|
|
 | | | |
- close
- close
- close
- close
These excerpts taken from the DVN 10-K filed Feb 27, 2009. Royalties
and Incentives in Canada
The royalty system in Canada is a significant factor in the
profitability of oil and gas production. Royalties payable on
production from lands other than Crown lands are determined by
negotiations between the parties. Crown royalties are determined
by government regulation and are generally calculated as a
percentage of the value of the gross production, with the
royalty rate dependent in part upon prescribed reference prices,
well productivity, geographical location, field discovery date
and the type and quality of the petroleum product produced. From
time to time, the federal and provincial governments of Canada
have also
Table of Contents
established incentive programs such as royalty rate reductions,
royalty holidays and tax credits for the purpose of encouraging
oil and gas exploration or enhanced recovery projects. These
incentives generally have the effect of increasing our revenues,
earnings and cash flow.
In December 2008, the provincial government of Alberta enacted a
new royalty regime. The new regime provides for new royalties
for conventional oil, gas, NGL and bitumen production effective
January 1, 2009. The royalties are linked to price and
production levels and apply to both new and existing
conventional oil and gas activities and oil sands projects.
This royalty regime reduced our proved reserves as of
December 31, 2008 by 28 MMBoe. Additionally, this
regime is expected to reduce future earnings and cash flows from
our oil and gas properties located in Alberta. The actual effect
on our future earnings and cash flows of this royalty regime
will be determined based on, among other things, our production
rates from wells in Alberta, the proportion of our Alberta
production to our overall production, our product mix in
Alberta, commodity prices and foreign exchange rates.
Royalties
and Incentives in Canada
The royalty system in Canada is a significant factor in the
profitability of oil and gas production. Royalties payable on
production from lands other than Crown lands are determined by
negotiations between the parties. Crown royalties are determined
by government regulation and are generally calculated as a
percentage of the value of the gross production, with the
royalty rate dependent in part upon prescribed reference prices,
well productivity, geographical location, field discovery date
and the type and quality of the petroleum product produced. From
time to time, the federal and provincial governments of Canada
have also
Table of Contents
established incentive programs such as royalty rate reductions,
royalty holidays and tax credits for the purpose of encouraging
oil and gas exploration or enhanced recovery projects. These
incentives generally have the effect of increasing our revenues,
earnings and cash flow.
In December 2008, the provincial government of Alberta enacted a
new royalty regime. The new regime provides for new royalties
for conventional oil, gas, NGL and bitumen production effective
January 1, 2009. The royalties are linked to price and
production levels and apply to both new and existing
conventional oil and gas activities and oil sands projects.
This royalty regime reduced our proved reserves as of
December 31, 2008 by 28 MMBoe. Additionally, this
regime is expected to reduce future earnings and cash flows from
our oil and gas properties located in Alberta. The actual effect
on our future earnings and cash flows of this royalty regime
will be determined based on, among other things, our production
rates from wells in Alberta, the proportion of our Alberta
production to our overall production, our product mix in
Alberta, commodity prices and foreign exchange rates.
Royalties and Incentives in Canada The royalty system in Canada is a significant factor in the profitability of oil and gas production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the parties. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, with the royalty rate dependent in part upon prescribed reference prices, well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the federal and provincial governments of Canada have also
Table of Contentsestablished incentive programs such as royalty rate reductions, royalty holidays and tax credits for the purpose of encouraging oil and gas exploration or enhanced recovery projects. These incentives generally have the effect of increasing our revenues, earnings and cash flow. In December 2008, the provincial government of Alberta enacted a new royalty regime. The new regime provides for new royalties for conventional oil, gas, NGL and bitumen production effective January 1, 2009. The royalties are linked to price and production levels and apply to both new and existing conventional oil and gas activities and oil sands projects. This royalty regime reduced our proved reserves as of December 31, 2008 by 28 MMBoe. Additionally, this regime is expected to reduce future earnings and cash flows from our oil and gas properties located in Alberta. The actual effect on our future earnings and cash flows of this royalty regime will be determined based on, among other things, our production rates from wells in Alberta, the proportion of our Alberta production to our overall production, our product mix in Alberta, commodity prices and foreign exchange rates. Royalties and Incentives in Canada The royalty system in Canada is a significant factor in the profitability of oil and gas production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the parties. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, with the royalty rate dependent in part upon prescribed reference prices, well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the federal and provincial governments of Canada have also
Table of Contentsestablished incentive programs such as royalty rate reductions, royalty holidays and tax credits for the purpose of encouraging oil and gas exploration or enhanced recovery projects. These incentives generally have the effect of increasing our revenues, earnings and cash flow. In December 2008, the provincial government of Alberta enacted a new royalty regime. The new regime provides for new royalties for conventional oil, gas, NGL and bitumen production effective January 1, 2009. The royalties are linked to price and production levels and apply to both new and existing conventional oil and gas activities and oil sands projects. This royalty regime reduced our proved reserves as of December 31, 2008 by 28 MMBoe. Additionally, this regime is expected to reduce future earnings and cash flows from our oil and gas properties located in Alberta. The actual effect on our future earnings and cash flows of this royalty regime will be determined based on, among other things, our production rates from wells in Alberta, the proportion of our Alberta production to our overall production, our product mix in Alberta, commodity prices and foreign exchange rates. These excerpts taken from the DVN 10-K filed Jun 9, 2008. Royalties
and Incentives in Canada
The royalty system in Canada is a significant factor in the
profitability of oil and natural gas production. Royalties
payable on production from lands other than Crown lands are
determined by negotiations between the parties. Crown royalties
are determined by government regulation and are generally
calculated as a percentage of the value of the gross production,
with the royalty rate dependent in part upon prescribed
Table of Contents
reference prices, well productivity, geographical location,
field discovery date and the type and quality of the petroleum
product produced. From time to time, the federal and provincial
governments of Canada have also established incentive programs
such as royalty rate reductions, royalty holidays and tax
credits for the purpose of encouraging oil and gas exploration
or enhanced recovery projects. These incentives generally have
the effect of increasing our revenues, earnings and cash flow.
On October 25, 2007, the provincial government of Alberta
announced a new royalty regime. The new regime contemplates the
introduction of new royalties for conventional oil, natural gas,
NGL and bitumen production effective January 1, 2009. The
royalties will be linked to price and production levels and will
apply to both new and existing conventional oil and gas
activities and oil sands projects.
The implementation of the proposed changes to the royalty regime
in Alberta is subject to certain risks and uncertainties. The
significant changes to the royalty regime require new
legislation, changes to the existing legislation and regulation
and development of proprietary software to support the
calculation and collection of royalties. Additionally, certain
proposed changes contemplate further public
and/or
industry consultation. Finally, the proposed royalty structure
may be modified prior to its implementation.
We believe this proposal would reduce future earnings and cash
flows from our oil and gas properties located in Alberta.
Additionally, assuming all other factors are equal, higher
royalty rates would likely result in lower levels of capital
investment in Alberta relative to our other areas of operations.
However, the magnitude of the potential impact, which will
depend on the final form of enacted legislation and other
factors that impact the relative expected economic returns of
capital projects, cannot be reasonably estimated at this time.
Royalties and Incentives in Canada The royalty system in Canada is a significant factor in the profitability of oil and natural gas production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the parties. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, with the royalty rate dependent in part upon prescribed
Table of Contentsreference prices, well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the federal and provincial governments of Canada have also established incentive programs such as royalty rate reductions, royalty holidays and tax credits for the purpose of encouraging oil and gas exploration or enhanced recovery projects. These incentives generally have the effect of increasing our revenues, earnings and cash flow. On October 25, 2007, the provincial government of Alberta announced a new royalty regime. The new regime contemplates the introduction of new royalties for conventional oil, natural gas, NGL and bitumen production effective January 1, 2009. The royalties will be linked to price and production levels and will apply to both new and existing conventional oil and gas activities and oil sands projects. The implementation of the proposed changes to the royalty regime in Alberta is subject to certain risks and uncertainties. The significant changes to the royalty regime require new legislation, changes to the existing legislation and regulation and development of proprietary software to support the calculation and collection of royalties. Additionally, certain proposed changes contemplate further public and/or industry consultation. Finally, the proposed royalty structure may be modified prior to its implementation. We believe this proposal would reduce future earnings and cash flows from our oil and gas properties located in Alberta. Additionally, assuming all other factors are equal, higher royalty rates would likely result in lower levels of capital investment in Alberta relative to our other areas of operations. However, the magnitude of the potential impact, which will depend on the final form of enacted legislation and other factors that impact the relative expected economic returns of capital projects, cannot be reasonably estimated at this time. These excerpts taken from the DVN 10-K filed Feb 28, 2008. Royalties
and Incentives in Canada
The royalty system in Canada is a significant factor in the
profitability of oil and natural gas production. Royalties
payable on production from lands other than Crown lands are
determined by negotiations between the parties. Crown royalties
are determined by government regulation and are generally
calculated as a percentage of the value of the gross production,
with the royalty rate dependent in part upon prescribed
Table of Contents
reference prices, well productivity, geographical location,
field discovery date and the type and quality of the petroleum
product produced. From time to time, the federal and provincial
governments of Canada have also established incentive programs
such as royalty rate reductions, royalty holidays and tax
credits for the purpose of encouraging oil and gas exploration
or enhanced recovery projects. These incentives generally have
the effect of increasing our revenues, earnings and cash flow.
On October 25, 2007, the provincial government of Alberta
announced a new royalty regime. The new regime contemplates the
introduction of new royalties for conventional oil, natural gas,
NGL and bitumen production effective January 1, 2009. The
royalties will be linked to price and production levels and will
apply to both new and existing conventional oil and gas
activities and oil sands projects.
The implementation of the proposed changes to the royalty regime
in Alberta is subject to certain risks and uncertainties. The
significant changes to the royalty regime require new
legislation, changes to the existing legislation and regulation
and development of proprietary software to support the
calculation and collection of royalties. Additionally, certain
proposed changes contemplate further public
and/or
industry consultation. Finally, the proposed royalty structure
may be modified prior to its implementation.
We believe this proposal would reduce future earnings and cash
flows from our oil and gas properties located in Alberta.
Additionally, assuming all other factors are equal, higher
royalty rates would likely result in lower levels of capital
investment in Alberta relative to our other areas of operations.
However, the magnitude of the potential impact, which will
depend on the final form of enacted legislation and other
factors that impact the relative expected economic returns of
capital projects, cannot be reasonably estimated at this time.
Royalties and Incentives in Canada The royalty system in Canada is a significant factor in the profitability of oil and natural gas production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the parties. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, with the royalty rate dependent in part upon prescribed
Table of Contentsreference prices, well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the federal and provincial governments of Canada have also established incentive programs such as royalty rate reductions, royalty holidays and tax credits for the purpose of encouraging oil and gas exploration or enhanced recovery projects. These incentives generally have the effect of increasing our revenues, earnings and cash flow. On October 25, 2007, the provincial government of Alberta announced a new royalty regime. The new regime contemplates the introduction of new royalties for conventional oil, natural gas, NGL and bitumen production effective January 1, 2009. The royalties will be linked to price and production levels and will apply to both new and existing conventional oil and gas activities and oil sands projects. The implementation of the proposed changes to the royalty regime in Alberta is subject to certain risks and uncertainties. The significant changes to the royalty regime require new legislation, changes to the existing legislation and regulation and development of proprietary software to support the calculation and collection of royalties. Additionally, certain proposed changes contemplate further public and/or industry consultation. Finally, the proposed royalty structure may be modified prior to its implementation. We believe this proposal would reduce future earnings and cash flows from our oil and gas properties located in Alberta. Additionally, assuming all other factors are equal, higher royalty rates would likely result in lower levels of capital investment in Alberta relative to our other areas of operations. However, the magnitude of the potential impact, which will depend on the final form of enacted legislation and other factors that impact the relative expected economic returns of capital projects, cannot be reasonably estimated at this time. This excerpt taken from the DVN 10-K filed Feb 28, 2007. Royalties
and Incentives in Canada
The royalty system in Canada is a significant factor in the
profitability of oil and natural gas production. Royalties
payable on production from lands other than Crown lands are
determined by negotiations between the parties. Crown royalties
are determined by government regulation and are generally
calculated as a percentage of the value of the gross production,
with the royalty rate dependent in part upon prescribed
reference prices, well productivity, geographical location,
field discovery date and the type and quality of the petroleum
product produced. From time to time, the federal and provincial
governments of Canada have also established incentive programs
such as royalty rate reductions, royalty holidays and tax
credits for the purpose of encouraging oil and gas exploration
or enhanced recovery projects. These incentives generally have
the effect of increasing our revenues, earnings and cash flow.
| EXCERPTS ON THIS PAGE:
RELATED TOPICS for DVN: |
| |||||||
