CALIBRADO DEL EQUIPO PARA LAS PRUEBAS DE EMISIONES POR DE EVAPORACIÓN

Cutoff

This is the average daily rate of raw gas production in 103_m3

below which production related reductions in the royalty rate take effect for each well event. Possible rates are 60.0 for ultra- marginal well events, 25.0 for marginal well events, 17.0 for coalbed methane well events, and 5.0 for all other gas well events.

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GAS ROYALTY OR TAX INVOICE cont’d Base Royalty

Rate (%)

This is the basic royalty rate for each well event before

production related reductions, if any. The base royalty rate for each well event depends on the Class Base Rate and the

Reference Price as follows

CONS-C: Crown Land: Conservation

400 + 15 (Reference Price - 50) , minimum 8 % Reference Price

15-C: Crown Land: Non-conservation, Base 15

750 + 25 (Reference Price - 50) , minimum 15 % Reference Price

12-C: Crown Land: Non-conservation, Base 12

12 × Select Price + 40 (Reference Price - Select Price) , minimum 12% Reference Price maximum 27 %

9-C: Crown Land: Non-conservation, Base 9

9 × Select Price + 40 (Reference Price - Select Price) , minimum 9 % Reference Price maximum 27 %

CONS-F: Freehold Land: Conservation

245 + 9 (Reference Price - 50) , minimum 9 % Reference Price

Fhld: Freehold Land: Non-conservation

460 + 15 (Reference Price - 50) , minimum 5 %

Reference Price

Royalty Rate Reduction Factor

If the Average Daily Production for a well event during the Production Period is less than the Daily Volume Cutoff for the well event, the Base Royalty Rate is reduced by this factor times the Base Royalty Rate (%). These factors have a value  0 and  1. They are determined as follows:

• Ultra-marginal well events:

( ( 60 - Average Daily Production ) / 60 ) 2

• Marginal well events:

( ( 25 - Average Daily Production ) / 25 ) 2

• Coalbed methane well events:

( ( 17 - Average Daily Production ) / 17 ) 2

• All other gas well events (low productivity well events) ( ( 5 - Average Daily Production ) / 5 ) 2

Royalty Rate Reduction

This is the production related reductions, if any, from the basic royalty rate for each well event. The reduction for a well event is equal to Base Royalty Rate x Royalty Rate Reduction Factor for the well event.

Net Royalty Rate

For each well event, this is equal to the Base Royalty Rate -

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Batch Number This is a number assigned by the ministry to the batch of BC08

reports that included the BC08 on which the royalty calculations for the well event were based.

Entry Date- Time

This is the date and time that the BC08 report on which the royalty calculations for the well event were based was submitted. For BC08 reports that are created with the Excel file provided by the ministry, this is the date and time at which the submit button was clicked to create the CSV file. For BC08 reports that are submitted using the online BC08 screen on the ministry’s

website, this is the date and time at which the submit button was clicked. The date is in year/month/day format. The time uses the 24:00 hour format to the nearest one hundredth of a second.

D. DEEP WELL BANK CALCULATION SCHEDULE

The Deep Well Bank Calculation schedule [Sample 7.1(6)and Sample 7.1(6a)] provides information that was used in calculating the available balance in the deep well bank for qualifying well events. This schedule is not relevant for PE invoices. (i) Header:

The top of each schedule provides the name and code of the Royalty Payer whose deep well banks are listed on the schedule.

(ii) Deep Well Bank Calculation Details:

WA Number This is the 5-digit Well Authorization code assigned by the Oil &

Gas Commission to its permit for each deep well. Although a well may have more than one well event that qualifies as deep, there can be only one deep well bank for a well. The deep well bank is determined by the deepest of the qualifying deep well events in the well.

Unique Well Identifier

For each deep well in which the royalty payer has an interest, this is the 16-digit identifier for the deepest deep well event. The initial deep well bank for each well is based on the deep well depth of this well event.

Initial WA Bank

For each deep well, this is the full amount of deep well deduction that was initially available for the well, as calculated by the ministry. This amount is allocated to royalty payers in proportion to their ownership interests in the well event identified by the

Unique Well Identifier. To understand how this is calculated,

see section 5.9 of this Handbook.

Payor % Interest

For each deep well, this is the Royalty Payer’s ownership interest in the Unique Well Identifier in the month in which it began producing. This is obtained from ownership interests reported to the ministry on BC12 Reporting Interest Statements.

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Bank

For each deep well, this is the initial amount of deep well

deduction that was available to the Royalty Payer. This is equal to the Initial WA Bank x Payor % Interest.

Prodn Period For each deep well, these are the production periods to which

the Opening and Closing Balance, Transfers, and Deep

Deduction relate. The production periods that are listed. Opening

Balance

For each production period for a deep well event, this is the balance that was available at the beginning of the production period for deduction by the Royalty Payer from royalties payable on production from deep well events in the well. This is equal to the Initial Client-Bank + Transfers In - Transfers Out - Deep

Deductions in all previous production periods.

Transfers In These are deep well deductions that have been obtained by the

Royalty Payer in each production period as a result of acquiring an interest in the well event identified by the Unique Well

Identifier from a royalty payer for whom there was a balance

available for deduction at the time of the acquisition. The amount transferred in for a well is equal to the other royalty payer’s closing balance at the end of the previous production period times the proportion of the other royalty payer’s interest that was acquired.

Transfers Out These are the balances of deep well deductions that have been

transferred to another royalty payer in each production period as a result of disposing of an interest in the well event identified by the Unique Well Identifier. The amount transferred out for a well is equal to the Royalty Payer’s closing balance at the end of the previous production period times the proportion of the

Royalty Payer’s interest that was disposed of.

Potential Deep Deduction (Column 1)

This is the amount of Gross Royalties less PCOS on the gas royalty invoice. It is equal to Column 1 on the gas invoice. This amount represents the maximum deep well bank deduction for the well event in the production period.

Deferred Deep Deduction (Column 2)

This amount is equal to the amount of minimum royalty that has been charged on the invoice. It is equal to Column 2 on the gas royalty invoice.

Actual Deep Deduction (Column 3)

This amount is the difference between the Potential Deep Deduction (Column 1) and the Deferred Deep Deduction (Column 2). It is noted that where this amount is negative, the result of deducting a negative number from the deep bank is to

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Deduction

These are the amounts deducted form royalties payable on gas produced in each production period. They will equal the sum of the Deep Well Deduction amounts for all deep well events in the well on the Non-PE Invoice Details for the production period. Well events in the same well can be identified on the

Non-PE Invoice Details by a common WA#. Closing

Balance

For each production period for a deep well event, this is the balance that was available for deduction by the Royalty Payer at the end of the production period. This is equal to the Opening

Balance + Transfers In - Transfers Out - Actual Deep Deduction for the production period.