Friday, April 24, 2009

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115th Lease Sale Nets More Than $2.5 Million for Permanent University Fund

MIDLAND – The Board for Lease of University Lands awarded 65 oil and gas leases covering 21,689.357 acres receiving total bonuses of $2,518,271.89 in its 115th oil and gas lease sale on April 22.

The funds are deposited into the Permanent University Fund and invested for the benefit of The University of Texas System and The Texas A&M University System.

The average bid per acre on the leases awarded in this sale was $116.11. The high bid of $161,256 was offered by Energen Resources Corporation on a 640.7-acre tract in Ward and Winkler Counties, Texas. The highest per acre bid was $561 per acre on a 159-acre tract in Andrews County won by Tierra Exploration, Inc. Approximately 21,689 acres were leased, bringing the total University Lands under lease to 1,070,587 acres.

Commissioner Jerry Patterson, Chairman of the Board for Lease of University Lands, noted; “Clearly, the depressed oil and gas prices currently in place were reflected in the bonuses paid at this lease sale. Nevertheless, it is gratifying to see continued industry interest in University oil and gas leases.”

The top five bidders were Larry G. Phillips ($403,993), Energen Resources Corporation ($394,748), Pioneer Natural Resources USA, Inc. ($314,472), XOG Operating, LLC ($279,901), and Henry Resources LLC ($227,849).

A University Lands official indicated that slightly more than 1,000,000 acres of University Lands acreage are currently unleased; however, as oil and gas prices rise, leasing activity is expected to follow suit.

The Board for Lease is composed of the Commissioner of the General Land Office and regents from the UT System and the A&M University System. Oil and gas bonuses and royalties earned from University Lands are deposited in the Permanent University Fund, a constitutionally-created endowment 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 UT System by the state of Texas in the latter part of the 19th century. Over the years, these activities have directly generated more than $3.65 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 online.

About the University of Texas System

The UT System is one of the nation’s largest higher education systems, with nine academic campuses and six health institutions. The UT System has an annual operating budget of $11.5 billion (FY 2009) including $2.5 billion in sponsored programs funded by federal, state, local and private sources. Student enrollment exceeded 195,000 in the 2008 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 healthcare professionals annually. With more than 84,000 employees, the UT System is one of the largest employers in the state.

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