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High Water-Cut Oil Well Program

The High Water-Cut Oil Well Program (HWCP) has been amended, renewed, and modernized, with all updates taking effect on April 1, 2026. The application process has now been streamlined into a single, unified process, making it easier for applicants to prepare and submit their information.

The HWCP provides a royalty status reassignment for qualifying high-water-cut oil wells that demonstrate an average minimum investment of $30,000 per well. Investments must directly improve water-handling capabilities and extend the oil well's producing life.

  1. Guidance
  2. Eligibility
  3. How to Apply
  4. Apply
  5. Further Information
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1. Guidance

The high water-cut oil well program is administered under The High Water-Cut Oil Well Program Regulations. (Available Spring 2026)

Through the program, oil wells producing large volumes of water will receive a royalty status re-assignment based on their finished drilling date after the application has been approved:

  • Oil wells drilled prior to October 1, 2002, will receive Fourth-Tier Royalties on their incremental high water-cut oil; and
  • Oil wells drilled on or after October 1, 2002, will receive a 2 per cent royalty rate deduction on all oil produced.
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2. Eligibility

  1. Eligible oil wells (vertical and horizontal) include individual oil wells or a group of oil wells that produce oil at an average water cut of 90% or greater for the most recent three months reported with hours on production, before the qualifying applicant submits an application to the program.
  2. Qualifying Investments – the qualifying investment must be directly related to a high water-cut oil well, or its associated facility, for the purpose of improving water handling capability and extending the production life of the well. Normal repair and maintenance activities are ineligible.
  3. Minimum Investment – the qualifying investment must be a minimum of $30,000 per qualifying high water-cut oil well.
  4. Qualifying applications for projects completed on or after April 1, 2026, with all associated investments made within one calendar year of the project completion date, will be recognized.
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3. How to Apply

To apply for the HWCP:

  1. Complete the High Water-Cut Application and the Well List and Investment Summary (Appendix A) forms.

  2. Log into IRIS and complete a submission under the high-water cut oil well application by attaching the High Water-Cut Application and the Well List and Investment Summary forms.
  3. The Ministry reviews the information, approves eligible applications and assigns an incremental high water-cut oil factor and the royalty status re-assignment, if applicable.

New application forms are required as of April 1, 2026. The Ministry will still accept Qualifying Investment applications for previously approved Initial Applications until March 31, 2027.

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4. Apply

Log in to IRIS

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5. Further Information

For additional information on the program, please review Information Circular (PR-IC12): High Water-Cut Oil Well Program or contact petroleumroyalties@gov.sk.ca.