Penn Virginia Pipeline ROW

[Eric_SL]

Penn Virginia wants to pay a royalty of .000290 for an oil pipeline that needs to cut through our property. That is $290 for every million dollars in oil that passes through. I am not greedy but that seems awfully low and that they are throwing their weight around in a “Take it or Leave it” attitude.

It only passes through my property with 4 owners, so it is not like the pipeline is being split with 100,000 people on its way to the East Coast. Any thoughts or ideas? Is it worth getting a lawyer and trying for a better division order number for the royalty? Is that about the right price and I am getting a good deal compared to others?

[TennisDaze]

Volume will depend on diameter of pipeline and a large line will transport a lot of oil. I am not sure how the value of the oil volumes will be determined by the pipeline and how you will be able to audit. I do not know about the rate, but it would depend on the length across your land. If every similarly sized tract is paid a royalty, the cumulative royalty total could be quite high. You should consider consulting an attorney about the written agreement.