Basic Conventional Oil Royalty Calculator (pre Jan 2009)

Before using this calculator please read the Department of Energy disclaimer.

The Crown receives a portion of the oil production from the companies who extract and market the resource. These revenues help to keep Alberta's overall taxes low, and are critical to the delivery of public programs, such as health and education. This Basic Conventional Oil Royalty Calculator is a tool to help you understand how basic conventional oil royalties are calculated and can assist you to calculate at a well level, the royalty payable to the Crown.

Basic Conventional Oil Royalties are based on the price of oil (R-Multiplier) times the amount of production (S) times the Crown's interest in the well (C).

Royalty payable = Price X Production x Crown Interest

Price (R-Multiplier)
Each month the Oil Business Unit of the Department of Energy releases an Information Letter containing the information required to calculate the R-Multiplier for the month. Enter below the appropriate Par Price, Select Price, and Royalty-Factor from the Information Letter. Ensure you select the correct density (heavy or non-heavy), month/year, and vintage (old, new, third tier) of the oil. For assistance, contact the Oil Development Business Unit.
             
 
1. Enter Par Price                    
 $  (9999.99)
   
 
2. Enter Select Price          
 $ (9999.99)
        
 
3. Enter Royalty-Factor
    (9999.99)
        
                   
 
4.
 
  x   [
(
-
)
/
] + 1
   
Royalty Factor
 
Par Price
 
 Select Price  
Par Price
  
     
 
R-Multiplier 
= 
 
    *Verify the R-Multiplier as published on the Information Letter. If the R-Multiplier in this calculator does not match the R-Multiplier in the Information Letter, enter the Information Letter's R-Multiplier here:
 

Note: Effective July 1995, the royalty rate for new vintage heavy oil will be capped at the new non-heavy oil royalty rate. This means that new heavy oil will never deliver more royalty than new non-heavy oil. Therefore, the new heavy Royalty-Factor is adjusted on the Information Letter published by the Department so that the new heavy R-Multiplier is equal to the new non-heavy R-Multiplier.

Production (S)
(S) is the production sensitive portion of the royalty formula.
     
  5. Enter the well's production:     (99999.9)
 
6. Select the well's vintage:
 

 
Old
New
Third Tier
<20 m3
 
  
No Oil Royalty payable
<190.7 m3
(Production X Production) / 2755.04
(Production X Production) / 2755.04
(Production - 20m³)² / 2207.46
≥ 190.7 m3
13.2m³ + [(Production - 190.7) X 0.115385]
13.2m³ + [(Production - 190.7) X 0.115385]
13.2m³ + [(Production - 190.7m³) X 0.115385]
Note: 'S' is rounded to five decimal places.
  7.  
 
Production (S) 
=  m³

Crown's Interest (C)
(C) is the Crown's interest for the well.
   
  8. Enter the Crown's interest for the well:
 
Crown percent (C) 
=  % (999.999999)

Royalty Volume (m3)

The royalty volume is based on the price of oil (R-Multiplier) times the amount of production (S) times the Crown's interest in the well (C).
Royalty payable = (R-Multiplier) X (S) X (C)
   
  9.
 
Royalty payable   
=    X
m³
X    %
         Price (R-Multiplier)
Production (S) 
     Crown's Interest (C)  
 
=  m³
 
10. Truncate to 6 decimals
 =  m³
  11. Round to one decimal  
 
Volume to be delivered    
=  m³

Last reviewed/revised: 2008-08-27