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Freehold Mineral Tax is levied on an annual basis in February of the year following the production year against the mineral certificate of title owners covering a portion of the land in the spacing unit of the production entity (PE). The tax is calculated on calendar year petroleum and/or natural gas production figures filed with the ERCB.
The tax formula used takes into consideration the amount of production, the hours of production, value of each unit of production (Unit Value), the tax rate, the percentages that the owners hold in the title and the percentages that the title and well(s) hold in the production entities being taxed.

The tax rates are .269 for oil and/or field condensate and .069 for gas and/or solution gas with reductions for low productivity wells. The first $1,600 of tax calculated on each of gas and oil is exempt from tax payment.