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The Waterflood Development Program (WDP) offers repayable royalty/freehold production tax deferral for eligible wells that have been converted to injection wells or newly drilled injection wells for the purpose of waterflooding an oil reservoir.
Waterflooding is a secondary oil recovery technique that utilizes non-potable water for re-injection into the oil reservoir to restore reservoir pressure and sweep the oil to nearby producing wells. Waterflooding is a capital intensive undertaking and the time period before a response in the reservoir can be lengthy. As such, WDP is designed to help offset initial capital investments by providing a three-year repayable royalty credit for eligible waterflood injection wells.
To qualify for the WDP your company must be the licensee of an injection well that has first injected water on or after January 1, 2019, and before April 1, 2024, and is approved as part of a waterflood project pursuant to Section 17 of The Oil and Gas Conservation Act.
The applicant must also pass a financial stress test that consists of the following four measures:
Please refer to the Waterflood Development Program Information Circular for more information.
To apply for the WDP, companies need to complete and submit the WDP Application Form to PetroleumRoyalties@gov.sk.ca. If you have questions about the application process, refer to the Waterflood Development Information Circular or contact PetroleumRoyalties@gov.sk.ca.
The ministry will be accepting applications between December 1, 2019, and December 31, 2024.
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