Alberta Modernized Royalty Framework C* Calculator

Alberta's Modernized Royalty Framework (effective for wells spud after Jan. 1, 2017 or early opt-in participants) emulates a revenue minus cost royalty structure across all hydrocarbons (oil, natural gas and non-project oil sands).

The Drilling and Completion Cost Allowance (C*), is a proxy for completed well costs. It is a calculated value based on vertical depth, lateral length and the amount of proppant placed. The same C* formula is used regardless of hydrocarbon target. It determines the allowable revenue after which individual well sites begin paying higher royalty rates.

A company will pay a flat royalty of 5% on a well’s early production until the well’s total revenue, from all hydrocarbon products, equals C*. Afterwards, the company will pay higher royalty rates (Post C*) that vary depending on the resource and reference price of the commodity. Royalty rates decrease to match declining production rates when the well reaches a maturity threshold.

This calculator is a tool to help you estimate C*. See About Royalties for more information.



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