Illinois SB1562 – OIL AND GAS LEASE REQUIREMENTS

Illinois SB1562 - OIL AND GAS LEASE REQUIREMENTS

Amends the Illinois Oil and Gas Act. Establishes the criteria that the Department of Natural Resources may consider when making a determination that the oil and gas leases submitted with an application for a permit or transfer of a permit for a well are operative and that prior oil and gas leases covering the same lands have terminated due to non-development or non-production under the current permittee. Provides that the Department may rely upon affidavits of non-development and non-production from individuals familiar with the history of development and production of such lands in addition to other evidence. Requires that such testimony and evidence create a rebuttable presumption that there has been no development or production of oil or gas on the lands described in the prior leases for at least 24 consecutive months subsequent to the expiration of the primary term or any extension of the primary term as set forth in the leases. Further provides that a court order or judgment declaring the prior leases terminated is not required, except in extraordinary circumstances where such a determination cannot reasonably be concluded from the testimony and evidence submitted to the Department. Provides that, upon the Department’s determination of a rebuttable presumption, the Department shall provide the current permittee with notice and a 30-day opportunity to request a hearing to rebut the presumption before a final determination on a lease is made. Further provides that, upon the Department’s determination of a rebuttable presumption, if the applicant is not requesting a transfer of any existing permit, but is requesting a new permit, the permit shall be issued to the applicant. Provides that any determination made by the Department shall not diminish the rights or obligations of any current permittee of a well that are otherwise provided by statute or regulation of the Department. Further provides that any request for a determination by the Department or any subsequent hearing requires the payment of a nonrefundable fee of $1000. Requires that the Department make a determination on a lease no later than 90 days after the Department’s receipt of a valid request for a determination. Effective immediately.

 

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