University Lands’ Oil, Gas Lease Sale Nets Record
MIDLAND – A record $207 million was raised in the University Lands’ 118th oil and gas lease sale in Midland on Sept. 22.
Proceeds from the record sale, which are deposited into the Permanent University Fund (PUF) – benefitting the University of Texas System and the Texas A&M University System – eclipsed the previous high of $52.8 million set in March 1981.
A total of 190,600 acres were leased in 12 West Texas counties, bringing the total amount of University Lands under lease to 1,193,437 acres. The regular sale offered a total of 260,890 acres in Andrews, Gaines, Ector, Crane, Upton, Reagan, Crockett, Irion, Schleicher, Pecos, Loving, Ward, Winkler, Terrell and Cooke Counties. Sealed bids were received on 190,600 acres, which represent 346 of the 499 tracts that were offered.
A total of 581 bids were received for the 346 tracts that were leased in the regular sale. Eighteen companies submitted successful bids, which ranged from a high of $3,587.00 per acre to a low of $54.94 per acre. Winning bonuses for the regular sale totaled $207,248,947 for an average of $1,087.35 per acre for 190,600.634 acres.
The highest single bid was submitted by T. Verne Dwyer on 640 acres for tract No. 3, being all of Section 2, Block 6, in Gaines County. The bid of $3,250 per acre totaled $2,080,000.
The highest per-acre bid of $3,587.00 was for an 80.913-acre tract located in Section 26, Block 5, in Andrews County, which was placed by Steven W. Horn.
El Paso E&P Company, LP was the overall top bidder, buying 203 tracts totaling 123,636 acres for $181,246,309. Other high bidders were T. Verne Dwyer ($13,362,748), Chalfant Properties, Inc. ($3,410,276), San Luis Energy, LLC ($2,076,541) and J. David Williams ($1,957,901).
The degree of interest in University Lands’ oil and gas leases at the Sept. 22 sale was not only evident by the total bonus of the high bids, but also by the fact that more than $52,000,000 in low bids will be returned to unsuccessful bidders, said Steve Hartmann, executive director of University Lands.
Hartmann noted that approximately 900,000 of the University Lands’ 2.1 million acres are not currently under lease. He added that industry optimism, coupled with improving technology, will likely lead to further robust leasing activity in the future.
In a continuing effort to support the petroleum industry's leasing and development activities on University Lands, the Board for Lease of University Lands will continue to schedule two lease sales each year, in March/April and September/October. The next sale is scheduled for March 30, 2011. Information about these sales may be obtained from the office of University Lands, P.O. Box 553, Midland, Texas 79702, phone: 432-684-4404, fax: 432-682-7456. Additional information about University Lands including oil and gas well data and production data is available on the internet at http://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.
About the University of Texas System
The University of Texas 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 $12.8 billion (FY 2011) including $2.3 billion in sponsored programs funded by federal, state, local and private sources. Preliminary student enrollment exceeded 202,000 in the 2009 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 84,000 employees, the UT System is one of the largest employers in the state.