We had an offer today for $425.00 a rod to run a pipeline across our land in Karnes Co. Tx. Is this a fair price. Any info is greatly appreciated.
Dear Mr. Bowman,
Does that figure include pre-paid damages? If so, have them issue two checks, appx, say $200 per rod for damages and the balance for consideration. Damages are not taxable, so check with your accountant if those figures are in line, but certainly have them split out.
What I have been negotiating in se Texas is closer to $600 per rod with $200 pre-paid damages included. BUT, I sort of figure out what their options are in going around me and try to make it a bit cheaper to go through me.,
As to fair, I have gotten more and less. I would not argue too much. I have been to Karnes County. Maybe you can get a sendero out of the deal.
AJ:
Mr. Cotten is correct in his inclusion of pre-paid damages in the cost per rod. One thing to condider is the area of your property that will be impacted in the event of a spill. Does your property have any lakes or creeks located such that any migration of oil would affect the areas. I have seen small lakes completely covered with oil due to a leak in a pipeline which resulted in a massive fish kill. In most cases, the State agency governing oil and gas, will have regulations in place for proper cleanup of a spill. I have also seen surface owners eventually sue the operator for damages. Bottom line, you need to cover all bases of what might happen as a result of this pipeline on your property.
Thanks for the help. We do have a creek on the property but I am not sure if the pipeline will impact it. We are planning on getting a lawyer to look over this deal , but like Mr. Cotton said we do not want to push for more money with possibility of them just skipping us and moving the pipeline somewhere else. I would love to get 600 per rod. It seems like there is a very thin line between being firm in the money you want without being too pushy. Is there any suggestions on how to go about that situation?
Most likely this company has a ceiling on the price they will pay and it is up to you to get the most you possibly can for your property usage. Just make sure that you are satisfied with the amount as it is your property. Good luck!!
Dear Mr. Bowman,
In order to manipulate the situation, you must know everything about the situation. Everything from costs, bend angle maximums that they are comfortable with, etc.
I assure you, the devil is in the details.
There are other things to consider. For example, I would make it a single use easement with a single line. I would define the pipe size and require it to be buried at least 3 feet from the surface of the soil to the top of the line. Also, knowing how sparse the topsoil is (or can be) in Karnes, you want them to use the double ditch method of laying the line, where the soil is put back in reverse order, to preserve your topsoil being in the right place.
Consider making it a term easement. Take into account if they want to install any faciities on the surface of your land. Do you want them to do that? If so, would you want it fenced capable of turning cattle of ordinary demeanor?
I like pipelines. I have never seen a pipeline run over a school bus full of kids. However, accidents can happen. Make sure you are fully indemnified, not only from loss of life and injury, but environmental liability needs to be addressed.
If you have trees that will be taken down, are they merchantable timber? If so, you want them stacked in a certain location with the stump end pointing away from the fencing.
As to dinero, like my old pappy said, "Pigs get fat, hogs get slaughtered." Money is only the starting point of any oil field negotiation.
Bet you a hamburger that the form the ROW agent drops in front of you does not talk at all about any of these items. Everything will be in its broadest possible terms. And, he will negotiate more ROW agreements in a week than you will in 10 lifetimes,
Oh, make sure your lawyer has done this before. Talk to him about some of the issues that I raised, in order to vet his ability.
AJ Bowman said:
Thanks for the help. We do have a creek on the property but I am not sure if the pipeline will impact it. We are planning on getting a lawyer to look over this deal , but like Mr. Cotton said we do not want to push for more money with possibility of them just skipping us and moving the pipeline somewhere else. I would love to get 600 per rod. It seems like there is a very thin line between being firm in the money you want without being too pushy. Is there any suggestions on how to go about that situation?
Oh, I forgot. Don't let them set foot on your property to survey without a Surface Entry Agreement. You don't want to have any liability attach if somebody gets snake bit or turns a 4 wheeler over on themselves. You also want to address bringing in guns, alcoholic beverages and illegal drugs or workers. I charge $10 per rod for them to survey in the line. I get a copy of everything the surveyor prepares.
What part of Karnes are you in? I do think that I remember that the northern part of Karnes can have some sour product.
As a rod is 16.5 feet, your offer is just under $26.00/foot. Our initial offer for a pipeline in McMullen and Live Oak County (which we've not yet negotiated -- keep me posted!) was just "$15/foot", but I'm hearing that $35.00+ is totally reasonable to ask per pipeline. There are many other considerations, too (price, terms, location, depth, soil qualities used in the trenches, above ground units, maintenance, etc., etc.) -- I'd recommend that you get a good (oil & gas savvy) legal counsel to work with you on this.... Good luck. Keep me posted, please!
Just an update on this topic for Mr. Lark. We received our check from the oil company yesterday. We had an initial offer of $450 per rod. We got an oil and gas attorney In Karnes Co. who was able to negotiate the rod price up to $500 per rod. He also added some things such as the disposal of the trees that they will knock down. The pipeline will be around 5,500 ft. Getting an attorney was definitly worth it in the long run.
Many thanks for the follow-up. Congrats and good luck to you!
AJ Bowman said:
Just an update on this topic for Mr. Lark. We received our check from the oil company yesterday. We had an initial offer of $450 per rod. We got an oil and gas attorney In Karnes Co. who was able to negotiate the rod price up to $500 per rod. He also added some things such as the disposal of the trees that they will knock down. The pipeline will be around 5,500 ft. Getting an attorney was definitly worth it in the long run.
Hi, It sounds like things are progressing nicely. We have an issue in that the mineral owners were never notified of a carbon dioxide 18-inch pipeline being installed. And we have the ingress/egress rights, so wouldn’t the pipeline have an effect on our mineral rights? T Thanks in advance for any opinions on these matters!
Regards, Ralpr
Dear Ralpr,
Mineral owners have no say so in pipeline easements. There would never be a reason for you to be notified. Your ingress-egress rights are only to come and remove the minerals, nothing else. Not hunting, fishing or pipelines.
Dear Mr. Cotten,
Thanks a bunch!
Regards,
Ralpr
Buddy,
Can you fill me in on what leasing values for 2012 looked like in comparing the Summer to the Winter months? You seem well versed and I was hoping you could help me do some comparison research. Thanks.
Buddy Cotten said:
Dear Mr. Bowman,
Does that figure include pre-paid damages? If so, have them issue two checks, appx, say $200 per rod for damages and the balance for consideration. Damages are not taxable, so check with your accountant if those figures are in line, but certainly have them split out.
What I have been negotiating in se Texas is closer to $600 per rod with $200 pre-paid damages included. BUT, I sort of figure out what their options are in going around me and try to make it a bit cheaper to go through me.,
As to fair, I have gotten more and less. I would not argue too much. I have been to Karnes County. Maybe you can get a sendero out of the deal.
Best,
Buddy Cotten