vacated road wanted by oil company

have a freind who has a vaccated road on his property it starts at begining of his property and travels alongside it area asking to be used is roughly 15feetx1100feet oil company is wanting him to sing a lease they came out today and said would be back tommrow with lease and pay for friday offering over 2000 under 3000 is that good

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Permalink Reply by Mike C. on April 17, 2013 at 12:06pm

a lease for the road?   If so, how long is the term?  Will they need to build the road up to the standards they need?  Is this road near a home? 

 

A lot of factors to consider.  So depending upon the length of the lease the price may be a great deal and it may be a royal pain in the backside.

Permalink Reply by mike james on April 17, 2013 at 12:11pm

Term will be indefinatly,It leads to pipeline.Road will need to be built up and it is about a 100 feet from the house.

Permalink Reply by Mike C. on April 17, 2013 at 12:16pm

That is a ton of traffic going by the house.  While the money sounds ok I would request that the lease is on a term of years with some sort of renewals worked in.  Work in sound proofing buffers between the road and the house.  You will also want to be clear that they are to be maintaining the road.  Be specific so that your friend is not dealing with a long term problem.  Good luck.

Permalink Reply by mike james on April 17, 2013 at 12:24pm

thank you

Permalink Reply by Jim on April 17, 2013 at 12:30pm

Find out what the cost/foot would be to build a road from scratch and maybe give them a 3% discount.  If this is strictly for access across your property and you are receiving no benifit, find out what commercial property values are in your area, even it you are out in the sticks.  Charge for the land and then charge for the road construction.  Add in a royalty off the pipeline .  Get a lawyer.

Permalink Reply by Eric on April 17, 2013 at 1:01pm

make sure its a vehicular access only and does not turn into a pipeline attachment easement.

Permalink Reply by Jim on April 17, 2013 at 1:37pm

Good point Eric. Your statement has surfaced a law I once read a long time ago regarding road easements, back when a right of way was just called a "way"

From my memory, here in Ohio, if an easement for ingress and egress becomes used by 3 or more people, the easement becomes a "PUBLIC" easement or road. You could now have a public road on your land and then pipelines and powerlines could be installed without compensation.  You will need to limit who can use your land.  You will need a lawyer before you sign anything. 

Permalink Reply by mike james on April 17, 2013 at 1:49pm

Not sure I understand Jim my buddy will not be building road up himself the oil company will also he is not leased for oil and gas he was told to take water sample out of his ponds and put on shelf for later date.

Permalink Reply by wyalusing jim on April 17, 2013 at 2:06pm

merely taking a sample of water and putting it on a shelf will not accomplish anything unless you think you might get thirsty someday.

baseline water samples must be done with a certifiable chain of custody of the sample throughout its' journey to a lab for analysis, and the sample must be taken in accordance with established practices, or the sample and any test results are worthless.

anyone could take a sample from anywhere and say it was from anywhere they chose otherwise. if the sample is used as the basis for a legal claim, it must be able to be entered as evidence.

if your friend has no gas lease, i would suggest that he use the road as a lever to get a good one. the road agreement may be worth thousands, but a gas lease may be worth millions in bonus and royalties if the acreage is substantial enough.

the highest and best use for rural land in some cases, is the development of its mineral assets, not the pennies that rights of way generate for the permanent disruption and loss of value that they create.

wj

Permalink Reply by mike james on April 17, 2013 at 2:09pm

thanks you I will be talking to him later anymore insight i could tell hil would be great!

Permalink Reply by Jim on April 17, 2013 at 2:09pm

Mike,

Figure out the construction cost of the road in it's present condition.  Example, I do not know what the actual figures may be .  If a new road cost $200.00 per foot to build from scratch and the company spends $50.00 per foot to improve, you are entitled to $150.00/foot.  "His Pond", Sounds like the company wants to also use the road to haul water or run a pipeline from the pond to the drilling site down the road.  Don't let someone use your land for nothing just because you are not leased.  He can sell the water by the truckload of by the gallon or by pipeline.  Your friend needs a lawyer.    

Permalink Reply by Eric on April 17, 2013 at 2:18pm

be sure your friend has abandonment language and right of use also. Restoration and maintenance needs to be defined as well.  15 feet is too small to be a viable roadway for anything larger than a 1 ton truck.

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