University Lands FY23 Annual Report



Last fiscal year, University Lands observed its highest PUF revenue ever. In FY2023, that success continued with the second highest PUF revenue ever, along with the highest AUF revenue on record. These exceptional results reflect not only the value of the PUF Lands but also the dedication and expertise of the University Lands team managing those resources. Knowing that some factors contributing to these revenue numbers—such as fluctuations in commodity pricing, pipeline constraints and inflation—are beyond control, the University Lands team focuses on optimizing what they can control. That requires collaboration and communication with colleagues and operators. It requires curiosity and the desire to learn in order to stay abreast of new technologies and industries. And it requires a diversity of talent and expertise to manage the wide variety of activities on the Land—not just oil and gas but also commercial real estate, farming, ranching, hunting, coin mining, renewables, carbon storage research and water management, to name just a few. Perhaps most important to our success is the commitment every University Lands team member has to our mission. We take great pride in knowing that our efforts to maximize revenue and protect the health of the PUF Lands contribute to education, research and health care for the State of Texas and the institutions we support. That knowledge drives our thinking, strategy and commitment. Because University Lands is responsible for a single asset—the PUF Lands—we can focus solely on managing and stewarding this asset for the greater good of the institutions that benefit from it. With this dedicated purpose, there is no better land and mineral management team in the country. Our people care for this land like it’s their own. We are constantly evaluating what is the highest and best use of the Lands, recognizing that many of the projects we are considering now will still be on the ground long after we’re gone. Good long-term decisions involve lots of good short-term decisions, and we are fortunate to have a team filled with thoughtful, collaborative, knowledgeable, curious and mission-driven decision-makers.

William R. “Billy” Murphy, Jr. Chief Executive Officer

Last year, we celebrated the 100th anniversary of the Santa Rita


#1 well, marking the first time oil was produced on the PUF Lands. The anniversary was an appropriate time to reflect on the achievements of the past but also to consider what the next 100 years might bring. In the decades ahead, we expect there to be greater reliance on low-carbon energy sources. To prepare for that, we spent 2023 learning more about emerging and alternative energy sources. We developed strategies and created a plan and team dedicated to emerging energy. We are putting the structure and expertise in place to become a leader in the production of alternative and emerging energy in Texas, just as we are now leaders in the oil and gas business. As important as these internal efforts are, we know the success of our mission also depends on the knowledge and commitment of the lessors and operators working on the Lands. Their success is our success. The recent increase in industry mergers and acquisitions has resulted in new operators working on the Lands, joining a mix of companies that have different attributes and visions. One way we help all operators work more effectively together and with us is through our annual Energy Forum. In 2023, we again brought together hundreds of industry leaders and operators to learn from dynamic speakers about what is happening on the PUF Lands and across the industry. They had the opportunity to engage with one another and our team to discuss topics and share information that impact us all. We plan to continue growing the forum in the years to come, increasing both the number who participate and the value the event provides. Looking back and looking forward, it is clear our achievements depend on the people who work for and with University Lands. I am grateful for our team, the lessees and all who work on the Lands. Thanks to their stewardship, skills and dedication, FY 2023 was a remarkable year for the PUF Lands and the revenue generated. It is a unique privilege to work together for the benefit of The University of Texas and Texas A&M University Systems, their institutions, and the students, patients and researchers they support. That vital mission will continue to drive our success, in 2024 and beyond.

“Our people care for this land like it’s their own. We are constantly evaluating what is the highest and best use of the Lands, recognizing that many of the projects we are considering now will still be on the ground long after we’re gone.”

William R. “Billy” Murphy, Jr. Chief Executive Officer


100 YEARS A Historical Retrospective Santa Rita No. 1 Well

In 2023, University Lands marked the 100th anniversary of the well, now known as Santa Rita No. 1, striking oil, along with the first royalty payment of $516 to the PUF. Today, thousands of producing oil and gas wells dot the 2.1 million acres of PUF Lands, along with a wide range of revenue-generating surface activities that benefit UT and Texas A&M universities and institutions across the state, transforming the Permian Basin—and the educational systems supported by the PUF— for generations to come. This is a historical perspective of how the Santa Rita No.1 came to be the well that started it all and some of the significant events that transpired over the 100 years since its discovery.


Mirabeau B. Lamar While the PUF Lands today are unquestionably one of the state’s most important resources and a key revenue source for higher education, that wasn’t true at the beginning. As president of what was then the Republic of Texas, Mirabeau B. Lamar was the first to allocate West Texas land to support higher ed, encouraging the legislature to set aside 50 leagues (over 380,000 acres) of land back in 1839.



1 Million Acres Decades after Texas became a state, the legislature significantly increased that allotment, adding a provision to the Texas Constitution in 1876 that delegated one million acres for the benefit of what would later become The University of Texas and Texas A&M University Systems.


Rupert P. Ricker Among those early oil speculators was Rupert P. Ricker, a local lawyer who bought mineral leasing rights on 431,360 acres of the land. But Ricker was unable to raise the money needed to drill, so he sold the rights to his old army friend, Frank Pickrell, and Haymon Krupp, both of whom where El Paso businessmen. 1919

Another 1 Million Acres Another million acres was set aside in 1883. But while two million acres is a lot of land, few people at the time actually thought it was all that valuable. The best anyone could hope for was that the land could one day be sold and the proceeds used to create an endowment. 1883


J.A. Udden Then, in 1917, a University of Texas geology professor named J.A. Udden publicized his belief that there was oil under the lands. Speculators paid attention, resulting in more than 5,000 applications for permits to drill for oil and gas in the eastern Permian Basin granted over the next two years.


Carl Cromwell

Pickrell hired a crew to set up a portable drilling unit at the site to drill a water well designed to service the planned drilling operation. Just before the lease expiration deadline, Pickrell flagged down a car and persuaded the two men on their way to town to sign affidavits swearing that work had begun on the well prior to midnight, which meant that he had met the deadline and once again saved the lease.

In June of 1921, a rig building crew was hired to build the derrick. By the time the derrick was completed, Pickrell had hired an experienced cable tool driller named Carl Cromwell for $15.00 per day plus stock in the company. Cromwell moved his family to the site and by August, he had a drilling rig assembled and ready to go. The well was spud in August of 1921 located in Section 2, Block 2, on University of Texas land in Reagan County.


Frank Pickrell & Haymon Krupp 1919

Pickrell and Krupp had no better luck promoting the acreage than had Ricker, so they decided to develop the acreage themselves. They incorporated as Texon Oil & Land Company, and eventually ended up in New York City to raise the capital needed for drilling, selling shares in their newly created company. Their early investors included a group of Catholic women, who became nervous about their investment.

Their priest advised them to ask Saint Rita, patron saint of the impossible, for assistance. The next time Pickrell was in New York, the women gave him a sealed envelope containing a rose that had been blessed by the priest in the name of the saint. Following their instructions, Pickrell returned to the site and scattered the rose petals from the top of the derrick, christening the well “Santa Rita.”


Texon, Texas

Shortly after the Santa Rita No. 1 well discovery, Pittsburgh wildcatters M. L. Benedum and Joe Trees purchased some of Texon’s leases and formed the Big Lake Oil Company to develop the field. Texon, Texas was named for the Texon Oil and Land Company and was the first company town in the Permian Basin. From 1924 to 1926, the Big Lake Oil Company president, Levi Smith, planned and built Texon for

employees and their families. Texon had a post office, school, physician, dentist, hospital, theater, park, stores, and many facilities for recreation. As many as 2,000 people lived there, manning the drilling, a gasoline plant, an oil treating plant, and other operations. Plymouth Oil Company absorbed Big Lake Oil Company in 1956, then sold to what is now Marathon Oil Company in 1962, which opted to close the town that year.


Oil Discovery 1923

For 646 days the cable-tool rig pounded and Cromwell, along with his tool dresser, Dee Locklin, bailed the hole. They averaged only 4.7 feet a day. Late on May 27, 1923, the bit drilled into the dolomitic sands, called “Big Lime,” just above the 3,050-foot level. Cromwell shut down the well when he saw gas bubbles escaping from the casinghead, convinced they had an oil well, and left the site to lease surrounding mineral acreage while the discovery was yet unknown.

Early on May 28, with no further drilling, the Santa Rita roared to life, sprayed oil over the top of the derrick, and covered a 250-yard area around the site. The first royalty payment to the University of Texas, in the amount of $516.53, was paid on August 24, 1923.


Original Santa Rita Oil Rig Moves to UT Austin Campus

In 1940, the original equipment from the Santa Rita #1 well was salvaged when the Marathon Oil Company replaced it with an all-steel pulling derrick and associated equipment. That original equipment was preserved through the efforts of the Texas State Historical Association and in 1958 it was installed

on the UT Austin campus in recognition of its importance to education in the state. Its presence commemorates a time of transformation for both the University of Texas and Texas A&M University Systems, which shared in the Land’s royalties.

1929 1990 1958

Board for Lease of University Lands

Santa Rita Well Plugged The Santa Rita #1 well was taken out of service and plugged in 1990 after 67 years of service.

On March 29, 1929, the 41st Legislature passed “Chapter 282,” which created four management organzations for University Lands, including the Board for Lease (BFL) of University Lands, with authority over the leasing of oil and gas on Permanent University Fund (PUF) Lands.


The year between 2009 and 2010 can be viewed as a pivotal moment for the Permian Basin in West Texas. This was the period where development activity transitioned from “multi- stage” vertical wells into the economic boom that would become horizontal well development in reservoirs such as the Wolfcamp, Spraberry, and Bone Spring. At the same time, commodities transitioned from a natural gas to crude oil focus. Permian Basin Shale Boom

In 2014, the U.T. System Board of Regents (BOR) created the University Lands Advisory Board (ULAB) to provide strategic direction to the University Lands organization and play an advisory role to the BOR regarding its operations and management. University Lands Advisory Board

2009 2014 2015

Horizontal Drilling This horizontal well boom continued through 2014 and into 2015, where development began to push lateral lengths from 5,000 to over 15,000 feet and development strategies began to include stacked-lateral and “cube-style” programs that targeted maximum economic recoveries.


2020 After decades of weather damage to the original rig structure, University Lands commissioned a complete restoration of the Santa Rita well site, preserving its historical significance as the well that launched the Permian Basin. Santa Rita Well Site Restored

Fiscal Year PUF Revenue Reaches $2B University Lands recorded its highest historical PUF revenue in fiscal year 2022 with activities from mineral development reaching $2.12 billion. 2022

2023 Highest AUF Revenue Following the achievement of reaching over $2 billion in PUF revenue in fiscal year 2022, University Lands recorded is highest ever AUF revenue in fiscal year 2023 with $121 million generated from surface activities on PUF Lands.



1 CEO Message

3 A Historical Retrospective 13 PUF Lands At a Glance 15 FY23 Highlights 16 FY23 Net Performance 17 Governance 19 Leadership Team


20 Management Team 25 Financials 27 Oil & Gas Management 31 Water Supply & Logistics 32 Renewable Energy 33 Grazing & Agriculture 36 Environmental Stewardship 39 Understanding the PUF



University Lands

University Lands (UL) professionally manages the surface and mineral interests of 2.1 million acres of land across 19 counties in West Texas for the benefit of the Permanent University Fund (PUF).



The PUF is the largest public university endowment in the U.S. and benefits 14 educational and health institutions within The University of Texas System and 14 educational institutions and state agencies within The Texas A&M University System.

miles of pipelines & powerlines

~ 11 .4K producing oil & gas wells

2. 1M

acres of grazing lands

1 .24M

acres leased for mineral development

19.8K acres of surface leases

~ 27K oil & gas wells drilled

93.5K acres of solar and wind energy contracts


Principal Business Lines

Oil & Gas

Renewable Energy



Commercial Surface

Powerlines & Pipelines




Gross revenues totaled $1.98 billion with PUF revenue reaching $1.86 billion and AUF revenue at $121 million. AUF income increased by 26% over FY2022.


Annual expenses were $22.2 million and represented 1% of gross revenue or $0.82 per barrel of equivalent production unit cost.


Production rates averaged around 343,500 gross barrels of oil equivalent (BOE) per day. UL’s mineral royalty averaged 21.6% for both oil & gas, equaling a cumulative net royalty volume of 27.1 million BOE.


The FY23 total value of proved reserves was down 12% year-over-year primarily due to lower commodity prices, resulting in less active and near future development activities. On a price neutral basis, the value-per-acre of proved reserves is up 7% year-over-year.


UL performed 207 optical gas imaging (OGI) camera inspections (75 facility fugitive emission inspections and 132 flare inspections) and 1,375 oil & gas lease inspections. A total of 199 unproductive oil & gas wells were plugged with the surrounding areas remediated and returned to pastureland.

Emerging Energy

UL’s emerging energy portfolio consists of a total of 11 active agreements. Wind and solar are the primary sources of alternative energy on PUF Lands with several emerging energy projects under consideration.



$ 1.98B Gross Revenue

337 MMBOE Net Proved Reserves Net Total Resource 1.78 BBOE

$1.86B PUF Revenue (Minerals) $121M AUF Revenue (Surface)

Expenses $ 22.2M

27.1 MMBOE Net Royalty Production

1% of Gross Revenue $0.82 Expenses/BOE

262 Wells Put-on-Production Lateral Feet Put-on-Production 2.43MM

MMBOE - millions of barrels of oil equivalent; BBOE - billions of barrels of oil equivalent



Board for Lease of University Lands

UT System Board of Regents

2 UT Regents 1 Texas A&M Regent Texas Land Commissioner

The University of Texas System Board of Regents manages the strategic direction, development activities and stewardship of the Permanent University Fund (PUF) Lands.

The Board for Lease, chaired by the Commissioner of the Texas General Land Office, provides statutory oversight and governance for agreements to develop oil and gas minerals on PUF Lands.

UT System Administration

University Lands Advisory Board

5 UT Representatives 3 Texas A&M Representatives Texas Land Commissioner UT System Business Affairs Executive Vice Chancellor

The University of Texas System Administration is responsible for operations at all UT educational and health institutions. University Lands is a part of the UT System Administration Business Affairs division.

The University Lands Advisory Board (ULAB) is charged with providing guidance to the University Lands leadership team to help determine strategy and recommendations to the UT System Board of Regents to ensure responsible stewardship of PUF Lands.

Board for Lease Members

DAWN BUCKINGHAM Commissioner, Texas General Land Office

CHRISTINA MELTON CRAIN Regent, The University of Texas System


NOLAN PEREZ Regent, The University of Texas System

Regent, Texas A&M University System


University Lands Advisory Board Members

STUART STEDMAN ULAB CHAIR Regent, UT System; President, Stedman West Interests, Inc.

DAWN BUCKINGHAM Commissioner, Texas General Land Office

THOMAS L, CARTER, JR. President, CEO & Chairman, Black Stone Minerals

JAY C. GRAHAM Regent, Texas A&M System; CEO, Spur Energy Partners

JAMES C. “ RAD ” WEAVER Regent, UT System; CEO & Chairman, CW Interests

JANEEN JUDAH Independent Director, Patterson-UTI & Aethon Energy

DEE J. KELLY Law Partner at Kelly Hart & Hallman, LLP

JONATHAN PRUITT EX OFFICIO Executive Vice Chancellor for Business Affairs, UT System

E. JOSEPH WRIGHT Independent Partner, Geneses Capital Management, LLC

JOHN L. ZOGG, JR. President, Goldenrod Companies, Southwest Region



Executive Leadership Team

WILLIAM R. “ BILLY ” MURPHY, JR. Chief Executive Officer

RICHARD BRANTLEY Senior Vice President, Operations

KATE CHAMPION Senior Vice President & Chief Legal Officer

SONYA CSASZAR KIRGAN Vice President, Legal

BRIAN OWEN Senior Vice President, Land

MARYAM SCHELLSTEDE Chief Operating Officer

left to right; Brian Owen, Kate Champion, William R. “Billy” Murphy, Jr., Sonya Csaszar Kirgan, Maryam Schellstede, Richard Brantley



NICK ALEJANDRO Surface Operations Manager

SONYA BARGUIARENA Oil & Gas Accounting Manager

JAMES BUICE Sustainability Manager

JENNA GIBBINS V.P., Natural Resource Development

JEFF HANSON Financial Marketing Manager

AMBER JACKSON Budget & Revenue Director

ANTONIA JONES Marketing & Communications Manager


COREY MEANS IT Infrastructure & Operations Manager

MARIO ROJAS Chief of Data Analytics

JOHN TACKETT Chief Geologist

WIL VARK Business Solutions & Application Development Manager

JEFF WHITE Surface Operations Director

DAVE WILLIAMSON Commercial Surface Manager


The University of Texas at Arlington School of Social Work and College of Nursing & Health Innovation Smart Hospital Funded with $ 60M from the Permanent University Fund

The School of Social Work/CONHI Smart Hospital is a 150,000-square-foot state- of-the-art learning space enriched with the latest technology, including a Smart Hospital that’s home to dozens of medical robots capable of simulating various medical conditions. It also includes a virtual reality (VR) lab with VR headsets, a simulation theater, which can be reconfigured to resemble a courtroom, a hospital room or whatever learning need a class has, and a counseling center that gives social work students the chance to hone their craft with real clients. The center features a separate entrance for those who may be uneasy about reaching out and is also open to students, faculty and staff.

the puf


The Texas A&M Business Education Complex Funded with $ 54M from the Permanent University Fund

at work

The Texas A&M University Business Education Complex project includes an 82,500-gross-square-foot expansion for the Mays Business School. The new four-story building will feature an atrium that can accommodate up to 250 people for formal programs and speaking engagements, a café for casual dining for 50 people, eight learning studios with configurations that offer flexible spaces for students to solve real-world business challenges, and a collaboration plaza for outdoor meetings and teaming sessions. The project also addresses deferred maintenance on the Wehner Building (the existing home of the Mays Business School) and improvements to area utilities, pedestrian walkways, and landscaping. Classes in the facility will begin spring 2025.


Making Futures Bright: An Expanded Internship Program

The demand for skilled labor in the Permian Basin continues to grow, with analysts projecting the addition of more than 11,000 new jobs in the region over the next five years. To help build the interest and skills needed to meet the energy industry’s workforce demands, University Lands hosted eight students from multiple UT institutions, Texas A&M University and Texas State University over the summer of 2023 as part of its initial participation with the University of Texas System’s (UTS) internship program. Participating in UTS’s internship program offers students a rich and comprehensive experience. In addition to being paid for the 10-week program, interns benefit from valuable professional development and mentorship opportunities. Each intern is matched with a seasoned professional mentor who supports them throughout their

internship, fostering vital connections to expand their professional network.

With this group of interns, University Lands doubled the number of students previously hosted and expanded the fields of study beyond engineering and geology to also include marketing, business leadership, accounting, legal and web development. While the internships benefitted the students, providing real-world work experiences that included a site visit to the Permian Basin to tour operations on the lands and a stop by the Santa Rita #1 well site, the work they performed is being utilized in University Lands’ operations and strategies. Their projects included geoscience projections, accounting analysis, legal research, business development and website and social media enhancements.


Nearly 200 energy industry leaders and operators attended the 2023 Energy Forum in Midland on October 17. For seven years, University Lands has hosted an annual invitation-only program to share news, information and insights about operating on the PUF Lands. The 2023 program featured a dynamic presentation from Dr. Scott Tinker, the director of UT Austin’s Bureau of Economic Geology. William R. “Billy” Murphy, Jr., CEO of University Lands, and Stuart Stedman, who serves as chair of the University Lands Advisory Board and on the UT System 7th Annual Energy Forum

Board of Regents, welcomed guests. Panel discussions with UL’s executive leadership team and leaders from some of UL’s top operators were also a part of the lineup. Discussions included topics on development activities and prospects and synergy among the differnet types of energy development on the PUF Lands. The program ended with a conversation with Scott Sheffield, founder & CEO of Pioneer Natural Resources. Refreshment breaks and a networking reception sponsored by UT Permian Basin provided additional opportunities to meet and learn from one another.



FY 2023

FY 2022


$ millions, subject to rounding

Oil (MBBL)




Gas + NGLs (MMCF)




Million Barrels of Oil Equivalent (MBOE)




West Texas Intermediate (WTI)




Avg. Oil Price Received




Avg. Gas Price Received (including NGLs)




Oil Revenue




Gas Revenue




Bonuses, Unitization Payments








Water, Caliche, Damages








Easements, Renewables & Salt Water Disposal




Interest, Penalty, Assignment Fees












General & Administrative + Operating Costs




$/Barrel of Oil Equivalent Production









$ 1.86B

FY 23 Permanent University Fund Revenue

79.6 %

16.2 %

4.2 %


Lease Bonus


$ 121.3M

FY 23 Available University Fund Revenue


4.2 %

63.8 %

29.9 %

2.1 %

Damages, Water & Caliche

Surface Leases & Easements

Interest & Penalty



Much of the revenue generated from PUF Lands comes from oil and gas minerals. The University Lands’ Minerals and Surface Land teams and the Natural Resource Development team are strategically focused on maximizing development of these minerals across PUF Lands. University Lands’ land, geoscience, engineering, and data experts work together to accomplish this by:

“Our technical team is staffed with industry experts who have the experience and knowledge about what has been and continues to be successful across the acreage.”

▪ Identifying best practices in

varying well spacing and completions methods; ▪ Improving compliance and accuracy of data retrieval for the application of innovative data analytics; ▪ Identifying opportunities to repatriate acreage and helping operators work with one another to maximize horizontal development; ▪ Negotiating contracts to maximize the development value of the minerals; and ▪ Ensuring rights under existing contracts and state statutes are met.

development strategies, including completion designs, well spacing and stacking and landing depths; ▪ Working with operators to create and maintain continuous and well-paced development programs; ▪ Conducting technical studies and subsurface analyses to identify potential recoverable resources; ▪ Identifying opportunities for an operator’s growth and/or improved economics, including the testing of new formations and piloting of

Jenna Gibbins, Vice President of Natural Resource Development

Through these practices, the teams are dedicated to helping operators become more successful while maximizing revenue from the PUF Lands, not just today but for generations to come.


University Lands’ top oil & gas operators represent ~90% of

production volumes on PUF Lands. 2023 TOP PRODUCERS

Largest Producers ~40% of total volume produced

Substantial Producers ~50% of total volume produced


Key Oil & Gas Development Activity

The PUF Lands span the Delaware Basin, Northern Midland Basin, Southern Midland Basin, and the Central Basin Platform with more than 200 companies operating ~ 11,400 producing wells. New development in FY23 saw a total of 262 wells come online, of which 257 were horizontal wells with a cumulative 2.43 million lateral feet. Production from PUF Lands hit 337,000 barrels of oil equivalent per day, and UL’s cumulative net royalty production for the fiscal year was 26.5 million barrels of oil equivalent. To ensure continued development and value creation, University Lands negotiated two development agreements on approximately 15,000 acres, adding approximately 160,000 lateral feet obligation a year of drilling commitment. “Our negotiated continuous development agreements ensure robust and consistent mineral development, maximizing value for the PUF Lands. These agreements also offer operators a sustainable development pace, facilitating annual growth for both University Lands and the operators.” Brian Owen, Senior Vice President, Land





Development Activity










Pioneer Elevation



UL Activity by Basin

Activity Summary

ƒ Six oil and gas development agreements were executed, adding approximately 1MM lateral feet obligation (LFO) over the next five years


Wells Spud


ƒ 262 horizontal wells began production

Producing Wells


ƒ 2.43 million lateral feet put on production

Producing Lateral Ft


Avg Lateral Length


UL Development Activity Percentages are based on metrics weighted for wells spud and wells put on line


Wells Spud


~41% in Delaware Basin

Producing Wells


~31% Northern Midland Basin

Producing Lateral Ft


~21% in Southern Midland Basin

Avg Lateral Length


~7% Central Basin Platform


Oil & Gas Lease Sale #132

Wells Spud


ƒ ~17,500 acres leased

Producing Wells


ƒ $18.7MM in lease bonus

Producing Lateral Ft


ƒ ~$1,064 per acre average bonus

Avg Lateral Length


ƒ Leases sold as “blocks” to promote

horizontal development


Wells Spud


Producing Wells


Producing Lateral Ft


Avg Lateral Length




While oil and gas are the assets most commonly associated with the PUF Lands, water actually may be its most valuable resource. Water is essential for the drilling and development of oil and gas wells, as well as for grazing, agricultural and other surface uses. With multiple aquifers running under the PUF Lands, it is imperative that the groundwater be protected and conserved for the good of the Permian Basin as well as the Lands. The University Lands team takes seriously its responsibility to preserve and protect the groundwater, now and for the future. UL’s Groundwater Management Plan helps guide those efforts, balancing the demands of the commercial ventures on the Lands and its related revenue with the need to manage aquifers appropriately and conserve water supplies. One of the strategies included in the plan is to encourage producers to recycle produced water so that it can be used again in drilling and completion, which reduces the need for groundwater. The completion of one horizontal well requires approximately 570,000 barrels of water for the process of hydraulically stimulating the formation (aka “frack the well”), which converts the drill hole into a producing well. Using recycling produced water for this process reduces the reliance on fresh groundwater by approximately 50 percent. However, the recycling of produced water requires a more thoughtful water management approach and is a bit more expensive due to the need for additional infrastructure, such as the installation of recycling facilities, produced water pits and transfer pipes. And while produced water can be recycled for use on an oil well, technology is still evolving that would enable the water to be cleaned sufficiently for irrigation and other uses. Staff members are involved in a variety of organizations dedicated to researching how to improve water management. For example, Richard Brantley, senior vice president of operations, chairs the Permian Basin Produced Water in Energy Conference, which brings subject matter experts together annually to share best practices and lessons learned as the industry collectively strives to improve water management in the oil and gas sector. Accurate accounting of water volumes is another priority. The Groundwater Management Plan requires mineral developers to meter and report water volumes pumped and piped to track the sources and the disposition of the water being utilized. UL sponsors research for aquifer evaluations and has developed best practices for groundwater well spacing and installation, all while keeping a watchful eye on subsurface aquifer levels and drought conditions across the 19 West Texas counties where UL holdings are located. A web-based groundwater database allows users to access and upload water well and groundwater use information, assisting UL staff in their water planning and conservation efforts.

“There is no other asset like this anywhere else in the world, especially one dedicated to supporting higher education and health care, and our teams are committed to being good stewards of these resources.”

Richard Brantley, Senior Vice President of Operations



The Permian Basin of West Texas has long been established as an important energy producing region. With large swaths of open land, the ever-evolving energy landscape continues to bring new opportunities to this area. The economics of developing emerging energy and low-carbon resources have become increasingly viable, with federal initiatives and tax credits spurring additional interest in PUF Lands. While wind and solar currently are the most common alternative energy resources operating on PUF Lands, there are numerous emerging energy projects under consideration. Although emerging energy sources offer UL new potential revenue opportunities, the market, infrastructure, technology, and policies still need further development. University Lands is committed to carefully and diligently evaluating development opportunities to effectively implement sustainable projects. A research partnership with UT Austin’s Bureau of Economic Geology was launched in September 2022 to gain a greater understanding of emerging energy opportunities and challenges on PUF Lands, including hydrogen generation and subsurface storage, critical minerals and elements, carbon sequestration, and geothermal energy. The research is expected to be completed in the spring of 2024.

“Many of the emerging energy opportunities are complementary to each other and to existing land use, such as the production of oil and gas, but strategic project placement is necessary in order to create the best and highest land utilization to drive revenue for generations to come.”

A new emerging energy position was created at the end of FY23 to bring additional expertise to the development of the emerging energy strategy on PUF Lands in FY24.

Kate Champion, Senior Vice President & Chief Legal Officer



5 Leases 7.4K Acres ~900MW Capacity


6 Leases 86.2K Acres ~775 MW Capacity


14 Projects Under Contract

Solar Facility

Wind Farm


Battery Energy Storage System (BESS)


Even before oil was discovered on the PUF Lands, ranchers, hunters and farmers used the lands. Ensuring the Lands continue to support these activities for future generations requires careful range and wildlife management. That includes monitoring livestock stocking rates and proactively managing grazing to maintain good range conditions and water availability. Efforts also include managing the wildlife population. UL performs annual aerial surveys to determine the density and general condition of the wildlife species and to develop harvest recommendations. To protect the grasslands for current and future use, University Lands approves and inspects the installation and maintenance infrastructure, such as fencing and water distribution, across the range sites. Rangeland and grazing assessments conducted by the Natural Resource Conservation Service (NRCS) of the U.S. Department of Agriculture support informed decision-making for the strategic placement of grazing infrastructure, which, in turn, facilitates the implementation of rotational grazing practices and conservation efforts. An example of commitment to rangeland conservation is demonstrated by UL’s participation in a three-year study with BCarbon. This research is focused on evaluating the natural absorption of carbon dioxide by rangeland vegetation and the subsequent accumulations of carbon in the soil, which increase the soil’s water and mineral storage ability. Another measure of stewardship is demonstrated by the UL’s daily work with operators to clean up abandoned well pads, unused roads, pipelines, power lines, tank batteries and the caliche pads. Once all equipment is removed, the locations are tilled and re- seeded with a custom grass mixture suitable for the specific county location. With a little rain and time, these efforts enable the surface to be restored to native conditions and improve the grazing and wildlife habitat.

“Focusing on wildlife management and grazing is a big part of our land stewardship responsibilities. This offers the potential to increase revenue but what’s more impactful are the sustainability benefits we will see 10 years down the road.”

Jeff White, Director of Surface Operations


$ 4.1M

Invested Back Into PUF Lands

(by University Lands, grazing lessees, United States Department of Agriculture - Natural Resources Conservation Service and Texas Parks and Wildlife)


Acres of Brush Control Employed


Miles of Fencing Installed


Ranch Water Improvements


Miles of Water Pipeline Installed


Ranch Water Wells Plugged


By the Numbers

75 132

OGI emission compliance inspections

OGI flare inspections



Oil & gas lease acres returned to inventory

Oil & gas lease inspections



Oil & gas production wells plugged

Commercial lease & easement inspections

4 36


Oil & gas wells metered daily

Grazing lease inspections


Low or no production leases terminated

Oil & gas water wells plugged



While there is a dedicated team managing environmental issues in the field, “environmental stewardship” is a term every University Lands staff member takes seriously. Each member of the surface operations team is assigned a portion of land to manage, putting in many miles and hours of “windshield time” but also taking advantage of technology that includes digital cameras, Google Earth and GIS mapping systems. Geographically, the Lands run 385 miles east to west and 185 miles north to south—about the size of Alabama—but team members take pride in knowing their acreage like it’s their own backyard. Almost every lease agreement is non-exclusive, meaning each parcel of land typically supports a variety of operations—public utility lines, grazing, hunting, oil and gas wells, pipelines, transmission lines and renewable energy infrastructure typically exist on the same footprint. Those operations result in between 10,000 and 20,000 people working or traveling across the PUF Lands every day. Team members coordinate with one another and the operators to determine the best location, including access roads for all infrastructure installed on or under the Lands. Every proposed project is evaluated to determine whether it makes best use of the land, not just now but for the life of the project. Solar farms, for example, remain in place for 20 to 30 years, reducing the acreage available for grazing, hunting, farming or other uses during that time. Proactive field inspections are conducted daily as part of UL’s environmental stewardship efforts. UL staff also are onsite when wells are installed to confirm compliance with the submitted plans, and all plans and proposals are carefully reviewed to ensure the land is being used in the best way. While not a government regulator, all University Lands lease agreements contain the requirement for each lessee to comply with state and federal environmental regulations. The team continually inspects surface operations, both from the ground and aerially, to ensure that operators abide by the terms of the lease. The UL team encourages all lessees to follow the rules and continually provides education and guidance to assist them as needed, thereby reducing the impact of spills and the frequency of gas emissions. If a spill or leak does occur, the UL team works with the responsible party to resolve the situation and remediate the site in compliance with environmental regulations. The team provides operators with the training and support to be successful, but also to ensure that every installation and activity minimizes the impact to the land. One priority is ensuring that infrastructure that is no longer in use is properly decommissioned.

“We all take pride and responsibility, and have an attachment and love for the land. We ask operators to respect these lands like they were their own, just as we do.”

Jeff White, Director of Surface Operations


UL monitors daily well production and when wells reach the end of life, UL lease compliance analysts engage the operator to develop a lease restoration plan, which includes plugging all non-producing wells, removing all tank batteries, pipelines and power lines and picking up caliche from pads and roads that is either returned to the caliche pit or used for road repair. When all equipment is removed, the disturbed lands are re-seeded with a custom blend of a native grassland seed mixture to return the property to healthy pastureland.

“We care greatly for this land. If problems occur, we address the situation quickly. There’s no area of this land I would hesitate to take someone.”

UL staff work closely with larger operators to evaluate and plug dozens of water wells that are no longer in use to remove the potential for groundwater contamination.

The UL team consistently engages in ongoing education to explore emerging methods and technologies designed to enhance emission management. Additionally, they remain vigilant in staying informed about the latest regulations to guarantee compliance and safeguard the environment. For example, UL’s environmental coordinator has been working with operators to reduce emissions in preparation for new federal regulations that are expected soon, which will require continuous air monitoring. In addition to the many procedures and systems in place to prevent and mitigate potential environmental concerns, University Lands also publishes best practices and helpful information online that operators can access anytime to help fulfill their environmental stewardship responsibilities.

Richard Brantley, Senior Vice President of Operations


What We Are Doing

Contractual requirements and state and federal law Oil & gas operators on PUF Lands are required by contract to comply with all state and federal laws and regulations. UL also requires reasonably prudent operating practices to minimize releases to the environment . Fugitive emission and flare inspections UL performs routine leak detection facility and flare inspections using an optical gas imaging camera and ensures appropriate corrective actions are performed when emissions are observed.

Non-productive/marginal well initiative UL’s routine inspections of oil & gas operations ensures marginal wells are properly plugged and any associated emissions are eliminated.

Royalty payments required on all gas Royalty is due and payable on flared gas, incentivizing operators to minimize the practice.

Collaboration with experts and industry UL engages in regular dialogue, collaboration and sharing of best practices with scientists and engineers and industry associations and shares these learnings with operators. Commitment to best practices and technology UL encourages operators’ adoption of reliable control technologies and proactive inspection and repair. Commitment to research UL seeks opportunities to support and/or participate in government, industry, and academic collaborative research projects.






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