Carrera is telling me they are paying $80.00 a rod. That seems awfully low to me. Anyone have any other information on them?
State, county, and area?
Oops, thought I was in the Dewey County, Oklahoma group.
Dear Ms. Schomp,
Does Carrera have condemnation rights for the line?
What is the line size?
Is the use for a single line or multiple lines?
Is the proposed route in an existing pipeline corridor or is it a frontier line?
Best,
Buddy Cotten
no condemnation rights, 24", single use, frontier line
This falls in the category of what I would do. I would set a price of $1000.00 per rod and watch them swoon.
If they don't have condemnation rights, they need your permission - they cannot force their way, unless it is on the lease that is producing. If that is the case, they might not have to pay anything. But, that I doubt because of the size of the line.
They WILL tell you that that is just a ridiculous price and that they have not paid that amount to anybody. My response would be, "You're right. I am sorry. It is ridiculous. The rate is now $1150.00 per rod. Would you like to continue to negotiate?"
You need to be prepared to take zero if you take this approach.
Buddy CottenEntering into any contract with any kind of business in O&G, I always ask myself if there is enough money in it to pay out of pocket for a lawyer to go to court and enforce the contract. If there is not enough money for a $20,000 lawsuit, the company will know it and likely do whatever they please and make it right after a long expensive battle if you sue them, possibly settling on the courthouse steps the day of trial if they are certain you will win.
Make sure it is so inconsequential that you are willing to just walk away, or that there is enough money involved to make it worthwhile to enforce the contract before you sign.
Not making money is infinitely superior to going in the hole.