On March 8, 2013 Alberta's Finance Minister, Doug Horner,
stated that no changes are planned to the current royalty
incentives for horizontal drilling in the province of Alberta. In
the provincial budget released last week, the province anticipated
a reduction in revenue from crude oil royalties. According to the
provincial government, part of the drop can be attributed to the
fact that an increasing proportion of production in the province is
derived from horizontal wells, which are eligible for the
horizontal well royalty rate.
Currently under the emerging resources and technologies
component of the royalty framework, horizontal wells receive a 5%
royalty on production for the first year and can receive the 5%
rate for an additional one to three years depending upon the depth
of the well drilled. In order to qualify the well must: (i) be an
oil or non-project oil sands well; (ii) be horizontal (as defined
by the Energy Resource Conservation Board); (iii) have a
