Illinois has no severance tax, a payment statute with real teeth, and a court process that can hand an unknown owner's minerals to the surface owner. The whole defense is being findable in the county records, and almost nobody does it.
This is the whole guide, on one page, free, with nothing gated. It covers what you own, the Illinois law that decides what lands in your bank account, whether your minerals can be taken from you, what happens if a well is drilled and you are not leased, what you owe when you sell, and the questions worth asking any buyer including us.
Almost every confusing thing in oil and gas comes from the fact that the mineral estate is not one thing. It is a bundle of five rights that can be split apart and sold separately:
A mineral interest is all five. A non-participating royalty interest is only the fifth, with no say in leasing and no share of bonus. An overriding royalty interest is carved out of a particular lease and dies when that lease dies. A working interest takes revenue net of costs and, unlike all of the above, can lose you money.
Which one you hold changes the value, the tax treatment, and who has to sign what. In the Illinois Basin most family interests are small royalty or mineral fractions under Mississippian stripper wells that have paid since the 1940s, and the paper is often two generations behind. Start here: NPRIs, overriding royalties, and the glossary.
Illinois has no statute allocating post-production costs between lessor and lessee, and we located no Illinois appellate decision that squarely settles whether the state follows the at-the-well rule or the marketable-product rule. That means your lease language controls more completely in Illinois than in a state with a settled default, and an Illinois owner negotiating a new lease should insist on an express no-deductions clause rather than relying on background law that is not there.
Your first move if the deductions look wrong is a written demand by certified mail, keeping the receipt, because the certification is what starts the clock. Our free letter templates have the wording and the statement decoder explains every line on the stub.
Illinois has a real payment statute. Under the Oil and Gas Rights Act, **765 ILCS 520/10**, effective January 1, 2016, the first payment is due within **150 days** after the end of the month of first purchase. After that, payment follows the lease, or if the lease is silent, within **60 days** after the end of the month of an oil sale and **90 days** for gas. Late amounts earn interest at the **New York Federal Reserve discount rate**, and you must give the payor **30 days written notice** before filing suit. Our letter generator writes that notice with the citation.
| Minimum payment rule | Amounts of $100 or less may be held and paid annually. |
| Time limit to sue over an underpayment | 10 years on a written contract, 735 ILCS 5/13-206 |
A stopped check very often is not a stopped well. The usual causes are a balance under the minimum threshold, a title change putting the interest in suspense, an unprobated death in the chain, an address the payor could not deliver to, or a change of payor after an acquisition. That money does not disappear; it sits in suspense and after three years goes to the Illinois State Treasurer. See unclaimed royalties.
Not by nonuse alone, and this is where Illinois differs from Indiana and Kansas. Illinois has no self-executing dormant mineral act with a statement-of-claim cure. What it has is the **Severed Mineral Interest Act, 765 ILCS 515**, a court process aimed at severed minerals whose owners are **unknown or missing**. A surface owner or a prospective lessee petitions the circuit court, publishes notice once a week for three weeks, and mails notice to the last known address. The court can declare a trust and appoint a trustee to lease the interest and hold the money. Under Section 11 the court can eventually declare the interest null and void and vest it in the surface owner: **seven years** after the judgment, or **one year** where the severance happened more than 20 years before the filing. An owner may intervene before final judgment by proving ownership and paying the plaintiff's taxes and allowed costs.
There is no statement of claim to file. The defense is simpler and almost nobody does it: keep a recorded instrument, a deed or an affidavit, with a current address in the county where the minerals sit, so you are neither unknown nor missing when someone goes looking.
We could not locate an Illinois compulsory pooling statute of the Oklahoma kind, with an election menu and a statutory penalty, and we would rather say so than invent one. In practice the Illinois Basin is a vertical, lease-by-lease province, and an unleased owner is usually either leased before drilling or left out of the well. Spacing and unit questions run through the Illinois Department of Natural Resources, Office of Oil and Gas Resource Management. If you receive anything that looks like a pooling or integration notice in Illinois, send it to us the day it arrives and we will read it free, because the answer will be in the document rather than in a statute we can point you to.
The reason any of this matters is the rule of capture: a well on the tract next to yours can legally drain oil and gas from under your land, and you cannot sue anyone for it. Being leased into the unit is what converts being drained into having a share. See also forced pooling deadlines by state.
Severance tax. None on conventional production. Illinois is one of the few producing states with no severance or gross production tax on ordinary oil and gas wells. The only production tax on the books is the **Hydraulic Fracturing Tax Act, 35 ILCS 450**, which applies solely to wells permitted under the 2013 high volume horizontal fracturing law, at **3 percent for the first 24 months** with an exemption for oil wells averaging 15 barrels a day or less. Since the basin has stayed vertical, almost no Illinois royalty owner pays it.
When you sell. Illinois has a flat individual income tax (4.95 percent) and taxes nonresidents on Illinois source income, including gain on the sale of Illinois minerals. We found no Illinois withholding at closing on a mineral sale. **Illinois does have an estate tax**, with a $4 million exemption; it rarely touches a mineral estate on its own, but it counts the whole estate. No inheritance tax.
See taxes when you sell mineral rights, and if you inherited the interest, understand the stepped-up basis before you sell anything: your basis is generally the value at the date of death, not what your grandparents paid, which frequently means far less taxable gain than owners expect.
Severed minerals are real estate in Illinois. The small estate affidavit under **755 ILCS 5/25-1** reaches personal property only, up to $150,000 since August 2025, and **cannot be used at all if the decedent owned any Illinois real estate**. That means an Illinois probate, or for an out-of-state decedent an ancillary probate in the county where the minerals sit, filed with authenticated copies of the home-state letters and will. Affidavits of heirship are used inside probate and operators accept them for pay status, but they are not a standalone title route. A **transfer on death instrument under 755 ILCS 27** avoids all of it for the next generation; since January 1, 2022 it covers any Illinois real property, including severed minerals, if recorded before death.
The single most common thing we see is an interest still sitting in the name of someone who died twenty or forty years ago. It is fixable, it is cheaper to fix than to leave, and we coordinate and pay for the probate or ancillary proceeding as part of a purchase. See inherited mineral rights in Illinois, selling before probate is done, and transferring inherited minerals.
Three places, and none of them has what most owners expect. The Illinois State Geological Survey's ILOIL map carries about 200,000 well records with locations, producing horizons, logs, scout tickets, and oil field outlines, filed by section, township and range rather than by owner name. The Illinois DNR Office of Oil and Gas Resource Management publishes the weekly drilling permit log. The Illinois Petroleum Resources Board compiles annual production by county from first-purchaser reports. What Illinois does **not** publish is well-level or lease-level production, which makes your division orders, check stubs and 1099s the primary record of what your interest pays, and makes a buyer's formula letter built from purchased data even less reliable here than elsewhere. Land records are at the county recorder.
Our well records by state page links every state's free public search, and our operator directory covers more than 38,000 operators with contact information refreshed weekly.
Producing royalties are priced off cash flow and decline. Non-producing minerals are priced off location and activity. Almost every offer you receive is built the same way: take your last twelve months of royalty income and apply a multiple.
That method has one predictable failure, and it is worth understanding because it is where most owners lose money. It assigns a value of zero to anything that has not happened yet. In the Illinois Basin the flip side matters just as much: a stripper royalty that has paid for forty years at a slow, flat decline is a durable asset, and a multiple built for a shale well in its second year undervalues it badly. A waterflood expansion, an infill program in Clay City or Louden, or a carbon storage footprint over your tract are not in last year's income either.
Ask any buyer, including us, to show you their decline assumption and the reasoning behind it. If they will not break it out, they are pricing your check rather than your minerals. See how mineral rights are valued.
You are welcome to use every one of these on us. That is the point of publishing them.
A check stub, an old deed, a division order, a pooling order, or just the county. We will identify the interest, value it with the arithmetic shown, and tell you honestly if you should keep it. Free, no obligation, and no mailing list.
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Last reviewed November 2026. Statutes, rates, and case law change, and where Illinois law is genuinely unsettled or we could not confirm a statute we have said so rather than filling the gap. Berlin Royalties is a mineral buyer and a landman shop in Tulsa, not a law firm or a tax advisor, and this guide is general information rather than advice about your interest. For a dispute worth real money, hire a lawyer in Illinois.