New Brunswick's new natural gas royalty plan: 4% til profit, then 25%

Canadian Press, The Canadian Press
1 Comment| November 4, 2013


FREDERICTON - New Brunswick's energy minister has released a new royalty plan for natural gas that he says will encourage exploration and give the province a greater share of profits.
 
Craig Leonard says under the new plan, companies will pay a four per cent royalty based on the cost of a wellhead until a company pays off its capital costs and starts making a profit.
 
Leonard says at that point, the royalty jumps to 25 per cent of the well's profits.
 
He says the previous royalty structure, whereby the province received up to 10 per cent of the costs of a wellhead, was not good enough for the industry or the government.
 
A spokesman for Leonard says the regulatory changes are expected to take effect in the next few months.
 
The release of the new royalty regime comes amid a growing tide of opposition to shale gas development.
 
Leonard says the province will now begin work on a revenue-sharing formula to determine how much of the 25 per cent royalty fee will go to landowners and First Nations.

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goldenfitness
4% until profit? Who decides when the Company makes a profit.
3.5 stars
November 5, 2013
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