225 ILCS 725/22.2 — Illinois Code / Chapter 225 / Act 725 / Section 22.2
Section 22.2
Status: in_force

(225 ILCS 725/22.2) (from Ch. 96 1/2, par. 5436) Sec. 22.2. Integration of interests in drilling unit. (a) As used in this Section, "owner" means any person having an interest in the right to drill into and produce oil or gas from any pool, and to appropriate the production for such owner or others. (b) Except as provided in subsection (b-5), when 2 or more separately owned tracts of land are embraced within an established drilling unit, or when there are separately owned interests in all or a part of such units, the owners of all oil and gas interests therein may validly agree to integrate their interests and to develop their lands as a drilling unit. Where, however, such owners have not agreed to integrate their interests and where no action has been commenced seeking permission to drill pursuant to the provisions of "An Act in relation to oil and gas interests in land", approved July 1, 1939, and where at least one of the owners has drilled or has proposed to drill a well on an established drilling unit the Department on the application of an owner shall, for the prevention of waste or to avoid the drilling of unnecessary wells, require such owners to do so and to develop their lands as a drilling unit. The Department, as a part of the order integrating interests, may prescribe the terms and conditions upon which the royalty interests in the unit or units shall, in the absence of voluntary agreement, be determined to be integrated without the necessity of a subsequent separate order integrating the royalty interests. Each such integration order shall be upon terms and conditions that are just and reasonable. (b-5) When 2 or more separately owned tracts of land are embraced within an established drilling unit, or when there are separately owned interests in all or a part of the unit, and one of the owners is the Department of Natural Resources, integration of the separate tracts shall be allowed only if, following a comprehensive environmental impact review performed by the Department, the Department determines that no substantial or irreversible detrimental harm will occur on Department lands as a result of any proposed activities relating to mineral extraction. The environmental impact review shall include but shall not be limited to an assessment of the potential destruction or depletion of flora and fauna, wildlife and its supporting habitat, surface and subsurface water supplies, aquatic life, and recreational activities located on the land proposed to be integrated. The Department shall adopt rules necessary to implement this subsection. (b-6) All proceeds, bonuses, rentals, royalties, and other inducements and considerations received from the integration of Department of Natural Resources lands that have not been purchased by the Department of Natural Resources with moneys appropriated from the Wildlife and Fish Fund shall be deposited as follows: at least 50% of the amounts received shall be deposited into the State Parks Fund and not more than 50% shall be deposited into the Plugging and Restoration Fund. (c) All orders requiring such integration shall be made after notice and hearing and shall be upon terms and conditions that are just and reasonable and will afford to the owners of all oil and gas interests in each tract in the drilling unit the opportunity to recover or receive their just and equitable share of oil or gas from the drilling unit without unreasonable expense and will prevent or minimize reasonably avoidable drainage from each integrated drilling unit which is not equalized by counter drainage, but the Department may not limit the production from any well under this provision. The request shall be made by petition accompanied by a non-refundable application fee of $1,500. The fee shall be deposited into the Underground Resources Conservation Enforcement Fund. The monies deposited into the Underground Resources Conservation Enforcement Fund under this subsection shall not be subject to administrative charges or chargebacks unless otherwise authorized by this Act. (d) All operations, including, but not limited to, the commencement, drilling, or operation of a well upon any portion of a drilling unit shall be deemed for all purposes the conduct of such operations upon each separately owned tract in the drilling unit by the several owners thereof. That portion of the production allocated to a separately owned tract included in a drilling unit shall, when produced, be deemed, for all purposes, to have been actually produced from such tract by a well drilled thereon. (e) In making the determination of integrating separately owned interests, and determining to whom the permit should be issued, the Department may consider: (1) the reasons requiring the integration of separate interests; (2) the respective interests of the parties in the drilling unit sought to be