In fiscal year 2025, University Lands (UL) continued to advance its mission of responsibly managing the Permanent University Fund (PUF) Lands to support higher education in Texas. Through disciplined mineral development, thoughtful surface stewardship, and sustained collaboration with developers operating on the Lands, UL delivered strong financial performance while reinforcing its long-term commitment to the lands entrusted to our care. Mineral development remains the foundation of the PUF Lands, and fiscal year 2025 reflected the continued strength of oil and gas activity across the portfolio. UL’s teams worked closely with counterparties to support efficient, well- paced development programs that prioritize technical rigor, operational excellence, and long-term value creation. These efforts were supported by active lease management, data- driven subsurface evaluation, and consistent enforcement of contractual and statutory requirements, ensuring that development proceeds responsibly and in alignment with the interests of the PUF. UL further expanded the tools available to promote strategic mineral development through the continued execution of Area Contracts for Development (ACfDs). Developed internally by UL and refined through extensive engagement with stakeholders, the ACfD framework has proven effective in bringing large, contiguous acreage blocks into development under clearly defined commitments. After multiple successful agreements, this model has demonstrated its ability to provide clarity, scale, and certainty for developers while advancing UL’s objectives for disciplined, long-term resource management. UL expects ACfDs to remain an important component of its minerals development strategy in the years ahead. UL’s commitment to stewardship is grounded in responsible mineral development and integrated management across the full portfolio of the PUF Lands. Across the surface portfolio, teams advanced grazing and agricultural management, environmental restoration, caliche pit reclamation, and habitat improvement initiatives designed to return disturbed lands to productive use. These efforts reflect UL’s belief that responsible development and environmental care are not competing objectives, but complementary responsibilities that must be pursued together. Water stewardship also remained a critical focus in fiscal year 2025. UL continued to emphasize produced water recycling and reuse as a means of preserving fresh groundwater resources underlying the PUF Lands. UL strengthened collaboration with the Texas Produced Water Consortium and other research partners to better understand the distribution and beneficial use of produced water, including its treatment, transport, and application in support of surface operations and land use - continuing to recognize that the successful management of the full water life cycle is essential to the PUF.
In parallel with traditional operations, UL continued to evaluate emerging opportunities at the intersection of energy, infrastructure, and land use. Growing demand for reliable power, driven in part by grid expansion and data- intensive technologies, has brought increased attention to West Texas as a strategic location for future development. During fiscal year 2025, UL devoted significant effort to market engagement, technical evaluation, and strategic discussions related to these opportunities, positioning the organization to support successful siting and development of these projects as markets continue to evolve. The UL Energy Forum remained a cornerstone of UL’s external engagement efforts, providing a platform for thoughtful dialogue on energy markets, infrastructure, and stewardship. By convening leaders from industry, academia, and public institutions, UL continues to foster informed discussion around the challenges and opportunities shaping the future of the Permian Basin. At the core of UL’s success is an understanding that these lands are not owned, but entrusted to our care by the State of Texas. The responsibility of stewardship is best fulfilled by treating the Lands as if they were our own - preserving, enhancing, and passing them forward in stronger condition for future generations. Spanning more than 2.1 million acres, the PUF Lands represent a lasting commitment to education, research, and healthcare across Texas. The work reflected in this report is the result of the dedication and professionalism of the University Lands team, and the developers, operators, lessees, and stakeholders who work across the PUF Lands every day. UL cannot fulfill its mission without their investment, expertise, and shared commitment to doing things the right way. Together, we remain focused on stewarding these lands with care, discipline, and integrity - ensuring they continue to generate value for Texas higher education today and for generations to come.
William R. “Billy” Murphy, Jr. Chief Executive Officer
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