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High Water-Cut Oil Well Program

This royalty/tax program is designed to extend the producing life and improve the recovery rates of high water-cut oil wells.


1. Guidance

The high water-cut oil well royalty/tax program is administered under The Crown Oil and Gas Royalty Regulations, 2012 and The Freehold Oil and Gas Production Tax Regulations, 2012.

Through the program, incremental high water-cut oil resulting from qualifying investments to rejuvenate eligible oil wells and/or associated facilities, receive third-tier oil Crown royalty/freehold production tax rates as well as a Saskatchewan Resource Credit (SRC) of:

  • 2.5% for oil produced before April 2013; and
  • 2.25% for oil produced on or after April 1, 2013.

2. Eligibility

Eligible oil wells (vertical or horizontal) include:

  • Individual oil wells or a group of oil wells that are currently producing conventional oil (non-EOR oil) and have produced at an average water-cut of 95% or greater during the last twelve producing calendar months immediately before making an application under the program.
  • Wells that are shut-in or suspended for twelve or more consecutive calendar months before making investments under the program. These wells must have produced at an average water-cut of 95% or greater during the last three producing months immediately before the well was shut-in or suspended.

The applicant must have an Integrated Resource Information System (IRIS) account and the appropriate permissions assigned by your IRIS Security Administrator.


3. How to Apply

To apply for the royalty/tax program for high water-cut oil wells:

  1. Log into IRIS and complete a submission under the high-water cut oil well application.
  2. The Ministry reviews the detailed information, and approves an incremental oil factor if eligible.
    • Companies are encouraged to start investments only after the Ministry has approved an incremental oil factor.

4. Apply