MIDLAND –A record $310 million was raised this week in the 120th lease sale by the Board for Lease of University Lands. The sale marked the third consecutive record for earnings.
The lease sale, held Sept. 21, added $310,124,021.30 to the Permanent University Fund, the public endowment that helps support institutions in The University of Texas System and the Texas A&M University System. The previous record for a University Lands lease sale was in March 2011, when $249,833,843.98 was raised. In September 2010, the University Lands lease sale netted roughly $207 million, which was a record at the time.
In all, 145,253 acres were leased in the latest sale, bringing the total University Lands under lease to 1,452,253 acres. The sale offered a total of 372,163.177 acres in Andrews, Crane, Cooke, Upton, Reagan, Crockett, Schleicher, Pecos, Ward and Winkler Counties. Sealed bids were received on 315 of the 764 tracts that were offered.
"Wednesday’s sale is a milestone event which greatly benefits The University of Texas System, the Texas A&M University System and the people of Texas,” said Jim Wilson, a Texas A&M University System regent and a member of the Board for Lease of University Lands. “We hope and believe the oil and gas industry will remain strong in our state for the foreseeable future, and we believe the University Lands staff will continue to offer interesting opportunities through the innovative use of our asset base.”
Wilson thanked University Lands Executive Director Jim Benson and his staff for producing a successful sale.
The highest single bid was submitted by ConocoPhillips Company on a 684.9-acre tract in Upton County. The bid of $5,579 per acre totaled $3,821,735. The highest per-acre bid was $10,000 for an 80-acre tract in Andrews County, won by PDC Energy.
ConocoPhillips Company was the overall top bidder, buying 63 tracts totaling 36,581 acres for $173,495,534.51. Other high bidders were Samson Lone Star LLC ($37,764,531.29), T. Verne Dwyer ($27,627,465.69), Pioneer Natural resources USA, Inc. ($20,525,724.61) and Essex Exploration, LLC ($20,463,015.69). The degree of interest in oil and gas leases was not only evident by the total bonus of the high bids, but also by the fact that more than $177,000,000 in low bids will be returned to unsuccessful bidders.
Approximately 656,000 acres of University Lands currently are not under lease, but Benson said growing interest in oil and gas leases, coupled with improving technology, likely would lead to increased leasing activity in the future.
The next sale is scheduled for March 21, 2012. Information about sales may be obtained from the office of University Lands, P.O. Box 553, Midland, Texas 79702, phone: 432-684-4404. Additional information about University Lands, including oil and gas well and production data is available online at www.utlands.utsystem.edu.
The Board for Lease of University Lands is composed of the commissioner of the state's General Land Office and regents of the University of Texas System and Texas A&M University System. The Permanent University Fund is a constitutionally authorized endowment fund that benefits the 27 institutions of the University of Texas and Texas A&M University Systems.
The University of Texas System is one of the nationâ€™s largest higher education systems, with nine academic campuses and six health institutions. The UT System has an annual operating budget of $13.1 billion (FY 2012) including $2.3 billion in sponsored programs funded by federal, state, local and private sources. Preliminary student enrollment exceeded 211,000 in the 2010 academic year. The UT System confers more than one-third of the state's undergraduate degrees and educates nearly three-fourths of the state's health care professionals annually. With more than 87,000 employees, the UT System is one of the largest employers in the state.