Gary Leach, executive director of Small Explorers and Producers Association of Canada, said he welcomed the change and said his group would be meeting with Alberta's deputy energy minister on Thursday to work out the details.
"We're pleased to see that the government has recognized that the junior sector here in Alberta needed some relief from the new royalty framework."
He said the transition rate option "will leave a little bit more in the pocket of the junior companies that they can use to invest in the province and put people back to work."
Alberta Liberal Leader Kevin Taft said the announcement reminds him of the 1980s, when the Alberta government rolled out a series of programs to help the energy sector.
"One of the things I take from this is that these guys are expecting the downturn to be sharper and deeper and longer than they're letting on," he said.
The announcement was the second in as many days to tinker with the new royalty framework, first announced in October of last year.
Late Tuesday, the Alberta government and Syncrude Canada Ltd., the world's largest oilsands operation, said they reached a new royalty agreement after more than a year of negotiations.
Since the operators of Syncrude and No. 2 oilsands producer Suncor Energy Inc. (TSX:SU) both had existing Crown agreements that lasted until 2015, the province had to negotiate new terms.
Under its deal, Syncrude will pay the base royalty rate of either 25 per cent of net bitumen-based revenues or one per cent of gross bitumen-based revenues, depending on which is greater.
It will pay an additional $975 million stretched over the 2010 to 2015 period, after which it will transition to the new royalty structure.
Under Suncor's royalty deal, announced Jan. 29, the company could pay about 20 per cent more in royalties from 2010 to 2016, after which it would convert to the new structure.
Syncrude is a joint venture between Canadian Oil Sands Trust (TSX:COS.UN), Imperial Oil Ltd. (TSX:IMO), Petro-Canada(TSX:PCA), Nexen Inc. (TSX:NXY), ConcoPhillips, Mocal Energy Ltd. and Murphy Oil Company Ltd.
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