Client
One of Canada’s largest oil and gas companies manages significant Crown royalty obligations in Alberta and participates in a variety of royalty incentive programs.
Challenge
Like many large energy companies, our client had experience with in-house royalty professionals and occasionally engaged third-party advisors for specialized projects. However, the complexity of Crown royalty filings, incentive programs, and cost recovery opportunities presented an opportunity to uncover additional value through an independent review.
Solution
DMA reviewed the client’s internal Crown royalty filings, with a primary focus on Gas Cost Allowance (GCA) filings. The review also included oil sands end-of-period statements and other royalty incentive opportunities.
While the client’s filings were generally complete and efficiently managed, DMA identified opportunities to recover additional value. The team discovered eligible costs that had not been claimed or had been applied to the incorrect project. DMA also found that the Province of Alberta had denied the original royalty incentive application for several oil wells in error.
After reviewing the application, DMA appealed the denied wells to the Ministry of Energy and Minerals. Once the corrected information was received, the Ministry determined the client should have received the royalty credits that had previously been denied.
Result
DMA’s review helped our client recover nearly $3 million through corrected royalty incentive adjustments and additional eligible cost claims.
The engagement demonstrated the value of an independent review, even for companies with strong internal processes. By serving as an extension of the client’s tax and royalty team, DMA provided a second set of eyes that helped uncover savings opportunities that may have otherwise remained unrealized.
Before making any decision or taking any action based upon information contained on this website, you should consult with a DMA professional.