When a pipeline company engages a right of way acquisition company to negotiate the easements, in what manner is the right of way company compensated? Contracted price for service, flat hourly rate? Do they get additional compensation if they acquire the rights of way cheaper than a predetermined budget? The individual that represent the right of way acquisition company indicated that he is paid hourly so he doesn't care how much they pay us for the right of way, but I was wondering if there were some type of incentive to negotiate as low a price as possible.

Tags: compensation, easement, incentive, of, price, right, way

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Does it really matter?

If you are at Best Buy, does it matter if the salesman is commission or hourly.

You can only make the best deal that you can make.  If you don't want it on your property, let them move on to your next door neighbor.

I am not trying to be flippant, just trying to make a point.  Either you want to negotiate with them or you don't.  Too many people have missed too many opportunities worrying about too many variables that are either irrelevant or beyond their control.  Myself included.

Good luck to you.

It doesn't really matter other than to satisfy my curiosity to know if someone with whom i am negotiating has a vested interest in paying me as little as they can. The idea that the right of way company is an independent message courier doesnt hold much water. Nothing would please me more than for the thing to be routed as far away from me as possible.

The O&G industry as a whole has been moving away from compensation on a commission basis to one based upon unit cost or alternately a time and expense basis. At the most, a commission based upon asset value represents but a small part of the total compensation received in nearly all cases. The rare exceptions to this rule are usually relegated to (1) small operators or investor pools (speculative or otherwise), (2) small prospects (where prior knowledge of an area, working relationships or "connections" to landowners/mineral owners are of significant importance, or (3) instances in which the broker is a partner in the deal (where equity is earned or at least partially earned by an interest in the asset acquired).

Acquisition of ROW doesn't fit any of these models. The operator of the pipeline develops its value by transporting product from some point in the field to another, and the investment is repaid and then becomes profitable only when sufficient quantities of product have been either delivered to market or transported from one point to another. The only incentive generally "earned" by the ROW acquisition company is a reputation for delivering ROW on time and/or on budget, thereby earning the opportunity for more work. In a common carrier / eminent domain situation, an analysis of market value further levels the playing field as far as what is offered and what is paid, because FMV is part of the analysis even if the possibility of condemnation proceedings is less than usual. Recalcitrant landowners usually know that if the pipeline cannot be rerouted off of their land, FMV will be the primary basis of their compensation, plus or minus the expense of pursuing condemnation proceedings - in such cases, the acquisition company that attempts to pursue "lowball" offer techniques is largely just wasting their or their client's time.


  If you have no interest in the pipeline being located on your property, you need to arm yourself with knowledge about the laws pertaining to pipelines in your state.  Louisiana and Texas are QUITE different.

I've negotiated with this scum ended up throwing them off my property.

That's what saltpeter in a double-barrel is for, if you ask me.

I've negotiated for a Right of Way and in my case it was a win/win situation.  I was pleased with the outcome.  What good is a producing well, if it can't be brought to market?


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