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Low Productivity and Reactivation Oil Well Program

The 2025-26 Saskatchewan Budget introduced the Low Productivity and Reactivation Oil Well Program, a Crown royalty and freehold production tax volumetric drilling incentive for low-producing, suspended or inactive horizontal oil wells.

The Low Productivity and Reactivation Oil Well Program will apply to new horizontal sections drilled on existing low-producing, suspended and inactive horizontal wells between April 1, 2025, and March 31, 2029.

The program is administered under The Low Productivity and Reactivation Oil Well Program Regulations.

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

The program is effective from April 1, 2025, to March 31, 2029.

  • As of April 1, 2025, any horizontal well producing on average 50.0 m3 per month (10.5 barrels per day [bbls/d]) or less for 12 consecutive months on a pro-rated basis would be eligible. This includes wells that have been classified as suspended.
  • On an ongoing basis, after April 1, 2025, any horizontal well producing on average 50.0 m3 per month (10.5 bbls/d) or less for 24 consecutive months would be eligible.
  • Natural gas wells and natural gas production are not eligible for the program.
  • Qualifying wells require a minimum lateral length of 500 metres per new horizontal section.
  • Qualifying wells would receive 3,000 m3 in incentive volume per new horizontal section to a maximum additional incentive volume of 6,000 m3 per well. While producing the incentive volume, the oil well will pay a maximum Crown royalty rate of 2.5 per cent and 0 per cent Freehold Production Tax. This incentive volume would be in addition to the original incentive volume assigned to the well.
  • Where a new horizontal section is drilled, the royalty status of the existing low-productivity non-fourth tier well will be converted to fourth tier.
  • All qualifying horizontal sections must have drilling activity completed by March 31, 2029.
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2. How to Apply

To apply for an LPRP Application:

  1. Ensure you meet all eligibility requirements.
  2. Download and complete the Low Productivity and Reactivation Oil Well Program Application form.
  3. Log in to IRIS and complete the LPRP application process, attaching the above form to the application.
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3. Apply

IRIS Login
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4. Further Information

For additional information on the program, please review Information Circular (PR-IC14): Low Productivity and Reactivation Oil Well Program or contact petroleumroyalties@gov.sk.ca.

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