Right of way and rod price

Texas Mineral Rights Reeves County, TX
1

Good evening,

I have a two-fold question.

a) Does giving right of way for a pipeline impact the future price of the land/minerals?

c) Section 8, Block 4. I am offered $80 per rod for a 12 in diameter pipeline. This looks really low. Any thoughts?

Thanks,

PKA

2

a) Not an expert but pretty sure the answer is no

c) Know of $200/rod for ROW paid in the last 6 months in Block 4

3

Thanks a lot.

4

The going rate for a 12" pipeline based upon the current University of Texas Rate and Damage Schedule is between $64 and $120 per rod for a non-mineral lessee. The offer of $80 per rod is not out of line with the market, and I have had numerous owners with land in Blocks 4 and 5 H&GN agree to grant pipeline easements for a single 12" pipeline with compensation between $80 and $120 per rod. These were done in 2017.

Dial

5

Your comments are greatly appreciated. Thanks.

6

Dial, at $80 to $120 per rod—was this for a permanent easement or for a 10 or 20 year term?

7

Some owners wanted permanent (but terminates upon non-use), and some wanted 10-year renewable. We offer permanent, but will do the 10-year if asked.

8

Pierre, we contacted an attorney and he negotiated the price and terms. This was in Nov. 2016 and if my memory serves me we got around $200 per rod and a ten-year lease. I would have to dig out paperwork and see for sure.

9

Thank you. I get just negotiate the same $200 per rod.

10

Nice! That’s 250% greater than what they initially offered - way to go.