I've been approached by Matador Resources for a right-of-way across our land, connecting the Billy Burt well to the Dorothy White (which is a high-value, high-producing well). Wondering if anyone has insight into what prices should be and if this offer is reasonable.
Here are the specifics:
Two 8-inch lines, one for gas and one for waste water
Roughly 160 rods long in total, exact pending survey
Right of way is for 75' during construction, reverting to 50' after construction
Offer is for $45/rod per line, or total of $90/rod for the two lines
We received an offer in Payne Co for $75 per ROD, offer not specific as to how many lines and size of lines. We pushed back and they have already come up to $150 per ROD but we still have not nailed down any specifics. I did hear about someone in Stephens Co getting $250 per ROD, again no specifics. I know much of it depends on size, type, land type, alternate routes, ED, and other factors. I hate it that there is no way to determine if you getting FMV since they don’t have to publish the contracts. One good suggestion I think worth looking into would be if they are going through any or your neighbors property to group together. I would say that the ROW of 50’ after construction seems higher than what I have been reading but that may be due to two lines.
$250 per rod is where it should be, based on the collective diameter of the lines. Having said that, knowing what their options are could move that price up or down. Also, do they contemplate above ground installations?
Almost as important as price, a very good pipeline ROW form is essential.
In that area, you can use the University of Texas Lands, Rate & Damage Schedule which is updated on September 1 of each year. Rates are by size of line. Currently, 6-12" lines are $45 each per rod. However, the University Lands rates are for 10 years, with renewal rates which are currently $35 per rod. If you get a one-time payment, then you should get more than the $45. Also, the ROW is too wide - should be 50 feet during construction and reversion to 30 feet after construction. These lines should be buried at least 36 inches below surface. Make sure that you consider other terms in the ROW form - eg not a permanent ROW, but expires upon termination of use of the lines; access strictly limited to ROW and not to any other surface, otherwise they should pay you for a road; limited to the 2 pipelines only, must pay for any additional lines. You can contact the listed UT Lands representatives who can email you the UT form for ideas. Look at all rates for other matters. Here is link to UT Lands: