The Multi-lateral Oil Well Program Regulations, established under The Crown Minerals Act and The Freehold Oil and Gas Production Act, 2010, govern the application process and incentives for multi-lateral oil wells in Saskatchewan. This regulatory framework is designed to promote the exploration and development of oil resources through multi-lateral drilling techniques. The regulations define several key terms essential for understanding their application, including “applicant,” which refers to a licensee under The Oil and Gas Conservation Act or any person approved by the minister. A “multi-lateral oil well” is described as a horizontal well with more than two laterals that is not part of an Enhanced Oil Recovery (EOR) project, while a “lateral” is defined as a horizontal section exceeding 200 meters in length. The term “kick-off point” designates the point where drilling shifts to create subsequent horizontal wellbores. These definitions ensure clarity in the interpretation and implementation of the regulations, facilitating a streamlined process for stakeholders involved in oil production.

The Multi-lateral Oil Well Program is established to support the development of multi-lateral wells, with the minister administering the program and overseeing applications and approvals related to the incentives offered for drilling these wells. Applicants may seek incentives for multi-lateral oil wells by submitting a completed application containing required information. The well must have a finished drilling date between April 1, 2024, and April 1, 2028. The minister has the authority to approve or refuse the application based on public interest and compliance with the regulations, and if the application is refused, the minister must provide written reasons. Additionally, applicants can apply for appraisal multi-lateral oil well approval, which requires identifying the location of the appraisal well and at least ten additional wells on contiguous mineral lands. The approval processes for both types of applications are similar, with the stipulation that the appraisal well must be the first drilled within the specified lands. The regulations impose strict timelines and conditions for drilling, mandating that applications be made before drilling commences.

Upon approval of an application, the minister will grant one multi-lateral oil well incentive based on the well’s configuration as of its production date. This incentive aims to improve the viability and economic feasibility of multi-lateral drilling projects. The regulations also specify how royalties and taxes will be calculated for oil produced from approved multi-lateral wells. For oil allocated to Crown lands, royalties will adhere to The Crown Oil and Gas Royalty Regulations, 2012, classifying the oil as fourth tier, with a maximum royalty rate of 2.5%. For freehold lands, similar tax regulations apply, ensuring the production tax is calculated according to The Freehold Oil and Gas Production Tax Regulations, 2012.

By establishing clear application processes, defining key terms, and outlining incentives and tax calculations, these regulations seek to support sustainable oil production and resource management in the province.

Saskatchewan (OIC 191/2024) May 3, 2024