OK Canada, lets keep up with Montanas royalty rates

Granted this is 2010, but lets try to keep pace.

"There are some insightful takeaways from the interview. For instance, the royalty rates in Canada are much lower than in Montana. Mr. Wilson cites a 30% royalty rate in Montana, while in Canada initial royalty rates are on the order of 5% and as low as 2.5%. The impact these low rates have on economics is significant.

He brings up the point that the Alberta Bakken is light oil compared with the heavy oil of the Williston Basin Bakken. He throws out 35-42 degree API gravity. At 4,500′-6,000′, the depths are much shallower than the Williston. This results in much lower drilling costs, $4MM vs $7MM in North Dakota.

The Alberta Bakken is new and emerging therefore data is at a premium. I have a map of 2010 Montana permits below, histogrammed by operating company. There are two main clusters, the cluster in East MT is associated with the Williston Basin, while the cluster in Toole and Glacier counties are Alberta Bakken. "


And more recent for Saskatchawan- the government offers them some good incentives.

"On the royalty side on Crown lands, Saskatchewan has a royalty incentive where royalties are 2.5 per cent on the first essentially 36,000 barrels of oil," he notes. "There are very high netbacks given the oil price, low royalties and very reasonable operating costs."