Need Help with Pipeline Lease

Hello,

Last night a guy from Oxford Oil came to my house and handed me a contract to put a pipeline through my place in Guernsey County.  He acted like I should just sign it because "it would get me Christmas money." They are paying $10 a foot.  I don't know anything about piplelines....

What I want to know is, can they force me to do this?  I asked him what would happen if I said no.  He hemmed and hawed and said that they would have to go around and it would be a long way. He stated that I am the "last piece in the puzzle."

$10 a foot does not sound like it is a very good deal either.

Also, I skimmed the contract and basically it gives Oxford (or whoever) the right to have regulators, compressors, etc. on my land.

Before I go to an attorney, does anyone have anything to say about this?

Sue

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Permalink Reply by Mark McGrail on January 30, 2014 at 11:15am

Tracy,

I would get compensation for all trees of value no matter if they are marketable now or not. Say you have some walnut that is too small to sell right now, in a couple of years they might be able to be sold. But if you cut them now you lose that future income. You should be paid for that loss.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on January 30, 2014 at 6:47pm

Walnut are unique - used for 'smaller block pieces (like Osage Orange or Pink Ivory...) - Walnut is used in knife handles, gun stocks & I'm sure other 'artzy' jewelry boxes & such...they can have unique burling qualities that...walnut can be valuable because it doesn't have to be 'stand lumber diameter' size to cut & utilize for these UNIQUE situations. Just something off the cuff...

As one light lights another, nor grows less - so nobleness enkindles nobleness. Call some knife artisans & see what they share...worth a phone call (and education...).

Mark - it's not just 'paid for that LOSS', but let's 'reverse that' thought line process...it's what there would be in FUTURE GAINS (you may only be 5, 7, or 10-12 years out from REAL gains in value (you don't know if there will be 'veneer' - that's big bucks!...

...what diamiter of trees do you have at present? Maples? - THEY need to be 10" diameter before can be tapped for syrup production...people will arrange a 'lease agreement' with you to TAP your Maple trees for a period of years...

Good place to begin - Penn State Forestry, I'd suppose...ask them about the unique 'bush' hazelnuts that they've been developing...just a thought.

Other than that - I know not anymore...

Permalink Reply by INVICTUS on January 24, 2014 at 11:42pm

Billy Bob Meeker.

I would like to talk to you in order to exchange info in personal experiences re: Pipelines.

My current and dealings with all of this are directly in the heart of the developing Utica.

Please track my "handle" on this site to see where/what I've been thinking about.

BTW, I've NEVER heard or been able to confirm any type of recurring payment or "Wheelage" being paid, at least in Ohio by the pipeline people.

And, as a message to the group:

If you signed a lease, it WILL have clauses in it for the ability of O/G to remove it from your property, always via at least one line.

There are many nuances to that last statement I just made and we all need to get more familiar NOW with these implications as they relate to our leaseholds.

I cannot stress enough how important the pipeline issue has and will become to landowners as the Utica gets its infrastructure developed.

Regards, INVUCTUS

Permalink Reply by lance on January 25, 2014 at 2:37am

Hi, I am currently in negotiations with Mark West and I have had an excellent experience with their ROW agent. I am not at liberty to discuss details at this time because my agreement says not to disclose any info regarding payment. But I can say they are very land owner friendly and are willing to accommodate me with any of my concerns. I do have a good attorney working on this with me and I expect to close this deal soon.

The main thing is, don't get too greedy for money because they will find a way around you. As a matter fact, that is the only reason Mark West wants my property is because a land owner close by me won't cooperate so they are going around them. Good for me... I like the idea of being apart of this boom and lessening our dependence on Arab oil. From I've seen in my area, the ROWs look better than what they did before. I'll have full use and enjoyment of the land, exept for building a house, pond or plant trees. Which I didn't want to any way. My line will consist of a 20" trunk line and 4 smaller lines beside that eventually. It's my understanding that when there is a pipe line close by it could mean a better chance of being included in a drilling unit. I know they don't always put a well in based on Pipe line proximity, but we are sitting right in the middle of where the oil is so, any where around here would be good for a well. I was told I'm in the "sweet spot" area... This oil and gas boom will mean financial security for my kids and grand kids long after I'm dead and gone. We must have a pipe line infrastructure to make all this happen. So, I say come on with it! I welcome it with open arms and count it as a blessing from God, an answered prayer. GO UTICA!!!!       

Permalink Reply by Billy Bob Meeker on January 25, 2014 at 3:12am

INVICTUS, I sent you a Friend request.

I agree, I have never seen any solid documentation of a renewable pipeline ROW lease in Ohio.  But, I have seen documentation of such agreements in New York state.  So, they do exist.

Secondly, I'll try to attach a copy of a recent new article from the local Harrison County (OH) newspaper that discusses a very recent deal between Harrison County and Mark West.  In this deal, the county is leasing via a renewable lease, with yearly payments, approximately 22 acres of land where the source processing plant for the Cornerstone Pipeline will be located.  If the O/G company can lease the land for the entire processing plant, they sure as heck can, IMHO, lease the pipeline ROWs to get the gas to Canton!!

I agree with you, wheelage, though a nice concept, is probably not practical.

Unfortunately, most of the gas drilling leases have already been signed in Harrison County and they do include the pipeline provision to get the gas from the well to a collection line.  If the landowner is lucky, the lease limits the pipeline to only gas collected within the drilling unit.  Otherwise, it could be a problem for the landowner.  No one was thinking much about pipelines several years ago when all the drilling leases were being signed.

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Permalink Reply by kris miller on December 27, 2013 at 4:54am
Whoa pump those brakes 10 bucks a foot that's robbery. Temp above ground 20 to 35 a foot underground 40 to 65 and don't budge. Also make sure exactly what they want to do like valves pig launchers etc. I had a clause put in my contract that stated when the line becomes dormant it becomes mine and if they ever sell the pipeline I get to renegotiate. I'm sure I still have pics if you'd like message me and I'll send em to you. I have 128 acres there now about 4,000 feet of pipeline on my property it took about a year to complete. They will make the right away 75 to 100 feet and they take it. No permanent structure can be built on line that's why I had the abandonment clause added and yes I'll probably not see it go dry in my lifetime but you gotta think down the road. Remember it's your property tell them where you want it they'll try to go cheapest route . They wanted to run it through the middle of my field I refused and it got laid next to road I'll never build there. Then there are the access roads they'll need to build another reason I wanted it next to road. Be prepared for a major construction zone it's nothing to have 3 cat d6 bulldozers and 4 cat 336 excavators running morn til dark. If you treat the guys right they have no problem leaving keys in equipment he'll they gave me a cat key pushin brush with a d6 is a lot of fun. Anyways 10 a foot is robbery the lowest I've ever seen is 25 a ft in my area and he has serious buyers remorse. Remember it's your land not theirs and it's gonna be there forever FOREVER !
Permalink Reply by lance on December 27, 2013 at 2:08pm

WOW! What a post! Thank You!... Mark west want to put a 1000 ft of 20" and then 4 smaller ones beside that on my land in Guernsey county ohio. I was thinkin 35 for the 20" and 25 for the others. Maybe I should ask for more? Thanks Kris

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on December 31, 2013 at 6:47pm

kris - good advice. Here's that Texas saying that NEEDS to become imbedded in our rhetoric concerning G/O endeavors:

*Texans say: "Gaswells are TEMPORARY, *PIPELINES are FOREVER*!!!"

Put that in your pipes, folks & NEVER forget that one! (sounds like you're havin' fun, kris!)

We *NORTHEASTERN Amer-ICAN HARDHEADS* should get thicker skin & knock on our heads once in a while to KEEP our heads about us, OR they'll have 'OUR HEADS' on their plate for THIER 'lunch' - CHOMP!

This ain't softball, folks - they're playin' HARD BALL - their playin' for KEEPS! *Better learn to VALUE what you've invested YOUR 'time, $$$, & energy' into - YOUR 'life-investment'. your FAMILY's 'investment'. This is IMPORTANT, folks - make *2014* be the year that YOU get seriously *down to YOUR business*.... Keep your house in order - put on your HARDHEAD! - and 'do right' by yourself!!! ***because NO ONE ELSE cares about YOU like YOU can or do!!! - got that?...either you will or you won't...

As one light lights another, nor grows less - so nobleness enkindles nobleness. Never give up! Only the GOOD things 'take time'!!! Make 2014 your best year in ALL ways - to thine OWN SELF be *TRUE*!!!

Permalink Reply by Nancy S on January 5, 2014 at 3:21am

Kris: I'm sending you a friend request so I can send you PM.  I'm in same boat.  Markwest approaching me to put a pipeline on my land.  I'm in Harrison County.  ....Nancy

Permalink Reply by Billy Bob Meeker on January 5, 2014 at 4:48am

Those who have previously mentioned the FOREVER nature of a pipeline have hit the nail on the head.  The landmen will talk in glowing terms of the “partnership” to be created between the landowner and the pipeline operator …. that’s BS.  There is no “partnership”!

Even though it is a right-of-way agreement, you are essentially selling your land to the pipeline company, they are keeping it forever and are allowing you a few limited privileges as to how your can use the ROW surface.  But, they have the final say in how the land can be used by you.  Unless your signed ROW agreement is extremely definitive as to your privileges, the pipeline company can decide whether or not something you are doing on the ROW is acceptable or not.

Incidentally, one of the privileges you get is the burden of paying the property taxes on the ROW forevermore.  You pay the property taxes, not the pipeline company.  Another privilege you get is that of seeing your property real estate value decline as a result of the pipeline.

They will also assure you that the ROW will be released and returned to you once they no longer have use of the ROW.  But, you have no way to ever know if the pipeline buried in the ground is in use or not.  That pipeline could remain buried and unused for decades and they can claim it is only in “reserve” or some other nonsense.  And how will you ever know if the pipeline is being used or not?  And why should they ever release the ROW?  It is an asset to them …. but a liability to you and your property value and an ongoing tax burden to you.

You need to think long and hard about the advisability of entering into a pipeline ROW agreement.  Unless you REALLY NEED the one-time cash payment for the ROW, there is no benefit, or up-side, to the landowner.

Permalink Reply by Bob on January 5, 2014 at 5:41am

If you don't want the line on your property just say no and let them move on to other options.  Also remember when you start getting greedy it only takes a 90 degree elbow in the line and you get nothing.  Just sayin!!

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on January 5, 2014 at 8:01am

Bob - yes, one MUST 'weigh the options' & make the best sense out of ALL of this soup. Would you be willing - IF the line was running here vs. there...HOW much property one is weighing in the balance has considerations - Bob's 'greedy' & the 90 degree elbow is a consideration that needs to be addressed by the individual as well...

...'weighing the balance' - a hefty thought indeed...what one can & can't live with or without...do try to take all matters into consideration when making a decision such as this... is this the best or worst possible decision - is my property in a place that really won't have a shot at being developed - even 50, or 100 years out...

Very complex mind-play. These are things that this areas landowners has just basically had 'dumped in their lap' & it can be daunting. Daunting, BUT able to be comprehended & discussed and thought out. There are ALWAYS good, better, best scenarios to consider - on some things you get the bear & on others - the bear gets you...BUT you, at this time, have the option of the mental juggernaut of doing your best FOR YOURSELF...and that's all one can ask for. Good 'problems' to mentally have to deal with...

...Know this - it's NOT like having a farm & deciding where to put your fence, or a drain pipe to create a crossing into a field you want to cultivate - this is MUCH more 'permanent' & important in consideration.

Like a said before. Texas saying: "Gaswells are 'temporary', PIPELINES are ***FOREVER." 

As one light lights another, nor grows less - so nobleness enkindles nobleness. 

***FOREVER*** (unlike a 'marriage' - *this is PERMANENT, NO 'divorce' here!!! - helps you to think better about 'land & pipelines' in THAT respect...)

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