Replies to This Discussion

Permalink Reply by Eat Beef on September 21, 2008 at 9:39

Have you read Louisiana Mainstream Gas Services, contract yet? I found a copy of a pipeline contract, at
http://www.allexperts.com/ep/3147-79756/Oil-Gas/James-H-McConnell.htm
"Ask the expert" I didn't like the way everything was for the pipe line company and nothing for the land owner. I wouldn't let anyone put a pipeline across my land unless I received a large amount of money, enough to last for the life of that pipeline and all the problems that may occur in the future. Here is where I read it:

http://www.allexperts.com/ep/3147-79756/Oil-Gas/James-H-McConnell.htm

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Permalink Reply by Kat S8/T18/R15 on September 22, 2008 at 10:38

What determines the annual rental? I am assuming that the previous questions referred to land that was tree farmed. The property we have is 300 '/ 1337' with the proposed pipeline running the length of the property. Lousiana Midstream is asking for 50' of easement for 2 (18") pipelines. They are offering $150 per rod. Half of the minereal rights were leased, but half has yet to be leased due to the property being owned by my husband and his ex. Does it matter that half of the property's mineral rights has not been leased? I assume not, but you never know. Are we leasing easement rights by acre, by rod, or both? Sorry for being ignorant!!

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Permalink Reply by Kat S8/T18/R15 on September 22, 2008 at 16:42

I think I understand what you are telling me, except for the part about our land being 40 acres wide. Our land is 300 feet wide and the depth that they want to run the pipes is 1,337 feet. Is the $3000 figure computed on the 1337 feet at $150 per rod? We are meeting with the company tomorrow and it will help to know more so that we can at least ask pertinent questions. For sure, we are not in any hurry to mar our land for a measley $3000. Thanks for all the info and for your patience!!

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Permalink Reply by Bobi Carr ("parker") on September 23, 2008 at 2:57

Jim,

PLEASE HELP.

I am having problems understanding this one. I was taught a rod was 16.5 linear feet.

If it is 1337 feet long wouldn't it be 81 rods. If that is the case shouldn't it be $12,150 (81 rods x $150).

Am I just confused by the width of the easement.

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Permalink Reply by Bobi Carr ("parker") on September 23, 2008 at 3:32

I just assumed that I had lost my mind.

Permalink Reply by Bobi Carr ("parker") on September 23, 2008 at 3:16

Jim,

Is what Sunny Chaw stated above about timber is correct? If so could it theoritically apply to pasture land as the loss of oppurtunity to grow timber?

In that case wouldn't it be a given that Kats should be able to negotiate $23,025 for her 1.535 acres (1.535 x $15,000).

HAVE I MADE TOO MANY ASSUMPTIONS?

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Permalink Reply by Bobi Carr ("parker") on September 23, 2008 at 3:29

Jim,

If you get to a figure for damages that you are happy with, can you still negotiate annual rents?

Is this commonly done in Louisiana?

If the gas company is entitled to the right of way (by lease or eminent domain), does this in any way lessen your negotiating power for the amount of damages or does it come down to a "predominate going rate".

If you give them a smaller width, does this automatically decrease what the rate per rod is?

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Permalink Reply by Kat S8/T18/R15 on September 25, 2008 at 9:02

Boy, just got back on line to catch up with this thread. I thought I was really loosing it!! I just couldn't make sense of where the formula for the rod and measurement was coming from. I thought maybe it was late and I was too tired to think anymore, so I signed off. We met with the pipeline guy yesterday. They want 75 feet temorary easement with 50 feet of permanent easement. They are planning on laying two 18" lateral lines with the possibility of coming back in about one year to lay another with more pay. They are going to get a timber estimate and come back with a price for the timber, $150 per rod, and possible annual rental fee. We are going to see what he has to say before we think any further. I was wrong in the width of the property - it is 130 x 1337. The pipeline would run the length of the 1337'. We do realize that 50' would utilize a sizeable chunk of this piece of property, however since it is tied up between my husband and his ex it makes the proposition more inviting. Since we are looking at 81 rods with 2 pipeline, should we be asking for more than $150/rod? We have also asked that they reduce the 50' to 10', but that does not seem to be a consideration. Would having a wider path than 10' for the pipeline easement support us asking for more per rod? Also, is there a standard for figuring annual rental? Thanks for clearing this up!! I felt like my head was on backwards. Now, it is just slightly askew which is to say - back to normal!~!!

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Permalink Reply by Bobi Carr ("parker") on September 25, 2008 at 9:13

Kat,

I don't know much but I do know that if they are going to lay another pipe next year, that you should negotiate for more for the next pipeline. Also $200-$275 is what has been reported by many here.

I have a few questions.
1. Are you in Texas or Louisiana?
2. Is the pipeline for marketing gas from a unit that you participate in?
3. Do you have an agreement in your lease stating what damages would be for the pipeline.
4. Probably most importantly. Does you husband have 100% of the surface rights or just half. (If he only owns 1/2, then it looks to me that the company is offering $300 per rod.
Thanks,
Parker

Permalink Reply by Bobi Carr ("parker") on September 23, 2008 at 4:20

Jim,

As far as I am concerned if they are putting a pipeline on my property for development of my minerals I am an easy dog to hunt with.

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Permalink Reply by Kat S8/T18/R15 on September 25, 2008 at 10:50

Jim and Parker, This land is on Blanchard Furrh Road Sec 8 T 18
R 15. We were told that the lines were part of a large infrastructure, but not related directly to our unit. We also asked if they were tying into the Buckley Station which lies directly across the street and were told that the lines were running past the Buckley Station. The way I see it, they have to profit our unit in the long run. I agree that any agreements for future pipeline should be negotiated prior to signing any lease agreement. As to damages, I will check. I do believe that the $150 per rod was the total offer, not my husband's half, but that is a very good point to check out. I have another question for you on this property. Half of the mineral rights have been leased to CHK by my husband's ex and my husband has not leased his half. He turned down $11,000 per acre. This gives my husband an unleased appr 2 acres. In our section there are only appr 23 unsigned acres. It seems that, Jim, your opinion is that leases have peaked and that we should take what we can get. Is this correct? I was of the understanding that we were in a better position to be picked up at a better price before the drilling begins. Now, I am reading that, if half of your section has leased and you have not you are not in a good spot. What is your opinions, guys? Also, thanks for the input on the pipeline. Still wondering what a fair rental would be?

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Permalink Reply by Bobi Carr ("parker") on September 25, 2008 at 12:34

Kat,

I can't offer much of an opinion on the leasing prices, the bulk of my acreage I leased for $200 per acre over a year ago. So I may not be the best source of advice. I can tell you this much no one can tell you what is the BEST thing to do until after the fact. Whatever you do someone will later tell you they would have done it differently and done it better. Hindsight is always 20/20 and this world is full of arm chair quarterbacks. My suggestion is that after you have made you decision, understand that you made the best decision based on your facts at that particular moment in time. We can all HOPE that leases and property values will rebound, but no one can tell you if or when that will happen.
One suggestion that I have is that if you don't need the money, and are set on a particular bonus amount, tell the landman that you are not trying to be unreasonable but this is your figure and that if they can't do it now, you will gladly talk to them after the well is drilled. If you want to lease, let them know, but tell them what you feel you can live with. If this is within their budget they will do it, if not they won't. Maybe it is something they can't do right now but will be able to do in the future. Circumstances change for companies just like they do for individuals.

Back to the pipeline, $200-$275 is what has been reported on this site for the type of pipeline that you are talking about. Ask yourself this question, if they were purchasing those acres, how much would you be willing to take. If this weren't a gas company, but an individual who wanted to buy that property instead of put a pipeline on it, how much per acre would you sell it for. In the case of the pipeline, you get the price of selling the property but get to keep it. If you don't plan on building a structure or growing timber on that property then it is an even better proposition. A lot of these questions are personal questions that only you and your husband can answer. One last question is have you mentally spent any of the money that you would get. Would you be perfectly happy if they put the pipeline somewhere else and you didn't receive any money from it. Also even the $200-$275 price has been quoted for a different area. Talk to everyone that you can in your area.
These are the type of questions that I have had to ask myself. My property is much different so my answers are going to be completely different than yours.
I have not heard any figures for rentals in Louisiana. If I hear of any I will post it.
GOOD LUCK, and more importantly let all of this be a blessing to your life and don't let anyone who wants to second guess your decision be of any impact to you.

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