2023 Illinois Compiled Statutes › Chapter 770 - LIENS › 770 ILCS 70/ - Oil and Gas Lien Act of 1989.

(770 ILCS 70/1) (from Ch. 82, par. 501)
Sec. 1. 
		Definitions. 
		In this Act unless the context or subject
matter otherwise requires:
1. "Construction" means construction, maintenance, operation, or repair.
2. "Contract" means a contract, written or oral, express or implied, or
partly express and partly implied, or executory or executed, or partly
executory and partly executed.
3. "Drilling" means drilling, digging, perforating, acidizing,
cementing, completing, repairing or reworking.
4. "Furnish" means sell or rent.
5. "Labor" means work performed in constructing, putting together, or
repairing any of the material used or employed, or furnished to be used or
employed, for or preliminary to the drilling, completing, operating or
repairing of any oil or gas well, or in the execution, maintenance,
operation or repair of a pipeline, including legal, geological,
engineering, abstracting and title services.
6. "Leasehold" means the interest of one holding as a lessee or assignee
under an oil and gas lease or owner of an interest in oil or gas under
which the holder has the right to drill for and produce oil and gas,
including the entire working interest.
7. "Material" means material, machinery, equipment, appliances,
buildings, structures, tools, bits, or supplies used on any leasehold.
8. "Operator" means a person who is responsible for or assumes the daily
supervision and management for operating a leasehold and may be a co-owner
of a leasehold interest.
9. "Operating" means all operations in connection with or necessary to
the production of oil or gas.
10. "Owner" means a person holding any interest in the legal or
equitable title or both to any leasehold for oil or gas purposes, or any
pipeline, or his agent, and shall include purchasers under executory
contract, receivers, and trustees.
11. "Permittee" means the person to whom a permit is issued for
drilling, reopening or conversion of a well by the Department of
Natural Resources or the person who is named as
principal in the bond required by the Department of Natural
Resources.
12. "Person" means an individual, corporation, firm, partnership,
or association.
13. "Pipeline" means any pipeline laid and designed as a means of
transporting natural gas, oil, or gasoline, or their components or
derivatives, and the right of way therefor.
14. "Services" means work performed exclusive of labor, including the
hauling of material, whether or not involving the furnishing of materials.
14.5. "Well" means any drill hole required to be permitted under subsection
(2) of
Section 6 of the Illinois Oil and Gas Act or under Section 12 of that Act.
15. "Working interest" means any interest in or any right to the
production of oil or gas, excluding royalty or overriding royalty interests.
(Source: P.A. 91-187, eff. 1-1-00.)
(770 ILCS 70/1.1) (from Ch. 82, par. 501.1)
Sec. 1.1. 
		Short Title. 
		This Act shall be known as the Oil and Gas Lien Act of 1989.
(Source: P.A. 86-377.)
(770 ILCS 70/2) (from Ch. 82, par. 502)
Sec. 2. 
		Persons entitled to lien - amount of lien. 
		Any person,
including the operator, who shall, under contract with the owner or
operator of any leasehold or of any pipeline, perform any labor or furnish
any material or services used or employed, or furnished to be used or employed
for, or preliminary to, the drilling, completing, equipping or operating of
any oil or gas well upon such leasehold, or in the construction of any
pipeline, or in the constructing, putting together, or repairing of any
materials so used or employed, or furnished to be used or employed, shall
be entitled to a lien under this Act, whether or not a producing well
is obtained and whether or not such material is incorporated in or becomes
a part of the completed oil or gas well or pipeline, for the amount due
him for the performance of such labor or the furnishing of such material or
services, including without limitation transportation and mileage charges
connected therewith, and interest as provided by the contract between such
person and the owner or operator, or if no interest is provided for by
contract, from the date of the filing of the lien, at the rate provided for
by statute for judgments.
(Source: P.A. 91-357, eff. 7-29-99.)
(770 ILCS 70/3) (from Ch. 82, par. 503)
Sec. 3. 
		Property Subject to Lien.
A. Liens created under Section 2 shall extend to:
1. the leasehold for which the materials or services     were furnished, or for which the labor was performed, and the appurtenance thereunto belonging;
2. all materials and fixtures owned by the owner or     owners of such leasehold and used or employed, or furnished to be used or employed in the drilling, completing, equipping or operating of any oil or gas well located thereon;
3. all oil or gas wells located on such leasehold,     and the oil or gas produced therefrom, and the proceeds thereof inuring to the leasehold therein as such leasehold interest existed on the date such labor was first performed or such material or services were first furnished;
4. all proceeds of production inuring to the     leasehold held by any purchaser of such oil and gas; and
5. the whole of the pipeline to which the materials     or services were furnished, or for which labor was performed, and all buildings and appurtenances thereunto belonging, including, without limiting the generality of the foregoing, gates, valves, pumps, pump stations, and booster stations, and upon all materials and fixtures owned by the owner of such pipeline and used or employed or furnished to be used or employed in the construction thereof.
B. If materials or services are furnished or labor is performed for only
a portion of the leasehold, the lien against the leasehold created by this
Act shall be limited to:
1. the minimum surficial acreage for well spacing     designated by the permittee for a well drilled thereon described as the establishing drilling unit with the Department of Natural Resources; and
2. if no such designation was made by the permittee     prior to the filing of a claim for lien, the minimum surficial acreage for well spacing designated for a well drilled thereon for an established drilling unit described in the claim for lien, which will be designated by the court in the foreclosure proceeding.
C. If materials or services are furnished or labor is performed for
leaseholds, the proceeds of which are commingled by  common storage or are
validly polled or unitized by agreement of the owners thereof or by
operation of law or by any order of any agency having jurisdiction thereof,
the lien shall extend to all of the leaseholds so commingled by common
storage, pooling or unitization.
(Source: P.A. 91-357, eff. 7-29-99.)
(770 ILCS 70/4) (from Ch. 82, par. 504)
Sec. 4. 
		Subcontractor's Lien. 
		Any person who shall, under contract,
perform any labor or furnish any material or services as a subcontractor
under an original contractor or for or to an original contractor or a
subcontractor under an original contractor, shall be entitled to a lien
upon all the property upon which the lien of an original contractor may
attach to the same extent as an original contractor, and the lien provided
for in this Section shall further extend and attach to all materials and
fixtures owned by such original contractor or subcontractor to or for whom
the labor is performed or material or services furnished and used or
employed, or furnished to be used or employed in the drilling, completing
or operating of such oil or gas wells, or in the construction of such
pipeline.  Upon the filing of a subcontractor's  lien, the owner may
withhold payment to the original contractor in the amount claimed by the
lien until the debt on which the lien is based is settled or determined to
be not owed.  The owner is not liable to the subcontractor for more than
the amount that the owner owes the original contractor when notice of the
lien is received by the owner.
(Source: P.A. 86-377.)
(770 ILCS 70/5) (from Ch. 82, par. 505)
Sec. 5. 
		Forfeiture or Failure of Title. 
		Forfeiture of a leasehold
estate or a judicial finding or abandonment shall not impair any lien as to
proceeds of production, material, equipment, fixtures and appurtenances
located thereon and to which said lien has attached prior to forfeiture or
abandonment or a judicial finding thereof.  Failure of an equitable
interest to become legal title or nonfulfillment of a condition subsequent
on which a legal interest is contingent does not impair a lien on proceeds
of production, material, equipment, fixtures and appurtenances, or an
improvement located on the land covered by the equitable interest if the
lien attached to the proceeds of production, material, equipment, fixtures
and appurtenances or improvement before the failure.
(Source: P.A. 86-377.)
(770 ILCS 70/6) (from Ch. 82, par. 506)
Sec. 6. 
		Notice to purchaser of oil and gas. 
		Anything in this
chapter to the contrary notwithstanding, any lien claimed by virtue of this
Act insofar as it may extend to oil or gas or the proceeds of the sale
of oil or gas shall not be effective against any purchaser of such oil or
gas until a copy of the recorded claim for lien has been delivered to such
purchaser.  Such copy shall be delivered personally to the purchaser or by
registered or certified mail deposited in the United States mails.  Until
such copy is delivered as above provided, no such purchaser shall be liable
to the claimant for any oil or gas produced from the leasehold upon which
the lien is claimed or the proceeds thereof except to the extent of such
part of the purchase price of such oil or gas or the proceeds thereof as
may be owing by such purchaser at the time of delivery of such written copy
of claim for lien.  Such purchaser shall withhold payments for such oil or
gas proceeds to the extent of the lien amount claimed until delivery of a
recorded release of lien from the claimant, receipt of a certified judgment
of any court, or the filing of bond provided for by Section 11; provided,
however, that such purchaser may release payments for such oil and gas
proceeds if a notice of Lis Pendens regarding the suit to foreclose has not
been filed with the one-year limitation provided for by Section 12.
(Source: P.A. 86-377.)
(770 ILCS 70/7) (from Ch. 82, par. 507)
Sec. 7. 
		Date lien arises-preference over other encumbrances. 
		The
lien provided for in this chapter arises on the date of the furnishing of
the first item of material or services or the date of performance of the
first labor.  Upon compliance with the provisions of Section 10, such lien
shall be preferred to all other titles, charges, liens, or encumbrances
which may attach to or upon any of the property upon which a lien is given
by this Act subsequent to the date the lien herein provided for arises.  As to
the priority between prior encumbrances and liens filed hereunder, the lien
claimant shall be preferred to the extent of the reasonable value of the
claimant's labor, material and services if the leasehold or material has
been enhanced thereby.
(Source: P.A. 86-377.)
(770 ILCS 70/8) (from Ch. 82, par. 508)
Sec. 8. 
		Party of liens. 
		All liens affixed by virtue of this
Act upon the same leasehold shall be of equal preference and priority.
(Source: P.A. 86-377.)
(770 ILCS 70/9) (from Ch. 82, par. 509)
Sec. 9. 
		Continuing deliveries under single contract. 
		All labor
performed or materials or services furnished by any person entitled to a
lien under this Act upon the same leasehold or the same pipeline shall
for the purpose of this Act be considered as having been performed or
furnished under a single contract regardless of whether or not the same was
performed or furnished at different times or on separate orders, provided
that no more than four months shall have elapsed between the date of
performance of such labor or the date of furnishing such material or
services and the date on which labor is next performed or materials or
services are next furnished.
(Source: P.A. 86-377.)
(770 ILCS 70/10) (from Ch. 82, par. 510)
Sec. 10. 
		Contents and filing of statement of lien. 
		Every person
claiming a lien under this Act shall file with the Recorder's Office of
the county in which such leasehold, or pipeline, or some part thereof, is
situated, a statement verified by affidavit which must include:
(1) The name of an owner of the leasehold or pipeline, and the operator,
if known, or the "permittee" and such owner's and operator's mailing address,
if known.
(2) A legal description of the leasehold to which the lien extends using
the description required by Section 3 B, or a legal description of the
pipeline involved.
(3) The nature and dates of the labor performed or materials or services
furnished.
(4) Said statement of lien must be filed within four months after the
date on which the claimant's labor was last performed or materials or
services were last furnished under a single contract as provided for in
Section 9.  In no event shall such statement of lien be effective as to
labor performed or materials or services furnished more than 2 years prior
to the filing of  the statement of lien in the Recorder's Office.  A copy
of the statement of lien shall be delivered personally to an owner of the
leasehold or pipeline, and the operator, if known, or to the permittee, or
by registered or certified mail deposited in the United States mails.
Failure to serve a copy of such statement of lien shall not in any manner
serve to invalidate the same.
(Source: P.A. 86-377.)
(770 ILCS 70/11) (from Ch. 82, par. 511)
Sec. 11. 
		Bond to indemnify against liens.
1.  Whenever any lien or liens shall be filed under the provisions of
this Act, then any owner or the contractor or subcontractor whom such
lien or liens are claimed, or either of them, may file a bond with the
Recorder of the county in which the property is located as herein provided.
 Such bond shall describe the property on which lien or liens are claimed,
shall refer to the lien or liens claimed in a manner sufficient to
identify them, shall be in the principal amount of the claimed lien or
liens referred to, plus 25% thereof, and shall be executed by the party
filing same as principal and by a corporate surety authorized under the
laws of this State to execute such bonds as surety and shall be conditioned
substantially that the principal and surety will pay to the obligees named
or their assigns the amounts of the liens so claimed by them with all costs
in the event same shall be proven to be liens on such property.
2. Upon the filing of such bond, the Recorder shall send a notice
thereof, together with a copy of the bond, to all lien claimants named
therein, by registered or certified mail addressed to such lien claimants
at the address set forth in their respective claims for lien.
3. Such bond, when filed, and such notice, when mailed, shall be
recorded by the Recorder in the oil and gas lien records, and any purchaser
or lender may rely upon the record of such bond and notice in acquiring any
interest in said property and shall absolutely be protected thereby.
4. In lieu of filing of the bond as provided for herein, a deposit of
cash may be made in the amount of claimed lien or liens referred to plus
25% thereof and the same procedure shall be followed  by the Recorder as
required in the case of filing of a bond. Such bond, or cash deposit when
filed, shall take the place of the property against which any claim for
lien referred to in such bond is asserted. At any time within the period of
time provided in Section 12, any person claiming such lien may sue upon
such bond or cash, but no action shall be brought upon such bond after the
expiration of such period. One action upon said bond shall not exhaust the
remedies thereon but each obligee or assignee of an obligee named therein
may maintain a separate suit thereon in any court having jurisdiction.
5. In case the lienholder shall recover in a suit upon the bond or
deposit of cash, he shall be entitled to recover a reasonable attorney's
fee, to be fixed by the court, which shall be taxed as costs in this action.
(Source: P.A. 86-377.)
(770 ILCS 70/12) (from Ch. 82, par. 512)
Sec. 12. 
		Duration of lien-suit to foreclose. 
		Any lien provided for by
this chapter may be enforced by civil action in the circuit court of the
county in which the leasehold, or pipeline, or some part thereof, is
situated. Such action shall be brought within one year from the time of the
filing of the lien statement as provided for in Section 10.
(Source: P.A. 86-377.)
(770 ILCS 70/13) (from Ch. 82, par. 513)
Sec. 13. 
		Parties to suit to foreclose. 
		In such action all persons whose
liens are filed as herein provided, other encumbrancers and any owners
whose interest is sought to be affected shall be made parties and the
issues shall be made and the trials shall be conducted as in other civil
cases. Any lien claimant or encumbrancer made a party to such action shall
not be required to file any counterclaim or crossclaim but shall set forth
as part of such person's answer, within the limitation provided for in
Section 12, sufficient facts to indicate that such person has complied with
Section 10 in the case of a person claiming a lien, or to indicate the
nature and extent of the encumbrance.
(Source: P.A. 86-377.)
(770 ILCS 70/14) (from Ch. 82, par. 514)
Sec. 14. 
		Consolidation of suits to foreclose - intervention. 
		If several
actions brought to enforce liens under this Act on the
same property be pending at the same time, the court may order them to be
consolidated.  Any claimant having filed his statement of lien as herein
provided shall be entitled to intervene in any pending action brought to
enforce a lien on the same property.
(Source: P.A. 86-377.)
(770 ILCS 70/15) (from Ch. 82, par. 515)
Sec. 15. 
		
		Removal prohibited; injunction; lien follows property
wrongfully removed.  When any lien provided for by this Act shall have
attached to the property covered thereby, it shall be unlawful for any
person to remove such property, or any part thereof, or cause the same to
be removed from the land or premises where located at the time such lien
attached or otherwise dispose of the same without the written consent of
the holder of such lien.  In the event such property, or some part thereof,
is about to be removed or disposed of in violation of this Section, the
circuit court of the county where such property, or any part thereof, is
located may upon the verified complaint of the holder of such lien enjoin
all persons alleged in such complaint to be about to remove or dispose of
such property, or some part thereof, from removing or disposing of the
same.  In the event such property, or any part thereof, shall have been
removed or disposed of in violation of this Section, the holder of such
lien shall be entitled in any action to foreclose the same to the
appointment of a receiver to take possession of such removed or disposed of
property wherever the same may be located within this State; provided,
however, that this Section shall not preclude the appointment of receiver
in actions brought to foreclose liens given by this Chapter upon any
equitable grounds warranting such appointment or as provided for by Section
16.  This Section shall not apply to any lien claims which have been
discharged by the filing of a bond as provided by Section 11.
(Source: P.A. 86-377.)
(770 ILCS 70/16) (from Ch. 82, par. 516)
Sec. 16. 
		Sale pursuant to foreclosure. 
		A. In all actions to enforce
a lien under the provisions of this Act, the court shall, for cause,
appoint a receiver with the usual powers granted in equity to operate the
leasehold, subject to the lien or liens being enforced and, upon request by
plaintiff, the court shall appoint a receiver or other person to conduct the
sale of the property subject to the lien or liens being enforced.
1.  No property, real or personal, shall be sold by virtue of any
judgment of foreclosure under this Act, except at public sale, between the
hours of 9:00 a.m. and 5:00 p.m., and pursuant to the procedures of this
Section
2.  The receiver or other person conducting the sale shall give public
notice of the sale as follows:
(a) The notice of sale shall include at least the following information,
but an immaterial error in the information shall not invalidate the legal
effect of the notice:
(1) The case, title, case number and the court in which the foreclosure
was filed;
(2) The time and place of the sale;
(3) If the leasehold is sold, a legal description sufficient to identify
it with reasonable certainty;
(4) If personalty is sold, a description thereof sufficient to identify
it with reasonable certainty, its location and times and place where it may
be inspected prior to sale;
(5) The name, address and telephone number of the person conducting the
sale;
(6) The terms of the sale; and
(7) Such other information order by the court.
(b) The notice of sale shall be published at least three consecutive
calendar weeks (Sunday through Saturday,) once in each week, the first of
such notices to be published not more than 35 days prior to the sale, the
last such notice to be published not less than 7 days prior to the sale by
an advertisement in a newspaper circulated to the general public in the
county in which the foreclosure action was brought.
C. The person conducting the sale shall also give notice to all parties
in the action who have appeared and have not theretofore been found by the
Court to be in default for failure to plead.  Such notice shall be given in
the manner
provided in the applicable rules of Court for service of papers other than
process and complaint, not more than 28 days nor less than 7 days prior to
the day of sale. After notice is given as required in this Section, a copy
thereof shall be filed in the office of the Clerk of the Court entering the
judgment, together with a certificate of counsel or other proof that notice
has been served in compliance with this Section.
D. The person conducting the sale shall again give notice in accordance
with this Section of any adjourned sale; provided, however, that if the
adjourned sale is to occur less than 30 days after the last scheduled sale,
notice of any adjourned sale need be given only once, not less than 5 days
prior to the date of the adjourned sale.
E. No other notice by publication or posting shall be necessary unless
required by order or rule of the Court.
F. Upon sale of any property, the person conducting the sale shall give
to the purchaser a certificate describing the property purchased by him or
her, showing the amount paid therefor, or if purchased by the holder of the
lien or liens being enforced, the amount of his or her bid.
G. There shall be no right of redemption from foreclosure sale under
this Act and all rights and equities of redemption from any judgment of
foreclosure are barred.
H. The person conducting the sale shall promptly make a report to the
court and upon motion and notice in accordance with court rules applicable
to motions generally, the court shall conduct a hearing to confirm the
sale. If the court finds that notice of the sale required with subsections
B, C, D and E were given and that the sale was not conducted fraudulently,
the court shall then enter an order confirming the sale and giving
possession of the property to the purchaser. The confirmation order may also;
1. approve the receiver's fees and costs arising between the entry of
any judgment or order appointing the receiver and the confirmation hearing;
2. provide for a personal judgment against any party for a deficiency.
I. Upon confirmation of the sale, the person who conducted the sale or
the court shall execute an instrument to the holder of the certificate of
sale sufficient to convey title to the property purchased, which instrument
shall identify the court and the caption of the case in which judgment was
entered. Signature and recital in the instrument of the title or authority
of the person signing the instrument conveying title, of authority pursuant
to the judgment and of the giving of the notices required by this Section
is sufficient proof of the facts required and of such authority to execute
the instrument of conveyance, but such instrument shall not be construed to
contain any covenant on the part of the person executing it.
J. The court granting the judgment of foreclosure may make further
orders to enforce possession of the property purchased under any sale of
foreclosure.
(Source: P.A. 86-377.)
(770 ILCS 70/17) (from Ch. 82, par. 517)
Sec. 17. 
		Allowance of reasonable attorney's fee in foreclosure. 
		In any
action brought to enforce a lien prescribed by this Act,
unless the defendant interposes a good and substantial defense,
any lien claimant
for whom judgment is rendered shall be entitled to recover a reasonable
attorney's fee, to be fixed by the court, which shall be taxed as costs in
the action.
(Source: P.A. 91-187, eff. 1-1-00.)
(770 ILCS 70/18) (from Ch. 82, par. 518)
Sec. 18. 
		Personal action. 
		Nothing in this Act shall be construed to
impair or affect the right of any person to whom any debt may be due for
work performed or materials or services furnished to maintain a personal
action against the person liable for such debt.
(Source: P.A. 86-377.)
(770 ILCS 70/19) (from Ch. 82, par. 519)
Sec. 19. 
		Waivers. 
		The taking of any note or any additional security by
any person given a lien by this Act shall not constitute a waiver of the
lien unless made a waiver by express agreement of the parties in writing.
The claiming of a lien under this Act shall not constitute a waiver of any
other right or security held by the claimant unless made a waiver by
express agreement of the parties in writing.
(Source: P.A. 86-377.)
(770 ILCS 70/20) (from Ch. 82, par. 520)
Sec. 20. 
		Assignment of liens and actions. 
		All claims for liens and
likewise all actions to recover therefor under this Act shall be assignable
so as to vest in the assignee all rights and remedies herein given subject
to all defenses thereto that might be raised if such assignment had not
been made. Where a statement of lien has been filed as herein provided
such assignment shall be made by a separate instrument in writing, which
shall be recorded in the Recorder's Office where the claim was filed.
(Source: P.A. 86-377.)