All good mateYou put a tremendous amount of effort in… just...

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danpech

3,280 Posts.

7649

07/10/23

17:02

Post #: 70225731
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Originally posted by Value4983843: ↑

Again thanks,

After doing some more digging.

Royalties:
I am not aware of any additional royalties to be paid beyond those payable to the Alberta or Federal Government in Canada, i don't know if it operates in the same way as the state of Louisiana where the landowner is entitled to significant royalties as the initial mineral rights come with the land and have not been separated out if the rights were not sold.

I think Alberta owns 81% of the Mineral rights in Alberta and that Federal government or private holders hold the rest.
Alberta Government royalties are paid on revenue less costs basis.
Initially the royalty rates will be very low as is in the pre-payout stage and WTI Oil is currently around $80 to $90, Post payout the % will rise.

https://www.alberta.ca/royalty-overview
https://www.alberta.ca/royalty-oil-sands

Extract: from Alberta website:
Conventional Oil
All newly drilled wells are eligible for the New Well Royalty Rate which sets the royalty rate to a maximum of 5 per cent on all components for the first 12 months of production or a given production cap, whichever is first
I guess a question to David will indicate what additional royalties are payable above those to the Alberta Government.

I will look at subtracting the royalties before making the calculations due to royalties being a volume payment
(is this true in Canada as well as the States or this a global standard. )

Fortunate royalties wont be a large distorting factor pre-payout.

Again thanks for your insights that will aid understanding and modeling of profits and will include them in future spreadsheet, though will take a bit of work.

Expand

All good mate

You put a tremendous amount of effort in… just wanted to make sure you weren’t making the same mistakes I made early on in the Back Of The Envelope calculations which caused me much angst.

Yes… in the USA, individual land holders mostly own the mineral rights as the majority is state owned land. States like Oklahoma where I am focussed atm charge severance taxes which vary from state to state . At least it is fairly simple, as regardless of who owns the royalty, the math is the same.

Keep up the good work .

Dan

SHE Price at posting: 1.6¢ Sentiment: None Disclosure: Not Held
3 Upvote

0 Great analysis

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