Quick answer
Main statute: Oil and Gas Rights Act, 765 ILCS 520/10.
| Topic | What the statute says | Citation |
|---|---|---|
| First payment deadline | On or before 150 days after the end of the month of first purchase | 765 ILCS 520/10(2)(a); 765 ILCS 520/10(1)(b) |
| Later payments | On the lease schedule; if none, 60 days (oil) or 90 days (gas) | 765 ILCS 520/10(2)(a); 765 ILCS 520/10(2)(a)(1); 765 ILCS 520/10(2)(a)(2) |
| Minimum payment and aggregation | May pay annually when $100 or less is owed | 765 ILCS 520/10(2)(b) |
| Interest on late payments | The New York Fed rate on loans to depository institutions | 765 ILCS 520/10(3)(a) |
| Suspense and withheld payments | No interest when withheld for a title dispute or title doubts | 765 ILCS 520/10(3)(b)(1)-(2); 765 ILCS 520/10(3)(b)(3) |
| Division orders | No statute found | — |
| Owner remedies, notice and attorney fees | Written notice first; payor has 30 days; suit in the county of the well | 765 ILCS 520/10(4)(a); 765 ILCS 520/10(4)(b); 765 ILCS 520/10(4)(c) |
| Check-stub disclosures | No statute found | — |
| Unclaimed royalties (escheat) | No royalty-specific period found; 3 years for business debts | 765 ILCS 1026/15-201(5); 765 ILCS 1026/15-201(15); 765 ILCS 1026/15-201 |
Proceeds from the sale of oil or gas production must be paid to each payee on or before 150 days after the end of the month of first purchase by a payor.
Proceeds must be paid to each payee on or before 150 days after the end of the month of first purchase by a payor. (765 ILCS 520/10(2)(a))
Statute text “The proceeds derived from the sale of oil or gas production from an oil or gas well must be paid to each payee on or before 150 days after the end of the month of first purchase by a payor.”
The 'payor' is the first purchaser, but the owner of the right to produce is deemed the payor if the first purchaser pays proceeds to that owner, who assumes responsibility for paying payees. (765 ILCS 520/10(1)(b))
Statute text “"Payor" means the first purchaser of production of oil or gas from an oil or gas well, but the owner of the right to produce under an oil or gas lease or pooling order is deemed to be the payor”
After the first payment, payments follow the frequency set in the lease or other written agreement. If none is specified, subsequent proceeds are due no later than 60 days after the end of the month of sale for oil and 90 days for gas.
After the first payment, payments must be made on a timely basis according to the frequency specified in a lease or other written agreement. (765 ILCS 520/10(2)(a))
Statute text “After that time, payments must be made to each payee on a timely basis according to the frequency of payment specified in a lease or other written agreement between payee and payor.”
If the lease or agreement does not specify timing, subsequent oil proceeds are due within 60 days after the end of the month of sale. (765 ILCS 520/10(2)(a)(1))
Statute text “If the lease or other agreement does not specify the time for payment, subsequent proceeds must be paid no later than: (1) 60 days after the end of the calendar month in which subsequent oil production is sold”
If not specified, subsequent gas proceeds are due within 90 days after the end of the month of sale. (765 ILCS 520/10(2)(a)(2))
Statute text “90 days after the end of the calendar month in which subsequent gas production is sold.”
If the total owed is $100 or less, payments may be remitted annually for the aggregate of up to 12 months of accumulated proceeds.
Payments may be remitted annually for up to 12 months' accumulated proceeds if the total owed is $100 or less. (765 ILCS 520/10(2)(b))
Statute text “Payments may be remitted to payees annually for the aggregate of up to 12 months' accumulation of proceeds, if the total amount owed is $100 or less.”
If payment is not made within the statutory time limits, the payor must pay interest from the expiration of those limits at the rate charged on loans to depository institutions by the New York Federal Reserve Bank, unless a written agreement sets a different rate; the interest rule does not apply where payment is withheld for the title reasons the statute lists (see suspense). The statute does not say whether interest is simple or compound.
Interest runs from the expiration of the time limits at the New York Federal Reserve Bank's rate on loans to depository institutions, unless a written agreement specifies a different rate. (765 ILCS 520/10(3)(a))
Statute text “If payment has not been made for any reason in the time limits specified in subsection (2)(a) of this Act, the payor must pay interest to a payee beginning at the expiration of those time limits at the rate charged on loans to depository institutions by the New York Federal Reserve Bank, unless a different rate of interest is specified in a written agreement between payor and payee.”
The interest requirement does not apply where payments are withheld or suspended because of a title dispute affecting distribution, a reasonable doubt that the payee has clear title, or an unsatisfied title-opinion requirement about the payee's title, identity or whereabouts after a reasonable request for curative information.
Interest does not apply where payments are withheld or suspended beyond the time limits because of a title dispute affecting distribution or reasonable doubt that the payee has clear title. (765 ILCS 520/10(3)(b)(1)-(2))
Statute text “Subsection (a) of this Section does not apply where payments are withheld or suspended by a payor beyond the time limits specified in subsection (2)(a) of this Act because there is: (1) a dispute concerning title that would affect distribution of payments; (2) a reasonable doubt that the payee does not have clear title to the interest in the proceeds of production”
Interest also does not apply where a title-opinion requirement placing in issue the payee's title, identity, or whereabouts has not been satisfied after a reasonable request for curative information. (765 ILCS 520/10(3)(b)(3))
Statute text “a requirement in a title opinion that places in issue the title, identity, or whereabouts of the payee and that has not been satisfied by the payee after a reasonable request for curative information has been made by the payor”
We found no Illinois statute governing division orders.
What we read: Read 765 ILCS 520 (Oil and Gas Rights Act, Secs. 0.01-10) in full and searched the full text of 225 ILCS 725 (Illinois Oil and Gas Act) for 'division order', 'royalt' and 'proceeds'; neither contains a division-order provision. A government-source search of Illinois law (ilga.gov) for division orders returned no provision. Sources read: 765 ILCS 520 - Oil and Gas Rights Act (full act); 225 ILCS 725 - Illinois Oil and Gas Act (full act).
Before suing for nonpayment, a payee must give the payor written notice by mail. The payor then has 30 days after receipt to pay or to state in writing a reasonable cause for nonpayment. The payee has a cause of action for nonpayment of proceeds or interest in a court in the county where the well is located. The section provides no attorney-fee or penalty provision.
Written notice by mail to the payor is a prerequisite to judicial action for nonpayment. (765 ILCS 520/10(4)(a))
Statute text “the payee must give the payor written notice by mail of that failure as a prerequisite to beginning judicial action against the payor for nonpayment”
The payor has 30 days after receipt of the notice to pay or to state in writing a reasonable cause for nonpayment. (765 ILCS 520/10(4)(b))
Statute text “The payor has 30 days after receipt of the required notice from the payee in which to pay the proceeds due, or to respond by stating in writing a reasonable cause for nonpayment.”
The payee may sue for nonpayment of proceeds or interest in any court of competent jurisdiction in the county where the well is located. (765 ILCS 520/10(4)(c))
Statute text “A payee has a cause of action for nonpayment of oil or gas proceeds or interest on those proceeds as required in Section (2) or (3) of this Act in any court of competent jurisdiction in the county in which the oil or gas well is located.”
We found no Illinois statute requiring specific disclosures on royalty check stubs or payment statements.
What we read: Read 765 ILCS 520 (Oil and Gas Rights Act) in full, including Sec. 10, and searched the full text of 225 ILCS 725 (Illinois Oil and Gas Act); neither prescribes payment-statement contents. A government-source search of Illinois law for payee statements showing volume, price and deductions returned no provision. Sources read: 765 ILCS 520 - Oil and Gas Rights Act (full act); 225 ILCS 725 - Illinois Oil and Gas Act (full act).
Illinois' Revised Uniform Unclaimed Property Act lists no category specific to oil and gas royalties that we found. A debt of a business association is presumed abandoned 3 years after the obligation to pay arises, and property not otherwise specified is presumed abandoned 3 years after the owner first has a right to demand it or the obligation to pay arises. If the owner is deceased, property with a longer period is presumed abandoned 2 years after the owner's last indication of interest.
A debt of a business association is presumed abandoned 3 years after the obligation to pay arises. (765 ILCS 1026/15-201(5))
Statute text “a debt of a business association, 3 years after the obligation to pay arises”
Property not specified elsewhere is presumed abandoned at the earlier of 3 years after the owner first has a right to demand it or the obligation to pay arises. (765 ILCS 1026/15-201(15))
Statute text “property not specified in this Section or Sections 15-202 through 15-208, the earlier of 3 years after the owner first has a right to demand the property or the obligation to pay or distribute the property arises”
For a deceased owner, where the period would exceed 2 years, property (other than certain insurance amounts) is presumed abandoned 2 years after the owner's last indication of interest. (765 ILCS 1026/15-201)
Statute text “If the owner is deceased and the abandonment period for the owner's property specified in this Section 15-201 is greater than 2 years, then the property, other than an amount owed by an insurance company on a life or endowment insurance policy or an annuity contract that has matured or terminated, shall instead be presumed abandoned 2 years from the date of the owner's last indication of interest in the property.”
Official unclaimed property search: Illinois State Treasurer unclaimed property (I-Cash).
Proceeds from the sale of oil or gas production must be paid to each payee on or before 150 days after the end of the month of first purchase by a payor. (765 ILCS 520/10(2)(a); 765 ILCS 520/10(1)(b))
After the first payment, payments follow the frequency set in the lease or other written agreement. If none is specified, subsequent proceeds are due no later than 60 days after the end of the month of sale for oil and 90 days for gas. (765 ILCS 520/10(2)(a); 765 ILCS 520/10(2)(a)(1); 765 ILCS 520/10(2)(a)(2))
If the total owed is $100 or less, payments may be remitted annually for the aggregate of up to 12 months of accumulated proceeds. (765 ILCS 520/10(2)(b))
If payment is not made within the statutory time limits, the payor must pay interest from the expiration of those limits at the rate charged on loans to depository institutions by the New York Federal Reserve Bank, unless a written agreement sets a different rate; the interest rule does not apply where payment is withheld for the title reasons the statute lists (see suspense). The statute does not say whether interest is simple or compound. (765 ILCS 520/10(3)(a))
The interest requirement does not apply where payments are withheld or suspended because of a title dispute affecting distribution, a reasonable doubt that the payee has clear title, or an unsatisfied title-opinion requirement about the payee's title, identity or whereabouts after a reasonable request for curative information. (765 ILCS 520/10(3)(b)(1)-(2); 765 ILCS 520/10(3)(b)(3))
We found no Illinois statute governing division orders.
Before suing for nonpayment, a payee must give the payor written notice by mail. The payor then has 30 days after receipt to pay or to state in writing a reasonable cause for nonpayment. The payee has a cause of action for nonpayment of proceeds or interest in a court in the county where the well is located. The section provides no attorney-fee or penalty provision. (765 ILCS 520/10(4)(a); 765 ILCS 520/10(4)(b); 765 ILCS 520/10(4)(c))
We found no Illinois statute requiring specific disclosures on royalty check stubs or payment statements.
Illinois' Revised Uniform Unclaimed Property Act lists no category specific to oil and gas royalties that we found. A debt of a business association is presumed abandoned 3 years after the obligation to pay arises, and property not otherwise specified is presumed abandoned 3 years after the owner first has a right to demand it or the obligation to pay arises. If the owner is deceased, property with a longer period is presumed abandoned 2 years after the owner's last indication of interest. (765 ILCS 1026/15-201(5); 765 ILCS 1026/15-201(15); 765 ILCS 1026/15-201)
Last reviewed .
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Educational only — not legal advice; statutes change, so confirm the current version and consult a qualified attorney for your situation. For a question about a specific payment, consult an attorney licensed in Illinois.
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