Contact: Anthony de Bruyn, (512) 499-4363

Date: November 18, 2004

UT System News Release

106th Lease Sale Earns $34.5 Million for the Permanent University Fund

MIDLAND – The Board for Lease of University Lands awarded 143 oil and gas leases on Wednesday (Nov. 17) for bonuses totaling more than $34.5 million. The monies will be deposited into the Permanent University Fund.

Leases receiving high bids were located in Andrews, Crane, Ward, Loving, Winkler, Pecos, Upton , Reagan, Crockett and Schleicher Counties. Approximately 71,618 acres were leased bringing the total University lands under lease to 1,182,943 acres. The sale was the 106th oil and gas lease conducted by the board.

Bonuses paid in 2004 totaled $73.5 million, the highest amount ever received by University Lands in a single year.

R. H. "Steve" Stevens, Jr., vice-chairman of the Board for Lease of University Lands and a regent of the Texas A&M University System said, "The results of this sale clearly indicate there is a continued sense of optimism in the Permian Basin oil patch. We greatly appreciate the support industry has provided for higher education in Texas over the years in their pursuit of oil and gas on University lands."

Regent Stevens, a six-year veteran of the board, noted that this was his last lease sale and remarked, "I have enjoyed working with the Board and I am pleased with how competently the business of the state has been taken care of by Steve Hartmann [executive director of university lands] and his staff. I applaud them."

In a continuing effort to support the petroleum industry's leasing and development activities on University Lands, the board will schedule two oil and gas lease sales in 2005, in April and October.

The Board for Lease is composed of the Commissioner of the General Land Office and regents from the University of Texas and Texas A&M University Systems. Oil and gas bonuses and royalties earned from University Lands are deposited in the Permanent University Fund, a constitutionally-created endowment fund that benefits institutions in the two university systems.

The board is responsible for overseeing the oil and gas activities on 2.1 million acres of Permanent University Fund lands spread across 19 West Texas counties. This land was dedicated to The University of Texas System by the State of Texas in the latter part of the nineteenth century. Over the years, these activities have directly generated over $3.6 billion held as an endowment trust for The University of Texas System and Texas A&M University System.

Information about these sales may be obtained from the office of University Lands, P.O. Box 553, Midland, Texas 79702-0553, telephone (432) 684-4404, and fax (432) 682-7456. Additional information about University Lands, including oil and gas production and well data, is available on the Internet at www.utlands.utsystem.edu.

The UT System has 15 campuses, including nine academic and six health institutions, and an annual operating budget of $8.5 billion (FY 2005). Student enrollment is projected to exceed 185,000 students in the 2004 academic year. The UT System confers one-third of the state's undergraduate degrees and educates 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.