"Compared to British Columbia, the Hungarian 12% royalty rate on unconventional gas is attractive. The going rate in B.C. is 19-20%. However, to boost exploration in B.C. the government is implementing a one year royalty-incentive for Drillers.

The Vancouver Sun

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The package includes four royalty-based incentives and two regulatory changes — all of which are intended to get more gas flowing out of the ground so B.C. can collect additional royalties to help offset a projected $500-million revenue shortfall in the current fiscal year.

Wells drilled from September 2009 through June 2010 will enjoy a one-year royalty rate of two per cent — compared to the average rate of about 19 or 20 per cent.

That would be a resource giveaway for a conventional gas well in Alberta — where the greatest volume of gas flows out in the initial months after a well is tapped, and the gas and royalty opportunities quickly ebb.

But in northeast B.C., where unconventional gas plays now dominate — particularly in booming new areas such as Horn River and Montney — the initial bump is comparatively modest and substantial gas volumes flow for anywhere from 15 to 30 years."