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Volume 57, No. 5

30/2014

The British Columbia Gazette,

Part II

March 25, 2014

B.C. Reg. 30/2014 , deposited March 14, 2014, under the PETROLEUM AND NATURAL GAS ACT [section 73]. Order in Council 102/2014, approved and ordered March 14, 2014.

On the recommendation of the undersigned, the Administrator, by and with the advice

and consent of the Executive Council, orders that the Petroleum and Natural Gas Royalty

and Freehold Production Tax Regulation, B.C. Reg. 495/92, is amended as set out in

the attached Schedule.

— R. COLEMAN, Minister of Natural Gas Development and Minister Responsible for Housing and Deputy

Premier ; M. POLAK, Presiding Member of the Executive Council .

Schedule

Section 1 of the Petroleum and Natural Gas Royalty and Freehold Production Tax Regulation,

B.C. Reg. 495/92, is amended

(

a) in subsection (1)

(

i) in the definition of “deep well depth” by striking out “ deep well event ” and substituting “ well event ”,

(ii) in the definition of “deep well event” by striking out “ subsection (5) or (5.1); ” and substituting “ subsection (5), (5.1) or (5.2); ”, and

(iii) in the definition of “horizontal length factor” by striking out “ for a gas well event with ” in paragraph (

a) and substituting “ for a gas well event in a well that has a spud date of or before August 31, 2009 and ” and by repealing paragraph (a.1) and substituting the following:

(a.1) for a gas well event in a well that has a spud date after August 31, 2009 and

a measured depth to the completion point equal to or less than 2 875 metres, the lesser

of the following amounts:

(i) 1;

(ii) the amount determined by the following formula:

60 – 0.035 × (measured depth to completion point – 2 300)

(

b) in subsection (5) by striking out “ Subject to subsection (5.1) ,” and substituting “ In the case of a well that has a spud date of or before August 31, 2009, ”,

(

c) in subsection (5.1) by striking out “ after August 31, 2009, ” and substituting “ after August 31, 2009 and of or before March 31, 2014, ”,

(

d) in subsection (5.1) (

f) by striking out “ ultra-marginal ” and substituting “ ultramarginal ”,

(

e) by adding the following subsection:

(5.2) In the case of a well that has a spud date after March 31, 2014, a well event

is a deep well event in either of the following circumstances:

(

a) if

(

i) the well event is a gas well event,

(ii) the well event, if in a horizontal well, has a completion point that has a true

vertical depth deeper than 1 900 metres,

(iii) the well event, if in a vertical well, has a completion point that has a true

vertical depth deeper than 2 500 metres,

(iv) the well event is not a deep re-entry well event, and

(

v) the well event is not part of a coalbed methane project;

(

b) if

(

i) the well event is a gas well event,

(ii) the well event is in a horizontal well and has

(

A) a completion point that has a true vertical depth equal to or less than 1 900

metres, and

(

B) a deep well depth deeper than 2 500 metres, and

(iii) the well event is not part of a coalbed methane project. , and

(

f) by repealing subsection (6) (

b) and substituting the following:

(

b) in the case of a well that has a spud date of or before March 31, 2014, the well

event is either

(

i) in a vertical well and has a true vertical depth to the top of the pay of the

well event of less than 2 500 metres, or

(ii) in a horizontal well and has a true vertical depth to the top of the pay of

the well event of less than 2 300 metres,

(b.1) in the case of a well that has a spud date after March 31, 2014, the well event

is in a vertical well and has

(

i) a true vertical depth to the top of the pay of the well event of less than 2 500 metres,

and

(ii) a completion point that has a true vertical depth equal to or less than 2 500 metres, .

Section 7 is amended

(

a) by repealing subsection (0.1) and substituting the following:

(0.1) In this section:

“minimum royalty amount” means the sum of the following:

(

a) the specified percentage of the volume of marketable gas made available for sale

in the producing month from a well event multiplied by the reference price for that

marketable gas;

(

b) the specified percentage of the volume of natural gas liquids sold from a well

event in the producing month multiplied by the reference price for those natural gas

liquids;

(

c) the specified percentage of the volume of sulphur sold from a well event in the

producing month multiplied by the reference price for that sulphur;

“specified percentage” means

(a) 6%, in the case of a deep well event under

section 1 (5.2) (b), and

(b) 3%, in any other case. , and

(

b) in subsection (7) (c)

(

i) by repealing the

definitions of “ CV ” and “ AD ” and substituting the following:

CV means the cumulative value that is shown in the specified table opposite the table

depth of whichever of those deep well events is the deepest (the “deepest well event”);

AD means the incremental value that is shown in the specified table opposite the

table depth of the deepest well event multiplied by the positive difference between

the deep well depth of that well event and the table depth of that well event; ,

(ii) by adding the following definition after the definition of “ PI ”:

specified table means,

(

i) in the case of a deep well event under

section 1 (5), the portion of Table 1

applicable to the well under subsection (7.1),

(ii) in the case of a deep well event under

section 1 (5.1) or (5.2) (a), the portion

of Table 2 applicable to the well under subsection (7.1), and

(iii) in the case of a deep well event under

section 1 (5.2) (b), Table 3; , and

(iii) by adding the following table:

Table 3

Depth (metres)

Cumulative Value $000

Incremental Value $/Metre

2 500

3 000

3 500

1 020

4 000

1 510

1 006

4 500

2 013

5 000

2 500

5 500

2 811

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