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Non-refundable credits on amended periods

Last updated on June 30, 2026

Non-refundable credits are incentives for producers of oil and natural gas to encourage operational activity and investment in infrastructure, clean infrastructure, and clean growth infrastructure. If your company has received a credit under an Oil and Natural Gas Royalty Program, it may be applied to offset royalties due.

Non-refundable credits and payments are applied to amended royalties in this order:

  1. On-time payments (payments available by the due date)
  2. On-time non-refundable credits (oldest credit available prior to the due date)
  3. Late payments (payments made after the due date)
  4. Late non-refundable credits (oldest credit available after the due date)

Note: If both payments and non-refundable credits are late, we will apply them in the order they became available.

Amendments to a period will result in payments and non-refundable credits for that period being re-evaluated and applied based on the above rules starting with the oldest period being amended.

Increased royalty due

If a prior period is amended and your royalty due increases, non-refundable credits that were in effect at the original due date of the royalty, and are still available at the time of your amendment, will automatically be applied against the additional royalty amount. As a result, if the non-refundable credits are sufficient to cover the increase in royalty, no payment is required.

Example

Assume you amend your January 2025 production month for gas on March 2, 2026, and you have non-refundable credits to offset the additional amount due (the non-refundable credit was granted to you on or before March 31, 2025):

  • The non-refundable credits available in March 2026 are automatically applied against your additional royalty due. Any credits previously applied against months after January 2025 are not changed or impacted
  • If you do not have enough credits to cover the full amount of additional royalty due, interest is charged on the outstanding amounts from the January 2025 production period's original due date (March 31, 2025). However, if an additional infrastructure credit was granted after March 31, 2025, and is still available by March 2026, the credit is used to offset your outstanding balance, and interest is charged from the payment due date to the date when the credit was granted

Decreased royalty due

If a prior period is amended and your royalty due decreases, and non-refundable credits were applied to offset the entire royalty, your non-refundable credit balance will increase based on the amount of credit used to reduce the royalty for that period.

If a prior period is amended and your royalty due decreases, and non-refundable credits were applied to reduce some but not all of the royalty, your non-refundable credit balance increases by the amount of credit that had been previously applied. If the amendment results in an overpayment, it will offset the oldest debt within the oldest period first. If there is no debt, your account remains in a credit position until new debt is due.

Example

Assume you amend your January 2025 production month for gas, on March 2, 2026. The original royalty was due on March 31, 2025:

  • If you reduced your royalty to zero using your non-refundable credit, your credits are returned to your non-refundable credit account and become available to offset royalty debt
  • If your January 2025 royalties were partially reduced from the use of your non-refundable credits, your credits are returned to your non-refundable credit account first. If the decrease in royalty resulting from the amendment exceeds the non-refundable credit used for that period, the overpaid amount is credited to your account and applied to your oldest debt, as described above

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