF)]*(0.0100/DF) + 0.2500)*100
30%

ADP ≤ 4
4 < ADP ≤ 9
ADP > 9

([ADP - 2]*0.0500)*100
([ADP - 4]*0.0200 + 0.1000)*100
([ADP – 9]*0.0100 + 0.2000)*100
25%

PP is the parprice for the month in $/GJ
Note: rq can be negative
DF is a depth factor that applies only to the quantity component and is based on the measured depth (MD) of
a well where:
DF = 1 for alltransition wells and for MD ≤ 2000 m;
DF = (MD/2000)2 for MD > 2000 m; and,
The depth factor is capped at 4.

Illustration of Depth Factor Adjustment
MD

DF

Quantity

rq

1.0000

ADP ≤ 6...