Yukon Royalty Regime
The Oil and Gas Royalty Regulations 270 KB authorize the Government of Yukon to collect royalty for oil and gas recovered from Yukon oil and gas dispositions.
The Yukon royalty regime is based on an ad valorem structure with the objectives of transparency and simplicity of administration for both government and industry. Ad valorem means "according to the value". In Yukon, payable royalty is calculated using market values and costs.
Royalty clients are disposition holders and are responsible for the payment of royalty proportionate to that holder’s specified undivided interest in the disposition.
There is an initial period during which the royalty rate for crude oil and gas production is reduced for each well, subject to production thresholds.
Royalty rates are calculated for crude oil, gas, and field condensate based on formulas in the respective Parts in the regulations.
Prices and royalty allowances are prescribed by the Division Head of Oil and Gas Resources. Select Prices are set from time to time, while the par price and reference price is set for each production month. The Division Head also prescribes royalty allowances that are deducted from the royalty payable. Provisions are also made for gas injection credits and exemptions for gas consumed in operations or used as fuel for testing and production.