Pipeline easement rates in Reeves


#1

I live in NM and trying to help my sister. She has been approached for a pipeline easement with Apache. This is near their main line that goes just west of Toyah down towards Balmorhea. She has lease with Apache. What are the going rates? A while back a person on here posted he was able to get $900/rod for a water line in Reeves with 10 year renewable term, CPI adjustments and professional fee paid…he didn’t mention width or other details. I like the idea of 10 year terms …this is the way UT does theirs. Is $1000/rod for 100 ft wide permanent easement too low, too high? Alternatively how much if she does 10 year term with options to renew? Have you all been able to get 10 year terms? Prices seem to keep rising from all the activity in the area. No eminent domain power/threat of condemnation…but this is her operator (or at least an affiliate).


#2

I would like to get information on rates too.
There’s a lot of easement acquisition going on in Reeves County right now - Salt Creek Midstream’s NGL header line. EPIC’s crude oil and NGL lines. Not to mention the many gathering lines needed for all the new wells.


#3

I don’t know how to do it, but it sounds like you both need to contact Lawrence Rayburn here on The Forum. He lives in the area and knows what is going on there better than any other 10 people.


#4

Thank you, I will try to reach out to him!


#5

I’d like to hear what he has to say, too. I have a couple of people that have contacted me with questions about one of the new water pipelines being built into Southern Reeves County.


#6

Those lines (and there are more than one of the gathering lines) are 30 inch gas and oil gathering lines. The UT guidelines project that to be worth up to $1500/rod…I would tell them 10X the UT
guideline, then have your lawyer negotiate something lucrative for you and more affordable/amenable
to Apache…fair to both parties.

ol’ Lawrence in Verhalen


#7

Thank you for the replies. Lawrence, what UT guidelines are you referring to get to $1500/rod?

The packet received is asking for 6 lines (I believe 30in, 20in, 20in, 16in, 16in) within the 100 wide easement. Looking at the UT non-university lessee table, I calculate $704 as the minimum for those lines. So 10X would be $7,040 for a 100’ 10 year renewable easement? That seems really high, even if it’s just the first counter offer. My easements in NM have been well below that in the northern part of the Delaware. But I realize Reeves is the hottest area of the Basin. We just don’t want to come across as greedy since many companies have that stereotype of landowners. Also these lines are for production on her lease.

As an aside, does anyone know some of the more nitty gritty of how UT differentiates “non-university lessees” from “university lessees”? For example, gathering lines serving your lease likely will be installed by a separate legal entity (midstream affiliate) than the operator your lease is signed with. **Does that mean the easement is technically for a non-university lessee - meaning you should use the higher rate schedule? Or does non-university lessee mean the easement is for a 3rd party that you have no relationship with, either directly (like your operator) or indirectly (like an affiliate of your operator). I’m asking to make sure we’re using the same rate schedule as UT does.


#8

Nah, Kathy…$7040/rod is not out of line for that many large diameter lines in a 100 foot right of way
but you’re gonna HAVE to have your lawyer really dig in hard for a 10 year renewable ROW…they’ll want to make it a one time fee PERMANENT ROW. Your lawyer will have to earn his money to get
a renewable clause. Always use the non university lessee rate and use the 10X rule of thumb I was telling you about. The lawyers are going to make the best deals they can for their clients to earn their money on both sides.

ol’ Lawrence in Verhalen


#9

I haven’t seen anyone get close to $7000/rod.


#10

Then it’s about time, don’t you think, Wade?

They NEED the pipelines to get the production to refiners and market…they’ll pay what they HAVE to to get it done.

ol’ Lawrence


#11

Agree. Just hoping it becomes reality and not a “pipedream” (do we get extra points for puns on this site?).


#12

How much, ball park, should I be getting for pipeline and easement, oil pad in blk72m track12 and ab3844?

Thanks Lawrence. I am an out of state land owner and I am completely in the dark.

Mary


#13

Mariettta,

About $25,000 for the pad and depending on if its one or multiple pipelines in the proposed right of way…$1500/rod on up.

ol’ Lawrence in Verhalen

westtxlawrence@aol.com


#14

What have you seen, just to get an idea for 100’ wide, 6 lines? If a landowner is too “difficult” I’d think they would try to seek out your neighbor, since gathering lines tend to follow property lines.


#15

Kathy, sorry but I represent too many people in that area to comment on a figure


#16

Oops. Kind of new here and just now read your profile. Sorry!


#17

Thanks, Lawrence. Luxe is offering us 400. per rod. There are 160 rods and four pipelines. I thought that must be absurd since my land sits on the Delawre basin and is highway frontage.

Mary


#18

Mary, are those gathering lines, or transmission lines? Does Lux have eminent domian power? The negotiations work different depending. We’re currently in negotiations for gathering lines.