The Illinois basin is an oval depression containing Cambrian through Permian sedimentary rocks. A basin in geologic terms is a large-scale structural formation of rock. They are geologic depressions, the opposite of domes.

Three to five hundred million years ago Illinois was a shallow tropical ocean located near the equator at that time. The ocean left huge thicknesses of sand sediment behind which became sandstone. It also left behind billions of seashells. These shells and fragments of shells made of calcium carbonate combined to form limestone. During the Paleozoic Era the rocks were periodically bent and folded. The earth's crust periodically sank, creating the broad, depression called the Illinois basin.

The Illinois basin began as a failed rift. A failed rift occurs when continental rifting (when the Earth's crust and outer layer are pulled apart) began, but then failed to continue. After the rifting episode, the basin began to form as a thick succession of sandstone and carbonate rocks deposited above the center of the rift.

Basins appear on maps as almost circular or elliptical, with concentric layers of strata. The layers dip toward the center. If you look at the strata of a basin the oldest rocks are on the outside and get younger as you go in towards the center. Structural basins like the Illinois Basin are sources of coal, petroleum, and groundwater. The oil producing area of Illinois is part of the Illinois Basin. The Illinois Basin covers southern Illinois, western Kentucky and western Indiana.

Oil and natural gas have been produced in the Illinois basin from Paleozoic rocks. Most of the basin's hydrocarbons have been produced from sandstones, carbonate rocks as well as Devonian, Silurian, and Ordovician rocks.

The first attempt at drilling oil wells in Illinois was near Champaign in 1853. These wells produced "swamp gas" or "drift gas" from glacial fill but no oil. Since 1853, about 155,000 oil, gas, and injection wells have been drilled in Illinois. The first oil wells were drilled in the early 1860's. Commercial oil production began in Illinois in 1905. Most oil produced in Illinois from 1894 through 1937 was produced in shallow areas of less than 1000 feet. In 1937 deeper zones were discovered from 2,500 to 3,500 feet. The deepest well ever drilled was over 13,000 feet deep. Peak oil production occurred in Illinois between 1955 and 1963 with an average yearly production of 80 million barrels. The current yearly production is approximately 10-12 million barrels.