On May 27, 2010, Alberta's Energy Minister, Ron Liepert,
announced the much anticipated royalty rate curves for oil and gas
wells (but excluding oil sands development). He also announced
incentive programs for unconventional resource exploration and use
of high-cost technologies. These benefits should allow operators to
more easily recover their capital costs and help to mitigate the
financial risk associated with investment in high cost wells and
The royalty rates in Alberta operate on
a sliding scale, similar to a curve, whereby the royalty rate
increases in correlation to the production from each well. These
royalty curves were altered (read increased) in 2007 as part of the
Alberta Royalty Framework (ARF), and as mentioned in our last
update, these changes, along with broader economic forces, had a
serious adverse effect on Alberta's oil and gas sector.
Specifically, they became, with the stroke of a pen, less
competitive compared with the neighbouring provinces of British
Columbia and Saskatchewan. The new royalty curves, along with the
reduced maximum royalties previously announced, have brought
Alberta's royalty regime more in line with the pre-ARF
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In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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