Overdue Oil & Natural Gas Royalties & Tax
You must pay all invoiced amounts by the payment due date or your account will become overdue and be subject to interest.
Your royalties become overdue when:
- You owe a balance in your royalty account after the due date
- You owe a balance in your deemed royalty account after the due date
- Your royalties for any previous production months have been adjusted because:
- you have filed an amended report or information increasing the royalty for that period
- your well’s royalty incentives or allowances were changed
- you have received an assessment from us because of a validation amendment or audit
Collection action may be taken on overdue accounts. By law, any amount invoiced to you is due and owing.
If you disagree with an amount invoiced to you, contact your royalty analyst to discuss your concerns. If your concern is not resolved, you may be able to request a reconsideration. You cannot request a reconsideration of interest alone. If an invoice is subsequently reduced, the amount is returned to you or credited to your account, with refund interest if applicable.
Interest is charged monthly on all overdue amounts.
Interest starts to accrue the day after the payment due date until the amount is paid.
You are issued a Statement of Account (SOFA) showing the interest if the overdue amount is not fully paid by the 23rd of the following month (the interest cycle date).
Interest is set at an annual rate fixed for each quarterly period on:
- January 1
- April 1
- July 1
- October 1
Each quarter the rate of interest is set at 3% above the prime lending rate of our principal banker for the quarter.
Interest on penalties
If you are assessed a penalty, you are not charged interest on the penalty if paid in full and on time. However, if the penalty amount is not paid on time, interest is charged on the outstanding balance from the payment due date and shown on your next Statement of Account.
Interest on amended production periods
If you amend your royalty for a prior period, prior period interest is assessed based on the number of days from the original payment due date to the invoice date for the amendment.
If you are issued an assessment as the result of an audit or validation review, interest is assessed as a lump-sum amount.
Any additional royalty or penalty is considered due on the original payment due date for that period.
Interest on deemed royalties
Deemed royalties are reversed when the imbalance that caused the assessment is fully corrected.
Refund interest is not awarded on the reversal of a deemed royalty. However, any accrued interest on an overdue deemed royalty balance will continue to remain outstanding.