Energy, Mines and Petroleum Resources Minister Blair Lekstrom announced a new Deep Well Royalty Program.
The program is aimed at increasing competitiveness and generating incremental acitivity in BC’s oil and gas industry.
The Deep Well Royalty Program Credit program was introduced in 2003 as
part of the Oil and Gas Development Strategy and was aimed at
developing B.C.’s deep natural gas resources.
The program specifically targets deep wells of more than 2,500 metres for vertical wells and more than 2,300 metres for vertical 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.
Three changes have been introduced to the program, which includes modification of the location of the east/west line to reflect updated geological, reservoir and drilling data, recognition of longer portions of horizontal lengths drilled, and improvements to the well qualification criteria.
These improvements are part of an economic and competitiveness strategy designed to stimulate economic growth of British Columbia’s oil and gas industry. Oil and gas rights sales in 2008 reached a record high of $2.66 billion.