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NET ROYALTY TRUSTS

Net Royalty Trusts were common in areas where companies were exploring for Alberta’s first oil production, Turner Valley and Leduc. These Net Royalty Trusts were set up by oil companies seeking financing to drill wells as early as the 1920s. The units were sold in very small fractions to hundreds of individuals. The proceeds were used to drill a well, which if successful, would result in payment of a share of revenues to the trust, net of capital costs, operating expenses, crown royalties and or mineral taxes.