I would like some clarification on the calculation for statutory interest on royalties not paid within 180 days of first production. For example, if a well has first production on Dec.1, 2018, and first royalty paid on July 1, 2019, would the interest be calculated for each month of production until actual payment ? For example, December royalty x 12%pa x 7months + Jan royalty x12% x 6 months and so forth for each month through April or through May or is there different method?
Tom: I am assuming your “pa” is per annum, so yes, your calculation is correct. In other works, take the December revenue X 1%; January revenue X 1%, etc.
Yes. pa is per annum so 1% is correct assuming a 365 day year basis. Thanks for the reply.