Let’s talk about royalties: the continued uncertainty surrounding the creation and legal status of the overriding royalty

Since the Leduc No. 1 oil well was drilled in 1947, the petroleum and natural gas industry has grown to become a cornerstone of the Alberta economy and a major industry for the Canadian economy. The oil and gas industry is active in 12 of 13 Canadian provinces and territories, and Canada is the fifth-largest producer of natural gas and the sixth-largest producer of crude oil globally.

Royalties are central to the financing, development, and operation of oil and gas projects and other mineable resources in Canada. Traditionally, royalties allowed resource owners to participate in and reap the benefit of production from their properties, and also to raise funds to finance exploration and production activities.

This chapter was first published in the Alberta Law Review, Volume 57, Number 2. The full chapter with citations is available here.