University Lands Generated $118 Million in Revenue from Largest Lease Sale Ever
Monday, September 25, 2017
The largest lease sale in University Lands’ history took place last week and resulted in $118 million in revenue, with over 43,000 acres of land leased for oil and gas development in West Texas’ Permian Basin. Held through an online auction platform, the sale resulted in an average leasing price of $2,700, with some lots going for more than $12,000, demonstrating once again the significant benefit oil and gas development delivers for Texas education.
Comprised of over two million acres endowed to the University of Texas (UT) and Texas A&M (TAMU) systems, University Lands help fund Texas education each year with revenue from oil and gas production. Royalties from wells on University Lands, along with money generated from lease sales, go back to the schools through the Permanent University Fund (PUF).
As a recent report on University Lands and the PUF notes, students benefit from the PUF in numerous ways, such as funding for “enhanced instruction and facilities to decreased upward pressure on tuition.”
According to a report earlier this year from the Perryman Group, commercial activity on University Lands generated an estimated average of $3.5 billion in gross product annually over the past five years, and supported roughly 33,600 jobs in Texas. All told, University Lands generated $856 million in revenue for the PUF in the 2015 fiscal year, with the Fund reaching $17.5 billion as of August 2015.
According to the Perryman report, commercial activity on the University Lands generated an average of nearly $176 million in state tax revenue and $78 million in local tax revenue each year. Moreover, funding from the PUF to the health sciences and medical facilities within the UT and TAMU systems helps to provide treatment for low-income Texans as much of the care is uncompensated.
As Mark Houser, chief executive officer of University Lands, said of the recent lease sale:
“It’s been awhile since we had such a large sale. We had a lot of potential interest, and we got good value from the prices.”
Houser added that the public can expect another lease sale next year.