At any point in time, rent depends on the availability of information, market conditions, technology and the system of property rights used to govern access to and management of resources.
The calculation of the value of oil and gas royalties involves estimating future revenues based on recent production trends.
[7][8] In the United States, simple ownership of mineral rights is possible, and royalty payments to individuals are quite common.
Thus, the risks and profits are shared between the Government of Canada (as the owner of the resources) and the oil developer.
This attractive royalty rate is designed to incentivize oil and gas exploration in Canada's remote frontier areas, where costs and risks are higher than elsewhere.