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Multi-lateral Oil Well Program (MLWP)

Program Update: The Multi-lateral Oil Well Program (MLWP) was announced as part of Budget 2024-25, released on March 20, 2024. The Ministry of Energy and Resources has released an Information Circular containing details of the program, including how to apply. Effective April 1, 2024, the program will be administered in accordance with the Multi-lateral Oil Well Program Regulations and the accompanying Information Circular PR-IC03A: Multi-lateral Oil Well Program.

The Multi-lateral Oil Well Program (MLWP) offers an additional volumetric drilling incentive for eligible multi-lateral horizontal oil wells (MLWs) drilled on or after April 1, 2024, and on or before March 31, 2028. The amount of additional volumetric incentive provided depends on the number of laterals drilled.

The new generation of multi-lateral wells are considered an evolution in drilling in Canada and can be drilled in multiple configurations to better access more of the oil reservoir, which increases the well’s recovery factor, reduces drilling costs and improves reservoir management. They also reduce the number of surface leases and facilities required, making oil production and the capture of associated natural gas more economic.

The MLWP is administered by the Ministry of Energy and Resources.

  1. Guidance
  2. Eligibility
  3. How to Apply
  4. Further Information
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1. Guidance

The Multi-Lateral Oil Well program will be administered under The Multi-Lateral Oil Well Program Regulations (available Spring 2024).

Through the program, newly drilled MLWs will receive a volumetric incentive based on their finished drilling date and their final as-drilled configuration. The amount of the volumetric incentive received by the well will be dependent on the well configuration, the number of laterals drilled and the type of MLW.  The Ministry will accept applications to approve certain MLWs as an Appraisal MLW and, if approved, assign an Appraisal MLW incentive. Appraisal MLWs would be the first MLW in a defined geographic area, or oil pool, and be used to prove the effectiveness of MLW development in an oil pool or area and, as such, be considered higher risk. Each Appraisal MLW would be required to prove the drilling of additional MLWs of a similar configuration.

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2. Eligibility

  1. Eligible oil wells include MLWs drilled on or after April 1, 2024, and on or before March 31, 2028.
  2. If the MLW is of a pitchfork configuration, or a variation of the pitchfork configuration, the well must contain a minimum of three laterals, including the initial wellbore, of 500 metres or longer to qualify for additional volumetric incentive.
  3. If the MLW is of a fishbone configuration, or a variation of a fishbone configuration, the well must contain a minimum of ten additional laterals, off the main wellbore, of at least 200 metres in length to qualify for an additional volumetric incentive.
Development Multi-Lateral Wells (Pitchfork)
Non-Deep   Deep
  Total Incentive Volume (m3)     Total Incentive Volume (m3)
1 Leg 6,000   1 Leg 16,000
2 Leg 6,000 2 Leg 16,000
3 Leg 8,000 3 Leg 17,000
4 Leg 12,000 4 Leg 19,000
5 Leg + 16,000 5 Leg + 21,000
Development Multi-Lateral Wells (Fishbone)
Non-Deep   Deep
  Total Incentive Volume (m3)   Total Incentive Volume (m3)
1 - 9 Leg 6,000 1 - 9 Leg 16,000
10 Leg + 16,000 10 Leg + 21,000
Appraisal Multi-Lateral Wells (Pitchfork)
Non-Deep   Deep
  Total Incentive Volume (m3)   Total Incentive Volume (m3)
1 Leg 6,000 1 Leg 16,000
2 Leg 6,000 2 Leg 16,000
3 Leg 12,000 3 Leg 21,250
4 Leg 18,000 4 Leg 23,750
5 Leg + 24,000 5 Leg + 26,250
Appraisal Multi-Lateral Wells (Fishbone)
Non-Deep   Deep
  Total Incentive Volume (m3)   Total Incentive Volume (m3)
1 - 9 Leg 6,000 1 - 9 Leg 16,000
10 Leg + 24,000 10 Leg + 26,250
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3. How to Apply

To apply, there are two different types of applications for the program. Both application types are to be submitted to petroleumroyalties@gov.sk.ca.

  1. Development Wells
    • Applications must include the well location (UWI), licence number and number of laterals.
    • Development MLW applications can be submitted before or after drilling is completed.
    • If the ministry reviews a drilling plan prior to drilling, the final volumetric incentive provided will be based on the final drilled well configuration.
  2. Appraisal Wells
    • All Appraisal MLWs must be approved prior to drilling.
    • A maximum of one appraisal MLW is designated per plan.
    • A minimum of 10 MLWs, each of which contain 5 laterals or more, must be drilled as part of the Plan.
    • The plan contains contiguous tracts of mineral lands in the same stratigraphic zone.
    • The area subject to the plan cannot contain an existing MLW, that is 5 laterals or more, in the same stratigraphic unit, whether or not that well is owned or operated by the company submitting the plan.
    • The approved Appraisal MLW, and all associated wells, must be drilled within a specified timeline (TBD) of the plan’s approval.
    • Failure to adhere to the conditions of the approval may result in loss of the appraisal well status, which will then be designated a non-appraisal MLW.
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4. Further Information

For additional information on the program, please review PR-IC03A Multi-lateral Oil Well Incentive Program or contact petroleumroyalties@gov.sk.ca.

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