A gas company landman is wanting to pay us $80.00 a rod for around 160 rods. This price includes damages.Also they are wanting to "purchase" the existing pipeline they abandoned several years ago for $1 per foot in addition to the $80.00 per rod price above. They will not accept a ROW term limit with the option to extend.This is not an eminent domain procedure.They are now stating they will cancel if we do not give them a permanent easement Any recommendations? (The existing pipeline is an 8 inch line)
Derrick, they need that line or they would not have asked in the first place. If that 8 inch line is abandoned, why don't you advertise it's for sale? Do you have any idea of how much that much 8 inch line would cost to lay? If you could get even 1/10th of it's value you could thumb your nose at your present offer. Just a thought that might be worth exploring.
Thanks for your reply Mr. Kennedy. Where would a good place to advertise it for sale be.The property is in Oklahoma. Thanks
Derrick, I would try the paper with the largest circulation in the county in which the pipeline lay. I would not stop there, I would do a google search and call every pipeline operator in the vicinity to see if they wanted to purchase it.
Someone might purchase it from you expecting to sell it to your current buyer at a cost that your current buyer just would not offer an ordinary landowner.
They really want that pipe. The alternative is they can walk away and lay pipe elsewhere which is probably not the best route because they want to buy the existing line AND ROW for another line. I could see them having a nightmare of escalating costs to use a less favorable route with double the rods of your easement, laying two lines or one larger line. The price of steel is outrageous these days, the purchase of an 8 inch line already in place for 10% of it's replacement cost would be a huge savings.
Sell it yourself. A friend did exactly that in Eastern Garvin County, OK. When someone says take it or else, tell them you're not interested in their proposal. They will more than likely up the offer. You are in the drivers seat on this deal.
Great advice Mr. Kennedy and Mr. Moore. I can see there are several different avenues I can take. It will be interesting to see how all of this plays out. It sure is refreshing to have a forum like this where others can make a valuable contribution and help others. Keep up the good work. Thanks
Derrick,
You might want to check out www.pipelineequities.com, there is some info available there that you might find useful.
Good luck,
Randy.
Thanks Randy.I will check into that site. Thanks for the information.
I have spoken in the past with a man in Houston - David Howell at Pipeline Equities. He has written extensively about this and also works for sellers. The last number I had for him was 713-851-4051 and an email of David Howell@PipelineEquities.com. I am in New York not Texas so I presume he will be more amenable to working with you. We were just too far away.
Thanks Paul. I will call Mr. Howell and see how this progresses. Your reply is much appreciated. Thanks
Derrick,
You don't state how big the new pipeline is, but $80 per rod is cheap. I had a pipeline across my property a year ago in Noble Co, OK and I got $120.Rd. Some of the neighbors got about $100.
Unless the easement has expired or the line has been abandoned for several years, be careful selling it. Their are several good companies that will buy this pipe in Kingfisher and west of Oklahoma City. I have bought corner post pipe and pond dam pipe from several of them and they have always been far. $1 ft is way to cheap for 8" pipe.
Derrick, here is a link to an article about abandoned pipelines. There are abandonment issues mentioned in the article that should be addressed in any pipeline ROW lease.
The article is about Texas so I do not know if it is entirely applicable to Oklahoma.
http://pipelineandgasjournal.com/who-owns-abandoned-pipelines?page=...
I was not aware that abandoned pipelines could be sold by landowners. I have always thought that the pipeline still belonged to the pipeline compny even though it was not in use. I would be interested to know how this works out for you. I hope you will let us know even if it is months from now.
Virginia Pflum said:
Derrick,
You don't state how big the new pipeline is, but $80 per rod is cheap. I had a pipeline across my property a year ago in Noble Co, OK and I got $120.Rd. Some of the neighbors got about $100.
Unless the easement has expired or the line has been abandoned for several years, be careful selling it. Their are several good companies that will buy this pipe in Kingfisher and west of Oklahoma City. I have bought corner post pipe and pond dam pipe from several of them and they have always been far. $1 ft is way to cheap for 8" pipe.
Thanks everyone for your input.The new line in question is an 8 inch pipeline. Also the pipeline has not been in use for 7 years. I would assume this constitutes abandonment. I am not sure if there is a time limit for abandonment in Oklahoma or if any new legislation has been passed on this issue. Thanks again.
In New York State we negotiated for landowners a gas gatheriing line easement (no eminent domain available) $55.00 per linear foot for a 20 year easement. 16 inch pipeline. That was for the easement only. If eminent domain exists we have been attaining $15.00 to $35.00 per linear foot, but couched in terms of damages.
Paul, your response is much appreciated. From what I have read $55.00 per linear foot is an extremely good price. Also the fact that you were able to get a 20 year easement is fantastic.Most gas line companies reject a term lease easement and require a "permanent" easement. Congratulations on your negotiation skills. Thanks again
Derrick, we had read that the BLM and the Native Tribes issued leases and were paid by rental or linear foot. We stood our ground and were ready to let them walk away. They stalled for six months, got nowhere, changed leadership and settled in three weeks once they changed leadership. Both sides finally took the position of negotiating from need and not ideology or wishful thinking.
Paul, usually negotiating from a position of strength rather than weakness is the way to go. Apparently, by standing your ground you were able to obtain your goal. I am learning every day from this great forum. Thanks to all.
Derrick, lack of use for 7 years does not necessarily constitute abandonment. "Use" can have several different meanings, in addition to meaning actual gas flowing through the pipe. Check the agreement language on how it defines non-use and abandonment matters, and you may also want to research case law; there have been recent rulings regarding this subject where landowners have asserted abandonment and gasco successfully argues to the contrary even though the pipeline hadn't been in use for quite some time.
Randy.
Randy, I wonder if there are any new laws or pending legislation in Oklahoma or any other state which pertains to abandonment. I can see where this can lead to serious problems if the landowner isn't 100 percent sure and makes a wrong move.Gas companies have deep pockets and I assume very good lawyers. Thanks