Ill. Admin. Code tit. 14 § 130.202

Current through Register Vol. 48, No. 25, June 21, 2024

Section 130.202 - Definition of the Term "Fractional Undivided Interest", as Used in Section 2.1 of the Act with Reference to Oil and/or Gas Leases, Rights or Royalties

The term "fractional undivided interest" as used with reference to oil and/or gas leases, rights or royalties includes landowner's royalty interests, overriding interests, working interests, participating interests, and oil or gas payments, as the terms are hereinafter defined in this section:

a) The term "landowner's royalty interests" means fractional undivided interests in the royalty reserved by a landowner or fee owner upon the creation of an oil or gas lease.

b) The term "overriding royalty interests" means fractional, undivided interests or rights of participation in the oil or gas, or in the proceeds from the sale of the oil or gas, produced from a specified tract or tracts, which are limited in duration to the terms of an existing lease and which are not subject to any portion of the expense of development, operation or maintenance.

c) The term "working interests" means fractional, undivided interests in an oil or gas leasehold which are subject to any portion of the expense of development, operation or maintenance and the costs of which include leasehold acquisition and drilling costs and any promotional expenses.

d) The term "participating interests" means fractional, undivided interests or rights of participation in the oil or gas, or in the proceeds from the sale of oil or gas, produced from a specified tract(s) or well(s), which are limited in duration to the terms of an existing lease and which are subject to any portion of the expense of development, operation or maintenance.

e) The term "oil or gas payments" means fractional, undivided interests or rights of participation in the oil or gas, or in the proceeds from the sale of oil or gas, produced from a specified tract(s) or well(s) and which are limited to a maximum amount fixed in barrels of oil, cubic feet of gas, or dollars.

Ill. Admin. Code tit. 14, § 130.202