The Province of British Columbia has amended royalty schemes in or to further improve compeitiveness and encourage incremental activity in the provinces oil and gas industry which has surpassed forestry as the number one economic generator for the province.
In a news release issued late Tuesday, the ministry of energy and mines said it would give credit for deeper and longer horizontal wells used to develop emerging resource plays like the Horn River shales and Montney tight gas formations in the northeastern part of the province.
“In these times of economic instability, it is important that we make sure we do everything we can to support and encourage economic activity in our rural communities,” said Energy, Mines and Petroleum Resources Minister Blair Lekstrom. “These changes to B.C.’s Deep Well Royalty Program will improve our competitive position for deep wells and contribute to the ongoing growth and development of our oil and gas industry.”
The program specifically targets deep wells of more than 2,500 metres for vertical wells and more than 2,300 metres for horizontal wells. The program effectively reflects the increased costs associated with accessing deep resource plays and is designed to encourage greater exploratory activity and maximize development of resources.
Natural gas producers have applauded the provinces moves to increase incentives and offset the high cost of development. EnCana spokesman Alan Boras is quoted as stating, “B. C. continues to adapt its royalties to fit the unconventional nature of the resources in that province. We welcome it.”
News Release:Ministry of Energy, Mines and Petroleum Resources “Royalty Program Amendments to Encourage Competitiveness”
