Ward County pipeline easement question

A Trust I work for received a pipeline easement and right of way agreement. The initial offer is $55/rod. There is currently nothing on this land. It is co-owned by several entities.

Anyone have any recent offers in Ward or Reeves I can compare this to?

The agreement says that an Exhibit A survey plat is attached which shows specific things, when in reality a google map with a red line across it was attached. We did not get the real survey until I specifically asked for it two weeks later. When I got it I saw that the actual path was quite different than the one shown on the google map, and that the 125 proposed rods was actually 261 rods.

No appraisal. The woman at Lonestar Land Services said they won't do an appraisal until they take someone to court. There is time pressure (based on the letter date), she says construction is imminent.

I've done some reading... TRP v Denbury, etc. These are the only surface rights the Trust owns, so I don't have prior experience on this front.

Any thoughts on going rates, or on the seemingly haphazard nature of the offer?

I would inform them that construction is not as imminent as all that if they are just now seeking a ROW agreement and I would question them about the discrepancy in the maps and the offer. If you are in Texas, I would record any phone calls but I would inform them I prefer to do business by mail and that any letter they send should be the original and signed in blue ink.

When it comes to a ROW agreement I would go ahead and reach for a larger hammer and seek help from a professional who negotiated them frequently. This would not absolve me from learning all I could so I would have a chance to determine if they were doing a competent job or not but I consider it likely they could know something that had not occurred to me. I think it would be money well spent.

Dear Ms. Gifford,

The first question that comes to mind is was an actual survey done on the property? If so, who granted permission for them to enter? Without permission, they are in trespass.

Equally (or more) important is the easement agreement itself. A wonderful article was written by Eric Camp. A copy is located here: http://www.mineralrightsforum.com/profiles/blogs/pipeline-easement-and-right-of-way-agreements-a-landowner-s-list

In West Texas, most pipeline companies will want to use a comparison to the University School Lands Damage Schedule. A copy of that schedule is located here: http://www.utlands.utsystem.edu/forms/pdfs/rate_damage_schedule.pdf

NOW, you have a floor. The school land schedule lists the minimum that they will accept. There is no maximum. Also, the school land will not have an easement with a term longer than 10 years without a renegotiation. We tend to negotiate in terms of multiples of the school lands floor.

To give you an idea on recent negotiations that I have had in Reeves and surrounding counties in the past 6 months or so.

$196 per rod initial. 10 year renewals at $150 per rod, using a CPI escalation. Limit of 5 renewals.

$345 per rod, perpetual

$165 per rod for a 4"line

As to your question as to appraisals, be very careful that you do not shoot yourself in the foot. An appraisal is for the value of the property, in acres. That is not the measure of damage. The measure of damage is the highest and best use of the land. Also, if there is not an existing line that they are following, there is collateral damage to the balance of the property by the fact that there is a pipeline transversing the property.

Location of the line is very important. You want the line to follow the property or fence line if possible rather than the bifurcation of the acreage.

There are a lot of factors that come into play -- way too many to discuss here. Most pipeline companies will pay for your lawyer or negotiator (or at least part of it).

Also, it is best to slow the negotiation to a crawl. Time is on your side. As they get closer to the construction date, then they likely will raise the rate that they will pay to seal the deal. I have negotiated several easements that were within hours of suit being filed.

You have to have courage to play this game.