Alberta Regulation 202/2006

Government Organization Act

ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT

GRANT AMENDMENT REGULATION

Filed: August 23, 2006

For information only: Made by the Lieutenant Governor in Council (O.C. 380/2006)

on August 23, 2006 pursuant to

section 13 of the Government Organization Act.

1 The Aboriginal Affairs and Northern Development Grant

Regulation (AR 4/2002) is amended by this Regulation.

Section 11 is amended by striking out "2006" and

substituting "2016".

--------------------------------

Alberta Regulation 203/2006

Government Organization Act

INTERNATIONAL AND INTERGOVERNMENTAL RELATIONS

GRANT AMENDMENT REGULATION

Filed: August 23, 2006

For information only: Made by the Lieutenant Governor in Council (O.C. 389/2006)

on August 23, 2006 pursuant to

section 13 of the Government Organization Act.

1 The International and Intergovernmental Relations Grant

Regulation (AR 5/2002) is amended by this Regulation.

Section 11 is amended by striking out "2006" and

substituting "2016".

Alberta Regulation 204/2006

Securities Act

SECURITIES AMENDMENT REGULATION

Filed: August 23, 2006

For information only: Made by the Lieutenant Governor in Council (O.C. 392/2006)

on August 23, 2006 pursuant to

section 223 of the Securities Act.

1 The Securities Regulation (AR 115/95) is amended by

this Regulation.

Part 1

Fee Changes Effective October 1, 2006

2 The

Schedule is amended

(

a) in

section 2(

a) by striking out "$1000" and

substituting "$1080";

(

b) in

section 2(

b) and (

c) by striking out "$250" and

substituting "$270";

(

c) in

section 3(1) by striking out "$1000" wherever it

occurs and substituting "$1080";

(

d) in

section 5(1) and (2) by striking out "$100"

wherever it occurs and substituting "$108";

(

e) in

section 6(1) and (2)(

b) by striking out "$500" and

substituting "$540";

(

f) in

section 9(1)(

a) by striking out "$2000" and

substituting "$2160";

(

g) in

section 9(1)(

b) by striking out "$250" and

substituting "$270";

(

h) in

section 10(1) by striking out "$1000" and

substituting "$1080";

(

i) in

section 10(2) by striking out "$500" and

substituting "$540";

(

j) in

section 10(3) by striking out "$250" and

substituting "$270";

(

k) in

section 14(3) by striking out "$300" and

substituting "$500";

(

l) in

section 15(1)

(

i) by striking out "$300" and substituting "$500",

and

(ii) by striking out "151 or";

(

m) by repealing

section 15(2);

(

n) in

section 16 by striking out "$150" and substituting

"$500".

Part 2

Fee Changes Effective April 1, 2007

3 The

Schedule is amended

(

a) in

section 2(

a) by striking out "$1080" and

substituting "$1150";

(

b) in

section 2(

b) and (

c) by striking out "$270" and

substituting "$288";

(

c) in

section 3(1) by striking out "$1080" wherever it

occurs and substituting "$1150";

(

d) in

section 5(1) and (2) by striking out "$108"

wherever it occurs and substituting "$115";

(

e) in

section 6(1) by striking out "$540" and

substituting "$575";

(

f) in

section 9(1)(

a) by striking out "$2160" and

substituting "$2280";

(

g) in

section 9(1)(

b) by striking out "$270" and

substituting "$288";

(

h) in

section 10(1) by striking out "$1080" and

substituting "$1150";

(

i) in

section 10(2) by striking out "$540" and

substituting "$575";

(

j) in

section 10(3) by striking out "$270" and

substituting "$288";

(

k) in

section 14 by striking out "$500" wherever it

occurs and substituting "$650";

(

l) in

section 15(1) by striking out "$500" and

substituting "$650";

(

m) in

section 16 by striking out "$500" and substituting

"$650".

Part 3

Fee Changes Effective April 1, 2008

4 The

Schedule is amended

(

a) in

section 2(

a) by striking out "$1150" and

substituting "$1200";

(

b) in

section 2(

b) and (

c) by striking out "$288" and

substituting "$300";

(

c) in

section 3(1) by striking out "$1150" wherever it

occurs and substituting "$1200";

(

d) in

section 5(1) and (2) by striking out "$115"

wherever it occurs and substituting "$120";

(

e) in

section 6(1) by striking out "$575" and

substituting "$600";

(

f) in

section 9(1)(

a) by striking out "$2280" and

substituting "$2400";

(

g) in

section 9(1)(

b) by striking out "$288" and

substituting "$300";

(

h) in

section 10(1) by striking out "$1150" and

substituting "$1200";

(

i) in

section 10(2) by striking out "$575" and

substituting "$600";

(

j) in

section 10(3) by striking out "$288" and

substituting "$300";

(

k) in

section 14 by striking out "$650" wherever it

occurs and substituting "$750";

(

l) in

section 15(1) by striking out "$650" and

substituting "$750";

(

m) in

section 16 by striking out "$650" and substituting

"$750".

Part 4

Coming into Force Provision

5(1)

Part 1 comes into force on October 1, 2006.

(2) Part 2 comes into force on April 1, 2007.

(3) Part 3 comes into force on April 1, 2008.

--------------------------------

Alberta Regulation 205/2006

Mines and Minerals Act

HORIZONTAL RE-ENTRY WELL ROYALTY REDUCTION

AMENDMENT REGULATION

Filed: August 23, 2006

For information only: Made by the Lieutenant Governor in Council (O.C. 397/2006)

on August 23, 2006 pursuant to sections 5 and 36 of the Mines and Minerals Act.

1 The Horizontal Re-entry Well Royalty Reduction

Regulation (AR 348/92) is amended by this Regulation.

Section 1 is amended

(

a) by renumbering it as

section 1(1);

(

b) in subsection (1)

(

i) in clause (

a) by adding "or the Alberta Energy and

Utilities Board" after "Conservation Board";

(ii) in clause (b)

(

A) by striking out "payable" and substituting

"reserved to the Crown";

(

B) by adding "or" after subclause (i), striking

out "and" at the end of subclause (ii) and

repealing subclause (iii);

(iii) by repealing clauses (c), (

d) and (

e) and

substituting the following:

(c) "Crown interest", in respect of a well or well event

for any period, means

(

i) in the case of a well or well event that is

subject to a unit agreement, a unit operation

order or an order of the Board under

section

80 or 81 of the Oil and Gas Conservation

Act, the percentage of any production

obtained during the period from the area

subject to that agreement or order that would

be allocated pursuant to the agreement or

order to all the Crown tracts in that area, or

(ii) in the case of a well or well event that is not

referred to in subclause (i), the percentage of

the area of the production entity, as defined in

the Petroleum Royalty Regulation, containing

the well or well event that consists of one or

more Crown tracts;

(d) "Crown production", in respect of crude oil or oil

sands obtained from a well or well event in a

period, means the total production of crude oil or

oil sands from the well or well event in the period

multiplied by the Crown interest for the well or

well event for the period;

(d.1) "Crown tract" means the whole or part of a

location;

(e) "eligible oil" means crude oil or oil sands that is

determined to be eligible oil under

section 1.1;

(iv) in clause (

g) by adding "and before November 1,

2006" after "September 30, 1992";

(

v) by repealing clause (h);

(vi) by repealing clause (i)(

i) and substituting the

following:

(

i) that is in whole or in part within the area enclosed

by a scheme boundary or less than 0.8 kilometres

from a scheme boundary, unless the Minister has

made a declaration in respect of the well under

section 1.2, or

(vii) by adding the following after clause (n):

(n.1) "oil sands well event" means a well event that is

part of an oil sands well;

(viii) by adding the following after clause (o):

(o.1) "oil well event" means a well event that is part of

an oil well;

(o.2) "operator", in respect of a well, means the person

who is the operator of the well according to the

records of the Department;

(ix) by adding the following after clause (p):

(p.1) "production month", in respect of a well, means a

month in which crude oil or oil sands is obtained

from the well;

(

x) by adding the following after clause (s):

(t) "well event" means

(

i) a part of a well completed in a zone and given

a unique well identifier by the Board,

(ii) parts of a well completed in 2 or more zones

and given a single unique well identifier by

the Board,

(iii) a part of a well completed in and recovering

crude oil or oil sands from a zone but which

has not yet been given a unique well

identifier by the Board, or

(iv) parts of a well completed in and recovering

crude oil or oil sands from 2 or more zones

during the period when the parts are

considered by the Minister as a single well

event for the purposes of this Regulation and

before the Board makes a decision whether or

not to give the parts a single unique well

identifier.

(

c) by adding the following after subsection (1):

(2) A reference in this Regulation to a month, whether by its

name or not, shall be construed as the period commencing at

7:00 a.m. Mountain Standard Time on the first day of the

month and ending immediately before 7:00 a.m. Mountain

Standard Time on the first day of the next month.

3 The following is added after

section 1:

Eligible oil

1.1 Crude oil or oil sands is eligible oil if it is obtained

(

a) from a horizontal extension of an eligible well,

(

b) from an oil well event or oil sands well event that meets

all of the following requirements:

(

i) the well event is part of the horizontal extension

referred to in clause (a);

(ii) the Crown interest in the well event is greater than

0%;

(iii) any crude oil or oil sands obtained from the well

event is subject to the payment of royalty under the

Petroleum Royalty Regulation or the Oil Sands

Royalty Regulation, 1984,

(

c) from a qualifying pool, and

(

d) in segregation from crude oil or oil sands obtained from

any other pool or oil sands deposit that is penetrated by

the well referred to in clause (a).

Declaration that well not ineligible well

1.2(1) The Minister may, by order, declare that a well that is in

whole or in part within the area enclosed by the scheme boundary

of a scheme or less than 0.8 kilometres from the scheme boundary

of a scheme is not an ineligible well if

(

a) the Board has cancelled its requirement for or approval

of the scheme under

section 38 or 39, respectively, of

the Oil and Gas Conservation Act, or

(

b) the t-factor for the scheme, if any, for the purposes of

the Enhanced Recovery of Oil Royalty Reduction

Regulation (AR 348/93) is zero.

(2) An order by the Minister under subsection (1) may be made

effective on a date earlier than the date the order is made, but may

not be effective in respect of any period of time for which the

Minister's power under

section 38 of the Act to recalculate or

make additional calculations of the Crown's royalty share of a

mineral has expired.

Section 2 is amended

(

a) in subsection (1) by adding "maintenance" before

"production month";

(

b) in subsection (2) by striking out "in each of the latest

12 production months" and substituting "in the latest 12

maintenance production months";

(

c) in subsection (4) by striking out "each of".

Section 3 is amended

(

a) in clauses (

a) and (b)(

i) by striking out "Crown interest

in the eligible oil" and substituting "Crown interest in the

well event from which the eligible oil is obtained";

(

b) in clause (b)(iii)

(

i) by adding "in the month" after "for that well";

(ii) by striking out "Crown interest in the eligible oil

obtained in the month" and substituting "Crown

interest in the well event from which the eligible oil is

obtained".

Section 4(2) is repealed and the following is substituted:

(2) No declaration may be issued unless the operator of the

eligible well or the holder of a licence issued for the eligible well

under the Oil and Gas Conservation Act or the Oil Sands

Conservation Act applies to the Minister for the declaration.

Section 5 is amended in subsections (1) and (2)

(

a) by striking out ", the Horizontal Well Petroleum Royalty

Regulation";

(

b) by striking out "month" and substituting "production

month occurring prior to September 1, 2012".

Section 6 is repealed and the following is substituted:

Termination of royalty reduction

6(1) A royalty reduction in respect of an eligible well terminates

(

a) at the beginning of the month in which a royalty reduction

under the Low Productivity Well Royalty Reduction

Regulation (AR 350/92) applies to crude oil or oil sands

obtained from the well, unless the royalty reduction for the

well under that Regulation is wholly revoked under

section 7

of that Regulation,

(

b) at the beginning of the month in which the well becomes a

reactivated well under the Reactivated Well Royalty

Exemption Regulation (AR 352/92), unless the royalty

exemption in respect of the well under that regulation is

wholly revoked under

section 7 of that Regulation,

(

c) at the beginning of the month in which the well becomes an

ineligible well,

(

d) at the beginning of the month after the month in which the

well is abandoned,

(

e) on August 31, 2007, if on or before that date the value of the

royalty reduction for the well determined under subsection

(2) exceeds the maximum value determined for the well

under subsection (4), or

(

f) when the value of the royalty reduction for the well

determined under subsection (2) exceeds the maximum value

determined for the well under subsection (4), if that occurs

after August 31, 2007.

(2) The value of the royalty reduction for an eligible well for the

purposes of subsection (1)(

e) and (

f) is the aggregate of the

amounts determined under subsection (3).

(3) For each month that a royalty is reduced in respect of a well

pursuant to

section 5, the Minister shall determine the value of the

royalty reduction for that month by

(

a) subtracting the reduced royalty from the conventional royalty

that would otherwise have been payable in respect of the

production from the well for that month, and

(

b) multiplying the difference obtained under clause (

a) by the

par price prescribed under

section 1.1(4) of the Petroleum

Royalty Regulation for that month that would otherwise have

applied to the calculation of the conventional royalty on

production from the well for that month.

(4) The maximum value for the purposes of subsection (1)(

e) and

(

f) of a well is the product of $900 000 multiplied by the Crown

interest for the well for the first production month in which a

royalty reduction applied in respect of the well.

Section 7(1) is amended by striking out "or" at the end of

clause (

d) and adding the following after clause (d):

(d.1) compliance with

section 47(6) of the Act in connection

with an audit or examination relating to a royalty

reduction in respect of a well has been inadequate, or

10 The following is added after

section 7:

Request to revoke declaration

7.1(1) The Minister may wholly revoke a declaration issued in

respect of an eligible well on receiving a written request to do so

from the operator of the well or the holder of a licence issued for

the well under the Oil and Gas Conservation Act or the Oil Sands

Conservation Act.

(2) A written request under subsection (1) must be received by the

Minister within 6 months after the end of the month in which the

declaration in respect of eligible oil obtained from the well is

effective.

(3) If the Minister revokes a declaration under subsection (1),

Crown royalty on the eligible oil obtained from the well is

calculated as if entitlement to the royalty reduction never arose.

Reinstatement of declaration

7.2(1) If the Minister considers it appropriate to do so, the

Minister may reinstate a declaration that was revoked wholly or in

part under

section 7 or 7.1.

(2) If the Minister reinstates a declaration under subsection (1) in

respect of an eligible well, royalty on the eligible oil obtained from

the well is calculated as if the declaration was never revoked.

(3) A reinstatement made by the Minister under subsection

(1) may be made effective on a date earlier than the date the

reinstatement is made, but may not be effective in respect of any

period of time for which the Minister's power under

section 38 of

the Act to recalculate or make additional calculations of the

Crown's royalty share of a mineral has expired.

Limit on royalty adjustments

7.3 Despite any other provisions of this Regulation, oil obtained

from an oil well or oil sands obtained from an oil sands well does

not qualify for a royalty reduction under this Regulation in any

month in which any of the following royalty adjustments have

been made in respect of the oil or oil sands:

(

a) the royalty reduction provided for in the Low Productivity

Well Royalty Reduction Regulation (AR 350/92);

(

b) the royalty exemption provided for in the Reactivated Well

Royalty Exemption Regulation (AR 352/92);

(

c) the royalty exemption provided for in the Third Tier

Exploratory Well Royalty Exemption Regulation (AR 16/93).

Section 8 is repealed and the following is substituted:

Additional information

8 For the purposes of administering this Regulation or evaluating,

formulating or administering the policies and programs of the

Department regarding royalties, the Minister may at any time

request in writing that an applicant under

section 4, a holder of a

licence issued for an eligible well under the Oil and Gas

Conservation Act or the Oil Sands Conservation Act, or the

operator of an eligible well, or any of them, provide the Minister

with the information respecting the eligible well or a horizontal

extension of the eligible well, including information respecting the

cost of recovering crude oil or oil sands from the horizontal

extension.

Section 10 is repealed and the following is substituted:

Expiry

10 This Regulation expires on December 31, 2017.

--------------------------------

Alberta Regulation 206/2006

Mines and Minerals Act

LOW PRODUCTIVITY WELL ROYALTY REDUCTION

AMENDMENT REGULATION

Filed: August 23, 2006

For information only: Made by the Lieutenant Governor in Council (O.C. 398/2006)

on August 23, 2006 pursuant to sections 5 and 36 of the Mines and Minerals Act.

1 The Low Productivity Well Royalty Reduction Regulation

(AR 350/92) is amended by this Regulation.

Section 1 is amended

(

a) by renumbering it as

section 1(1);

(

b) in subsection (1)

(

i) in clause (

a) by adding "or the Alberta Energy and

Utilities Board" after "Conservation Board";

(ii) in clause (

b) by striking out "payable" and

substituting "reserved to the Crown";

(iii) by adding the following after clause (b):

(b.1) "Crown interest", in respect of a well or well event

for any period, means

(

i) in the case of a well or well event that is

subject to a unit agreement, a unit operation

order or an order of the Board under

section

80 or 81 of the Oil and Gas Conservation

Act, the percentage of any production

obtained during the period from the area

subject to that agreement or order that would

be allocated pursuant to the agreement or

order to all the Crown tracts in that area, or

(ii) in the case of a well or well event that is not

referred to in subclause (i), the percentage of

the area of the production entity, as defined in

the Petroleum Royalty Regulation, containing

the well or well event that consists of one or

more Crown tracts;

(iv) by repealing clause (

c) and substituting the

following:

(c) "Crown production", in respect of crude oil or oil

sands obtained from a well or well event in a

period, means the total production of crude oil or

oil sands from the well or well event in the period

multiplied by the Crown interest for the well or

well event for the period;

(

v) by adding the following after clause (c):

(c.1) "Crown tract" means the whole or part of a

location;

(vi) by repealing clause (

d) and substituting the

following:

(d) "eligible oil" means crude oil or oil sands that is

determined to be eligible oil under

section 2.1;

(vii) by repealing subclause (f)(

i) and substituting

the following:

(

i) that is in whole or in part within the area enclosed

by a scheme boundary or less than 0.8 kilometres

from a scheme boundary, unless the Minister has

made a declaration in respect of the well under

section 2.2, or

(viii) by adding the following after clause (i):

(i.1) "oil sands well event" means a well event that is

part of an oil sands well;

(ix) by adding the following after clause (j):

(j.1) "oil well event" means a well event that is part of

an oil well;

(j.2) "operator", in respect of a well, means the person

who is the operator of the well according to the

records of the Department;

(

x) by adding the following after clause (k):

(k.1) "production month", in respect of a well, means a

month in which crude oil or oil sands is obtained

from the well;

(xi) by repealing clause (

l) and substituting the

following:

(l) "qualifying period", in respect of a well, means

period of 24 consecutive months during which the

requirements of

section 2(

a) to (

d) are satisfied in

respect of the well;

(xii) by adding the following after clause (n):

(o) "threshold quantity", in respect of a low

productivity well for a production month, means

the threshold quantity determined for the well for

that month under the Schedule;

(p) "well event" means

(

i) a part of a well completed in a zone and given

a unique well identifier by the Board,

(ii) parts of a well completed in 2 or more zones

and given a single unique well identifier by

the Board,

(iii) a part of a well completed in and recovering

crude oil or oil sands from a zone but which

has not yet been given a unique well

identifier by the Board, or

(iv) parts of a well completed in and recovering

crude oil or oil sands from 2 or more zones

during the period when the parts are

considered by the Minister as a single well

event for the purposes of this Regulation and

before the Board makes a decision whether or

not to give the parts a single unique well

identifier.

(

c) by adding the following after subsection (1):

(2) A reference in this Regulation to a month, whether by its

name or not, shall be construed as the period commencing at

7:00 a.m. Mountain Standard Time on the first day of the

month and ending immediately before 7:00 a.m. Mountain

Standard Time on the first day of the next month.

Section 2 is repealed and the following is substituted:

Low productivity well

2 An oil well or oil sands well is a low productivity well if it

meets all of the following requirements:

(

a) in a period of 24 consecutive months ending after

December 1992, the well

(

i) does not in any month of the period produce more

than 121 m3 of crude oil or oil sands, not including

excluded production, and

(ii) produces crude oil or oil sands in at least 6 months

of the period;

(

b) in the last 6 production months of the 24-month period

referred to in clause (a), the well does not produce an

average of more than 73 m3 per month of crude oil or oil

sands, not including excluded production;

(

c) no royalty reduction is made in respect of the well

during the 24-month period referred to in clause (a);

(

d) any royalty reduction made in respect of the well before

the 24-month period referred to in clause (

a) was wholly

revoked under

section 6 or 7 before the commencement

of that period and has not been reinstated under

section

8.1;

(

e) the well is not an ineligible well.

4 The following is added after

section 2:

Eligible oil

2.1(1) Crude oil or oil sands that is not excluded production is

eligible oil if it is obtained from a low productivity well

(

a) after the well's qualifying period,

(

b) from an eligible well event,

(

c) from a pool or oil sands deposit penetrated by the well

before the end of the well's qualifying period, and

(

d) in segregation from crude oil or oil sands obtained from

a pool or oil sands deposit penetrated by the well after

the end of the well's qualifying period if that pool or

deposit is deeper than the pool or deposit referred to in

clause (c).

(2) An oil well event or oil sands well event is an eligible well

event for the purposes of this

section if all of the following apply:

(

a) the well event is part of a low productivity well and was

an oil well event or oil sands well event throughout the

well's qualifying period;

(

b) the Crown interest in the well event was greater than

0% in the last month of the well's qualifying period or

the Minister has made an order under subsection

(3) declaring that this requirement has been waived;

(

c) if crude oil or oil sands had been obtained from the well

event in the last month of the well's qualifying period,

that crude oil or oil sands would have been subject to

the payment of royalty under the Petroleum Royalty

Regulation or the Oil Sands Royalty Regulation, 1984.

(3) The Minister may, by order, declare that the requirement in

subsection (2)(

b) has been waived in respect of an oil well event or

oil sands well event if the only reason the well event does not meet

that requirement is undue delay on the part of the Minister to enter

into a unit agreement that provides for a Crown interest for the

well event that is greater than 0%.

(4) An order by the Minister under subsection (3) may be made

effective on a date earlier than the date the order is made, but may

not be effective in respect of any period of time for which the

Minister's power under

section 38 of the Act to recalculate or

make additional calculations of the Crown's royalty share of a

mineral has expired.

Declaration that well not ineligible well

2.2(1) The Minister may, by order, declare that a well that is in

whole or in part within the area enclosed by the scheme boundary

of a scheme or less than 0.8 kilometres from the scheme boundary

of a scheme is not an ineligible well if

(

a) the Board has cancelled its requirement for or approval

of the scheme under

section 38 or 39, respectively, of

the Oil and Gas Conservation Act, or

(

b) the t-factor for the scheme, if any, for the purposes of

the Enhanced Recovery of Oil Royalty Reduction

Regulation (AR 348/93) is zero.

(2) An order by the Minister under subsection (1) may be made

effective on a date earlier than the date the order is made, but may

not be effective in respect of any period of time for which the

Minister's power under

section 38 of the Act to recalculate or

make additional calculations of the Crown's royalty share of a

mineral has expired.

Section 3 is amended

(

a) in subsection (1) by striking out "month" and

substituting "production month occurring prior to

September 1, 2007";

(

b) by repealing subsection (3) and substituting the

following:

(3) If the quantity of eligible oil obtained from a low

productivity well in a production month occurring after August

31, 2007 is greater than the threshold quantity for the well for

that production month, the royalty reserved to the Crown under

the Petroleum Royalty Regulation or the Oil Sands Royalty

Regulation, 1984 in respect of that eligible oil is reduced to the

portion of that eligible oil that is determined under subsection

(4).

(4) For the purposes of subsection (3), the portion of eligible oil

for a production month is the amount obtained by

(

a) determining the conventional royalty that would be

reserved to the Crown if the threshold quantity was

obtained from the well in the production month,

(

b) dividing the amount determined under clause (

a) by the

product obtained by multiplying the threshold quantity

for the well for the production month by the Crown

interest for the well for the production month, and

(

c) multiplying the quotient determined under clause (

b) by

the actual quantity of eligible oil obtained from the well

in the production month.

Section 4 is amended

(

a) by renumbering it as

section 4(1);

(

b) in subsection (1)

(

i) in clause (

b) by striking out "an approval of a

horizontal extension of the well under the Horizontal

Well Petroleum Royalty Regulation (Alta. Reg. 96/91)

or";

(ii) by striking out "or" at the end of clause (c);

(iii) by adding the following after clause (d):

(

e) when 16 000 m3 of eligible oil has been obtained

from the well, if that quantity of eligible oil is

obtained from the well before September 1, 2007,

(

f) on August 31, 2007, if on or before that date the

value of the royalty reduction for the well

determined under subsection (2) exceeds the

maximum value determined for the well under

subsection (4), or

(

g) when the value of the royalty reduction for the

well determined under subsection (2) exceeds the

maximum value determined for the well under

subsection (4), if that occurs after August 31,

(

c) by adding the following after subsection (1):

(2) The aggregate of the amounts determined under subsection

(3) for a low productivity well is the value of the royalty

reduction for the well for the purposes of subsection (1)(

f) and

(g).

(3) Each month that a royalty is reduced in respect of a well

pursuant to

section 3 the Minister shall determine the value of

the royalty reduction for that month by

(

a) subtracting the reduced royalty from the conventional

royalty that would otherwise have been payable in

respect of the production from the well for that month,

and

(

b) multiplying the difference obtained under clause (

a) by

the par price prescribed under

section 1.1(4) of the

Petroleum Royalty Regulation for that month that would

otherwise have applied to the calculation of the

conventional royalty on production from the well for

that month.

(4) The maximum value for the purposes of subsection (1)(

f) and (

g) of a low productivity well is the product of $50 000

multiplied by the Crown interest for the well for the first

production month after the qualifying period for the well.

Section 5 is amended by striking out "and" at the end of

clause (a), adding ", and" at the end of clause (

b) and by

adding the following after clause (b):

(

c) the number of hours over which the substance is obtained is

consistent with a test of the well.

Section 6 is amended

(

a) by striking out "121 m3 per month" wherever it occurs

and substituting "the threshold quantity for the well";

(

b) by striking out "or" at the end of clause (

d) and

adding the following after clause (d):

(d.1) compliance with

section 47(6) of the Act in connection

with an audit or examination relating to a royalty

reduction in respect of a well has been inadequate, or

Section 7 is amended

(

a) by repealing subsection (1) and substituting the

following:

Request to revoke royalty reduction

7(1) The Minister may wholly revoke a royalty reduction in

respect of eligible oil obtained from a low productivity well on

receiving a written request to do so from the operator of the

well.

(

b) in subsection (2) by striking out "the well" and

substituting "eligible oil obtained from the well".

10 The following is added after

section 8:

Reinstatement of royalty reduction

8.1(1) If the Minister considers it appropriate to do so, the

Minister may reinstate a royalty reduction that was revoked wholly

or in part under

section 6 or 7.

(2) If the Minister reinstates a royalty reduction under subsection

(1) in respect of a low productivity well, royalty on the eligible oil

obtained from the well is calculated as if entitlement to the

reduction was never revoked.

(3) A reinstatement made by the Minister under subsection

(1) may be made effective on a date earlier than the date the

reinstatement is made, but may not be effective in respect of any

period of time for which the Minister's power under

section 38 of

the Act to recalculate or make additional calculations of the

Crown's royalty share of a mineral has expired.

Limit on royalty adjustments

8.2 Despite any other provisions of this Regulation, oil obtained

from an oil well or oil sands obtained from an oil sands well does

not qualify for a royalty reduction under this Regulation in any

month in which any of the following royalty adjustments have

been made in respect of the oil or oil sands:

(

a) the royalty reduction provided for in the Horizontal

Re-entry Well Royalty Reduction Regulation

(AR 348/92);

(

b) the royalty exemption provided for in the Reactivated

Well Royalty Exemption Regulation (AR 352/92);

(

c) the royalty exemption provided for in the Third Tier

Exploratory Well Royalty Exemption Regulation

(AR 16/93).

Section 10 is repealed and the following is substituted:

Expiry

10 For the purpose of ensuring that this Regulation is reviewed

for ongoing relevancy and necessity, with the option that it may be

repassed in its present or an amended form following a review, this

Regulation expires on September 1, 2012.

12 The following

Schedule is added at the end of the

Regulation:

Schedule

Threshold Quantity

1 For the purposes of

section 2 of this Schedule, the average

production rate of a low productivity well is the lowest average

amount of crude oil per production month, other than excluded

production, determined by the Minister to have been obtained from

the well based on the following periods of production months that

apply:

(

a) the last 6 production months occurring during the

qualifying period for the well;

(

b) every period of 6 consecutive production months that

follows the qualifying period for the well and precedes

the production month referred to in

section 2 of this

Schedule.

2 The threshold quantity for a low productivity well for a

production month is the quantity of crude oil indicated in the

Threshold Quantity column of the following Table that

corresponds to the production range in the Production Range

column of the Table within which the average production rate of

the well determined under

section 1 of this

Schedule falls:

Table

Production Range

Threshold Quantity

24 m3 per month or less

24 m3

>24 m3 and 47 m3 and