The Government of Saskatchewan has introduced a new incentive program aimed at increasing oil production and generating investment by reactivating low-producing and inactive oil wells.
The Low Productivity and Reactivation Oil Well Program (LPRP), announced Monday, is designed to stimulate new oil production and revenue from existing horizontal wells by offering a modified royalty structure for eligible sites.
Energy and Resources Minister Colleen Young said the program reflects the province’s continued commitment to supporting its energy sector.
“Growing Saskatchewan’s oil and gas industry is a priority for our government,” Young said in a news release. “This new program will encourage companies to make new investments in existing assets and increase oil production in our province.”
The four-year program is projected to add up to 30,000 barrels of oil per day by its final year, with an estimated $21 million in additional royalty revenue for the province. The initiative also supports Saskatchewan’s Growth Plan goal of reaching 600,000 barrels per day in oil production.
According to the province, the LPRP will extend the life of previously drilled wells, allowing companies to access oil reserves that would otherwise go untapped. Officials also say the program will support environmental objectives by reducing the number of inactive wells and turning potential liabilities into productive assets.
John Jeffrey, CEO of Saturn Oil and Gas, called the program a “win-win” for industry, government and communities.
“The LPRP will spur increased production, activity and revenue for the province; reduce the inactive well count and create additional employment and investment opportunities,” said Jeffrey. “It has the added benefits of reducing inactive asset retirement obligations and improving environmental performance.”
In 2024, Saskatchewan’s oil and gas industry generated $13.5 billion in production value and supported more than 26,000 jobs. The province remains Canada’s second-largest oil producer and ranks sixth in onshore oil production across North America.
Details on eligibility and application procedures for the LPRP are available on the provincial government's website.