98°F
Sponsored by

U.T., Texas A&M benefit big from oil production

If oil prices remain strong, University Lands could make $1 billion in near future
Midland -- When the Texas Constitution called for the creation of the University of Texas in 1876, they also established the Permanent University Fund. University Lands manages the system's 2.1 million acres, 1.6 million of which is in the Permian Basin. When oil is drilled, money is made and all those royalty dollars go to benefit the University of Texas and Texas A&M systems.

Oil was first discovered on University Lands in 1923. Almost a century later, oil continues to flow sending billions of dollars into the Permanent University Fund.

"Deposited into the PUF, since inception, about $7.4 billion," said Jim Benson, University Lands executive director.

A big chunk of that money was made in the past two years during successful lease sales. Last year, they made $972 million and $950 million was made the year before.

This year, they don't have near as much land to lease. In fact 1.4 million acres of the 1.6 million in the Permian Basin is already spoken for.  Still, Benson predicts they'll easily eclipse the $800 million mark.  "The difference being, this year, is oil production is way up," said Benson. "We made over 3 million barrels a month last December, which was the first time we made three million barrels of oil a month on University Lands since march of 1972."
   
He predicts almost 36 million barrels of oil will be produced on University Lands this year alone. That's double what was made just five years ago. But he believes the best year is yet to come. "I think we'll see, at some point in time, a billion dollar year off of University Lands."

Benson predicts that billion dollars will be made in the next three to five years. Of course, that's all given the price of oil remains strong.

For more energy news, follow Mycah Glover on Facebook and Twitter.
Page: [[$index + 1]]
comments powered by Disqus