ANNUAL REPORT
PUF Lands At-A-Glance
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
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.
2.1MM surface acres
24.5K miles of pipelines & powerlines
6K active oil & gas contracts
10.3K producing oil & gas wells
3.3MM contract equivalent acres for oil & gas (due to multiple contracts per surface acre)
MIDLAND
HOUSTON
23.9K oil & gas wells drilled
12.5K active commercial surface contracts
74.5 K acres of emerging energy leases
K - Thousand MM - Million *Approximate values are used; figures have been rounded for ease of reading.
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Principle Business Lines
OIL & GAS
SURFACE LEASES & EASEMENTS
EMERGING ENERGY
GRAZING & AGRICULTURE
WATER
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Table Of Contents
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UL At-A-Glance
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Internship Program
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CEO Message
Financials
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FY25 Highlights
Oil & Gas Management
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37
FY25 Net Performance
Water Supply & Logistics
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Governance
Emerging Energy
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UL Leadership Team
Grazing & Agriculture
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The PUF at Work
Environmental Stewardship
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2025 Energy Forum
Surface Management & Initiatives
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A Message from Our CEO
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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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FISCAL YEAR 2025 HIGHLIGHTS
Revenue
Gross revenues totaled $1.86 billion with PUF revenue coming in at $1.72 billion and AUF revenue at $143 million. AUF income increased by 12.6% over FY2024. The FY25 total value of proved reserves increased 13% year- over-year primarily due to more PDP wells and PUD wells as results of strong activities in unconventional basins.
Reserves
Expenses
Annual expenses were $30 million and represented 1.63% of gross revenue or $0.86 per barrel of equivalent production unit cost.
Production
UL performed 1,694 oil & gas lease inspections and a total of 186 unproductive oil & gas wells were plugged with the surrounding areas remediated and returned to pastureland. Production rates averaged around 450,250 gross barrels of oil equivalent (BOE) per day. UL’s mineral royalty averaged 21.25% for oil, gas & NGLs equaling a cumulative net royalty volume of 35 million BOE. Wind and solar are the primary sources of alternative energy on PUF Lands, along with several battery energy storage systems and cryptocurrency mining facilities. The emerging energy team continues to assess strategic large-scale surface uses including data centers, renewables, and gas power generation.
Environment
Emerging Energy
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NET PERFORMANCE
$ 1.86 BILLION GROSS REVENUE
$1.72 B PERMANENT UNIVERSITY FUND REVENUE (MINERALS)
$143 MM AVAILABLE UNIVERSITY FUND REVENUE (SURFACE) 3.3 MMft LATERAL FEET PUT-ON-PRODUCTION 307 WELLS PUT-ON-PRODUCTION 35 MMBOE NET ROYALTY PRODUCTION
1.728 BBOE NET TOTAL RESOURCE 425 MMBOE NET PROVED RESERVES $30 MM EXPENSES 1.63% OF GROSS REVENUE $0.86 EXPENSES/BOE
MMBOE - Million Barrels of Oil Equivalent BBOE - Billion Barrels of Oil Equivalent MMft - Million feet
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BOARD FOR LEASE MEMBERS
The University of Texas System Board of Regents manages the strategic direction, development activities and stewardship of the Permanent University Fund (PUF) Lands. UT SYSTEM BOARD OF REGENTS
Dawn Buckingham Chairwoman, Board for Lease Commissioner, Texas General Land Office
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. UT SYSTEM ADMINISTRATION
David Baggett Regent, Texas A&M University System
BOARD FOR LEASE OF UNIVERSITY LANDS
2 UT Regents 1 Texas A&M Regent Commissioner, Texas General Land Office
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.
Christina Melton Crain Regent, The University of Texas System
UNIVERSITY LANDS ADVISORY BOARD
5 UT Representatives 3 Texas A&M Representatives Commissioner, Texas General Land Office
UT System Business Affairs Executive Vice Chancellor The University Lands Advisory Board (ULAB) provides advice and strategic direction regarding the operation and management of University Lands. Through its guidance, ULAB supports UL leadership in advancing responsible stewardship of the PUF Lands in alignment with the policies and oversight of the UT System Board of Regents.
Nolan Perez Regent, The University of Texas System
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UNIVERSITY LANDS ADVISORY BOARD MEMBERS
Stuart Stedman ULAB CHAIR President, Stedman West Interests, Inc. Regent, The University of Texas System
James C. “Rad” Weaver CEO & Chairman, CW Interests Regent, The University of Texas System
Gloria Moncrief President & Manager, Montex Drilling Company
Dee J. Kelly Law Partner, Kelly Hart & Hallman
John L. Zogg, Jr. President, Goldenrod Companies Southwest Region
Jay C. Graham CEO, Spur Energy Partners
Tony Weber Managing Partner, Dais Partners
John Bellinger CEO, Agri-West International and Bellinger Development Regent, Texas A&M System
Regent, Texas A&M University System
Dawn Buckingham Commissioner, Texas General Land Office
Jonathan Pruitt Ex OFFICIO
Executive Vice Chancellor & Chief Operating Officer, The University of Texas System
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Executive Leadership Team
William R. “Billy” Murphy, Jr. Chief Executive Officer
Brian Owen Senior Vice President, Land
Kate Champion Senior Vice President & Chief Legal Officer
Maryam Schellstede Chief Operating Officer
Vice Presidents
JENNA GIBBINS Vice President, Natural Resource Development MARIO ROJAS Vice President, Business Intelligence & IT Services Vice President, Emerging Energy KEVIN CLEGG JEFF WHITE Vice President, Surface Operations PHILLIP YANCER Vice President, Land
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The PUF At Work
Funded in part by $183.3 million from the Permanent University Fund, the Medical Education Building (MEB) at The University of Texas Health Science Center at Tyler represents a transformative investment in medical education and healthcare delivery for East Texas. Currently under construction, the $311.3 million project is designed to support the expansion of undergraduate and graduate medical education programs across the UT Health East Texas system. The 247,568-square-foot facility will provide interdisciplinary learning environments, including learning studios, anatomy labs, skills training and simulation centers, conference rooms, and student study spaces. The building will also house clinical services such as women’s imaging and health, orthopedics and sports medicine, pulmonary care, and a surgery center - supporting hands- on training for medical residents while expanding access to patient care. In addition to the academic and clinical spaces, the project includes a 953-space structured parking facility, a central utility plant, and a sky bridge connecting the Medical Education Building to the UT Health East Texas Hospital, strengthening campus connectivity and operational efficiency. With construction nearing completion and substantial completion anticipated in December 2025, the Medical Education Building reflects UT Health Tyler’s commitment to advancing medical education, strengthening the regional healthcare workforce, and delivering long-term benefits to the communities it serves through strategic investment of Permanent University Fund resources. FUNDED WITH $183.3 MILLION FROM THE PERMANENT UNIVERSITY FUND The University of Texas at Tyler Medical Education Building
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On October 3, 2025, Texas A&M University hosted a groundbreaking ceremony for the Aplin Center, a first-of-its-kind immersive learning hub transforming hospitality, retail, and marketing education, preparing students for the industries shaping our future. The $250 million Aplin Center is supported in part by $100 million in Permanent University Funds and a $60 million gift from former student Arch “Beaver” Aplin III ’80, founder and CEO of Buc-ee’s and namesake for the future center. As the future home of the Texas A&M Visitor Center, the Aplin Center will redefine the campus welcome experience with a 170-seat theater, 70-seat multipurpose rooms, and student ambassador spaces. It will serve as both the first stop for prospective Aggies and the last stop for graduates, bookending the Aggie journey in a vibrant, cutting-edge space. Set to open for classes in the Fall of 2028, the 211,724-square-foot, three-story mass timber facility will be a comprehensive experiential academic facility. The facility features immersive learning laboratories, food-tasting centers, student-run retail and dining spaces, and corporate training opportunities that position Texas A&M as a leader in hospitality, retail, and food innovation - and serve as a primary gateway to campus for all visitors. The center will redefine how Aggies learn. Students will gain hands-on, real-world experience by managing retail and dining operations, practicing product development and service management, and engaging in industry-partnered research and training. Lab spaces and classrooms are intentionally designed for visitors to watch students and professors learning and teaching, whether it is the intricate process of roasting coffee beans or the skillful technique of making ice cream. This live, hands-on environment will help ensure graduates are workforce-ready and industry-connected as they leave Texas A&M. Texas A&M University Aplin Center FUNDED WITH $100 MILLION FROM THE PERMANENT UNIVERSITY FUND
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9th Annual UL Energy Forum
The 2025 University Lands Energy Forum brought together leaders from across the energy industry, academia, and the public sector for a full day of discussion and collaboration in Odessa, Texas. This year’s event was the most attended Energy Forum to date, reflecting the continued importance of thoughtful dialogue around innovation, stewardship, and the evolving energy landscape in Texas. A highlight of the Forum was a Keynote Panel featuring John Zerwas, Chancellor of The University of Texas System, and Glenn Hegar, Chancellor of the Texas A&M University System. Moderated by Secretary Don Evans, the discussion explored the enduring impact of the Permanent University Fund (PUF) Lands and the shared commitment of Texas’ leading university systems to advancing research, education, and energy leadership. The Forum featured a Data Centers in West Texas panel with participation from Bracewell LLP, ENGIE, Diamondback Energy, and the Bureau of Economic Geology, as well as a Permian Operators
Panel including Continental Resources, Permian Resources, and Black Swan Oil & Gas. Additional updates were provided by Jack Balagia of the KBH Energy Center and Sandra Woodley, President of The University of Texas Permian Basin, as well as remarks delivered by Dawn Buckingham, Texas Land Commissioner. The day concluded with a networking reception, providing an opportunity for continued dialogue and connection among participants. Through the Energy Forum, University Lands remains committed to fostering collaboration and informed discussion that supports responsible development and long-term stewardship of the PUF Lands for the benefit of Texas’ education, research, and healthcare institutions.
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2025 Annual Report
UL Internship Program
Fiscal year 2025 marked the continued growth of University Lands (UL)’s expanded internship program, designed to engage students across a diverse range of business and technical areas that support the management of the Permanent University Fund (PUF) Lands. During the summer, seven interns joined UL, gaining hands-on expe- rience in areas including emerging energy, oil & gas accounting, information tech- nology, and business analytics. Interns represented multiple universities across the University of Texas System, reflecting the academic diversity of the program. UL’s internship program continued its participation in the University of Texas System Internship Program, providing interns with a comprehensive experience that included mentorship from UL and UT System professionals, professional development oppor- tunities, networking with UT System leadership, and collaboration with peers from across the System. The program culminated in a systemwide intern summit focused on shared learning and connection. A highlight of the program was a two-day field visit to the Permian Basin, where interns traveled to Midland for an immersive learning experience. The visit included a tour of a data center operation, wind and solar site visits, a visit to the Permian Basin Petroleum Museum, time at UL’s Midland office, and opportunities to engage with UL staff working in the region. The internship experience concluded with formal presentations delivered by each intern, showcasing the projects they supported and the contributions they made throughout the summer. Through this program, UL continues to prioritize the devel- opment of future professionals while strengthening the connection between the PUF Lands and the institutions they support.
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University Lands
FINANCIALS FINANCIALS
FY 2024
FY 2025
VARIANCE
$ millions, subject to rounding
Oil (MBBL)
19,962
20,120
1%
Gas (MMCF)
41,757
46,086
10%
NGLs (BBL)
6,832
7,468
9%
Thousand Barrels of Oil Equivalent (MBOE)
33,754
35,269
4%
West Texas Intermediate (WTI)
$80
$70.13
-12%
Avg. Oil Price Received ($/BBL)
$80.45
$70.68
-12%
Avg. Gas Price Received ($/MCF)
$1.49
$1.32
-11%
Avg. NGL Price Received ($/BBL)
$21.84
$22.68
4%
Oil Revenue
$1,582
$1,413
-11%
Gas Revenue
$63
$65
3%
NGL Revenue
$150
$173
15%
Bonuses, Unitization Payments
$55
$68
25%
TOTAL
$1,850
$1,719
-7%
Water, Caliche, Damages
$40
$41
1%
Grazing
$5
$5
-2%
Easements, Renewables & Salt Water Disposal
$79
$94
19%
Interest, Penalty, Assignment Fees
$2
$3
34%
TOTAL
$127
$143
13%
TOTAL REVENUE
$1,977
$1,861
-5.8%
General & Administrative + Operating Costs
28
30
8%
$/Barrel of Oil Equivalent Production
0.84
0.86
3%
NET REVENUE
$1,948
$1,831
-6%
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GAS - 3.8%
LEASE BONUS - 4%
NGL - 10%
$1.72 B FY25 PERMANENT UNIVERSITY FUND REVENUE
OIL - 82.2%
INTEREST & PENALTY - 1.9%
DAMAGES, WATER & CALICHE - 28.6%
$143 M FY25 AVAI LABLE UNIVERSITY FUND REVENUE
GRAZING - 3.3%
SURFACE LEASES & EASEMENTS - 66.2%
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Oil & Gas Management
Oil and gas minerals remain the foundation of revenue generation from the Permanent University Fund (PUF) Lands. Throughout fiscal year 2025, University Lands (UL) maintained a disciplined focus on the long-term development of these resources, balancing operational efficiency with responsible stewardship. UL applies a collaborative, technically driven approach to minerals management, integrating expertise across land, legal, geoscience, engineering, and data analytics functions. This model supports development strategies that maximize recoverable value while protecting the long-term interests of the PUF Lands.
INTEGRATED TECHNICAL & SUBSURFACE EVALUATION UL conducts rigorous technical studies and subsurface analyses to identify additional recoverable resources, refine development strategies, and inform future exploration activity. These evaluations support data- driven decision-making and long-term resource optimization across the Lands. DEVELOPMENT DESIGN & OPERATIONAL OPTIMIZATION UL works closely with operators to promote advanced development techniques, including optimization of completion designs, well spacing, stacking, and landing depths. These practices support improved efficiency, enhanced recovery, and disciplined capital deployment. COORDINATED DEVELOPMENT PLANNING UL collaborates with developers to design and maintain consistent, well-paced development programs that align technical planning with long-term value creation. This coordinated approach supports efficient execution across large acreage positions while reducing fragmentation and surface impacts. ECONOMIC PERFORMANCE & RESOURCE ADVANCEMENT UL assists operators in testing new formations, piloting alternative well spacing designs, and advancing completion methodologies that enhance economic outcomes. These efforts support continued technical progress while remaining aligned with UL’s stewardship objectives.
DATA, ANALYTICS & COMPLIANCE OVERSIGHT Enhanced data retrieval and analytics capabilities strengthen compliance oversight and improve transparency across operations. These tools support informed evaluation of development activity while reinforcing contractual and regulatory accountability. HORIZONTAL DEVELOPMENT ALIGNMENT UL identifies opportunities to repatriate acreage and encourages coordination among operators to align and optimize horizontal development initiatives. This approach supports efficient resource recovery and improved development outcomes across shared reservoirs. STRATEGIC AGREEMENTS & CONTRACT STRUCTURE UL negotiates and administers agreements designed to promote efficient development while safeguarding the long-term value of the PUF mineral estate. Contract structures are tailored to align development incentives with stewardship priorities. PROACTIVE DEVELOPMENT FRAMEWORKS UL continues to deploy proactive development tools, including the Area Contract for Development framework, to encourage strategic, large-scale acreage development. These tools support coordinated planning and long-term visibility into development activity. CONTRACTUAL & STATUTORY ENFORCEMENT UL requires compliance with contract terms and applicable laws and conducts regular inspections to identify discrepancies. UL requires remediation when necessary and enforces its contractual rights to protect development integrity and uphold stewardship of the PUF Lands.
Through these coordinated efforts, UL supports responsible oil and gas development while ensuring that revenues generated from the PUF Lands continue to benefit the University of Texas and Texas A&M Systems. UL remains committed to disciplined mineral management that reflects both the scale of the resource and the responsibility entrusted to its care.
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Mineral development, guided by discipline and stewardship, underpins the long-term value of the PUF Lands.
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GAINES
DAWSON
Apache Black Swan Civitas ConocoPhillips Continental Double Eagle Diamondback Exxon Oxy Riverbend Rockport Sabalo Sequitur Triple Crown Crescent
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REEVES
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Delaware Basin & Central Basin Platform
Southern Midland Basin, Pecos Basin & Val Verde Basin
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Key Oil & Gas Development Activity Miles
The PUF Lands span the Delaware Basin, Northern Midland Basin, Southern Midland Basin, and the Central Basin Platform with more than 200 companies operating ≈10,300 producing wells. New development in FY25 saw a total of 307 wells come online, of which 304 were horizontal wells with a cumulative ≈3.3 million lateral feet. Production from PUF Lands hit 450,250 barrels of oil equivalent per day, and UL’s cumulative net royalty production for the fiscal year was 34.9 million barrels of oil equivalent. To ensure continued development and value creation, UL negotiated 66 development agreements on approximately 72k acres, adding approximately 3MM lateral feet obligation of drilling commitment over the next nine years.
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UL FY25 Activity by Basin
Activity Summary • 66 oil and gas development agreements were executed, adding 3MM lateral feet obligation (LFO) over the next nine years.
• 304 horizontal wells began production and ≈3.3 million lateral feet put-on-production
UL Dev elopment Percentages are based on metrics weighted for wells spud and wells put on-line. ≈39% in Delaware Basin
NORTHERN MIDLAND BASIN
Wells Spud Wells Put-On-Production Producing Lateral Ft Average Lateral Length
45 40 ≈432,713 ≈10,818
≈15% Northern Midland Basin ≈38% in Southern Midland Basin ≈8% Central Basin Platform
SOUTHERN MIDLAND BASIN
Wells Spud Wells Put-On-Production Producing Lateral Ft Average Lateral Length
116 128 ≈1,440,452 ≈11,253
DELAWARE BASIN
Wells Spud Wells Put-On-Production Producing Lateral Ft Average Lateral Length
120 126 ≈1,341,730 ≈10,784
CENTRAL BASIN PLATFORM
Wells Spud Wells Put-On-Production Producing Lateral Ft Average Lateral Length
25 13 ≈84,328 ≈7,026
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2025 Top Producers
University Lands’ top oil & gas operators represent ~90% of production volumes on PUF Lands.
LARGEST PRODUCERS ~50% of total volume produced
SUBSTANTIAL PRODUCERS ~40% of total volume produced
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Area Contract for Development (ACfD)
The ACfD framework was developed internally by UL and refined through extensive planning and engagement with stakeholders. Establishing the model required careful consideration of governance, contractual guardrails, and long-term resource management objectives. Following multiple successful agreements, the ACfD approach has demonstrated its ability to bring significant acreage into development under well-defined terms. For developers, ACfDs offer the ability to secure large blocks of acreage under a single agreement with upfront clarity around commitments and timelines. For UL, the framework supports proactive development, improved coordination, and enhanced visibility into long-term activ- ity. UL expects ACfDs to remain an important component of its mineral development strategy moving forward.
The Area Contract for Development (ACfD) rep- resents a strategic evolution in how University Lands (UL) promotes disciplined, large-scale mineral devel- opment across the Permanent University Fund (PUF) Lands. In fiscal year 2025, UL continued to advance this framework as a proactive tool designed to align acreage, development commitments, and long-term stewardship objectives. An ACfD is structured around a large, contiguous acreage position and includes a clearly defined drilling commitment established at the outset of the agreement. This structure enables coordinated development across an area rather than incremental, lease-by-lease activity, providing clarity and certainty for both UL and developers.
SUMMARY OF COMPLETED ACFD AGREEMENTS (since 2024) Summary of Completed ACfD Agreements since 20 Riverbend REAGAN COUNTY Closed March 2024 • ~8500 acres Summary of Completed ACfD Agreements since 2024 Black Swan, Reagan County Closed Dec 2024 Black Swan, Reagan County Closed Dec 2024 Riverbend, Reagan County Closed March 2024 Riverbend, Reagan County Closed March 2024 SM Energy, Crane County, Closed June 2025 Black Swan REAGAN COUNTY Closed Dec 2024 • ~11,500 acres Ϯ mary of Completed ACfD Agreements since 2024 Black Swan, Reagan County Closed Dec 2024 nd, Reagan County March 2024 SM Energy, Crane County, Closed June 2025 SM Energy CRANE COUNTY Closed June 2025 • ~3,200 acres
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Water Supply & Logistics Water is a finite and essential resource across the Permanent University Fund (PUF) Lands, supporting oil and gas development, emerging energy initiatives, grazing and agriculture, wildlife habitat, irrigated cropland, and other surface activities. University Lands (UL) approaches water management with a long-term stewardship mindset, focusing on conservation, accountability, and responsible use throughout the full water life cycle. UL continued implementation of its Groundwater Management Plan during fiscal year 2025, emphasizing the pro- tection and conservation of aquifers beneath the PUF Lands. This plan balances commercial activity with sustain- able water use to support the long-term health of water resources across the Permian Basin.
PRODUCED WATER RECYCLING & INFRASTRUCTURE
MONITORING & REPORTING Accurate monitoring and reporting are foundational to UL’s water management program. Mineral developers operating on the PUF Lands are required to meter and report water volumes extracted and transported in accordance with applicable lease terms and program requirements. The monitoring framework includes more than 440 operator-owned water meters and ten water import/export meters, with continued imple- mentation across operations. Data is reported on a monthly basis to support accountability and informed decision-making. LOOKING AHEAD Looking forward, UL plans to further enhance its water management strategies in 2026, with an increased focus on the full water management life cycle, ex- panded beneficial reuse of polished produced water, and continued conservation of fresh groundwater aquifers beneath the PUF Lands. These efforts reflect UL’s commitment to continuous improvement and responsible stewardship, ensuring that water resourc- es are protected while supporting ongoing and future operations.
A central component of UL’s water strategy is the expanded use of produced water for drilling and com- pletion operations. UL encourages operators to recycle produced water, which can reduce fresh groundwater usage by approximately 60 percent per well. While produced water recycling requires additional infra- structure - including treatment facilities, storage, and transfer systems - it plays a critical role in preserving freshwater aquifers. During fiscal year 2025, UL worked with Continental Resources to complete one single produced water recycling facility containing 750 thousand barrels and the first large-scale produced water recycling mega-fa- cility on UL with the capacity to store approximately 3.5 million barrels of recycled produced water at any given time for future oil and gas completions, directly supporting groundwater conservation across the Lands.
RESEARCH, COLLABORATION, AND BENEFICIAL REUSE
UL actively participates in research and collaboration with subject matter experts, industry participants, and environmental organizations to advance water man- agement practices. In 2025, UL became a member of the Texas Produced Water Consortium (TxPWC) and is partnering with the consortium on a pilot project to evaluate efficient irrigation methods. The long-term ob- jective of this research is pasture restoration and the potential future use of treated, desalinated produced water for irrigated cropland, where appropriate. UL is also collaborating with water management com- panies to research and evaluate opportunities for the beneficial reuse of produced water, further strength- ening UL’s understanding of water treatment, logistics, and reuse potential.
barrels of produced water were used for oil and gas well completions in FY25, preserving a significant volume of groundwater across PUF Lands. 125 MI LL ION
University Lands approaches water management with a long-term stewardship mindset, focusing on conservation, accountability, and responsible use throughout the full water life cycle.
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EMERGING ENERGY PROJECTS ON PUF LANDS
Technology
Number of Projects
Total Acres Leased
Megawatt Capacity
Wind
5
~67,100
~560
Solar
5
~7,050
~835
Battery Storage
4 Active / 10 In Development
~131
~395
Emerging energy efforts in fiscal year 2025 focused on disciplined evaluation, market engagement, and long-term positioning of the PUF Lands.
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Emerging Energy As energy markets evolve, University Lands (UL) has taken a deliberate, market-driven approach to emerging energy, focused on long-term positioning, disciplined evaluation, and alignment with the stewardship
and engaged with potential partners across a range of emerging energy technologies across the PUF Lands. While many opportunities extend beyond a single fiscal year, these efforts reflect meaningful progress in positioning UL for future project execution. Organizational capacity continued to expand during the year, strengthening UL’s ability to manage parallel evaluations as project scale and complexity increase. UL’s emerging energy efforts also gained broader visibility through a Bloomberg feature highlighting the PUF Lands’ unique role at the intersection of traditional energy production and surface-based infrastructure opportunities. UL remains committed to evaluating emerging energy opportunities thoughtfully, ensuring development supports long-term stewardship and enhances the value of the PUF Lands for the institutions it serves.
responsibilities of the Permanent University Fund (PUF) Lands. In fiscal year 2025, UL’s Emerging Energy team strengthened its market intelligence, expanded its market engagement, and built organizational readiness for large-scale infrastructure opportunities. A key area of focus during the year was the growing demand for reliable power from data center infrastructure seeking sites in West Texas. UL engaged with power developers, utilities, infrastructure providers, and end-users to better understand siting requirements, transmission considerations, behind the meter power structures, and land-use implications. These discussions enhanced UL’s ability to serve as a valuable partner to developers seeking to site large scale infrastructure projects on PUF lands. Throughout fiscal year 2025, the Emerging Energy team evaluated projects, advanced competitive processes,
CHAVES
GAINES
DAWSON
BORDEN
SCURRY
U87
LEA
EDDY
OTERO
ANDREWS
MARTIN
HOWARD
MITCHELL
Midland
LOVING
ECTOR
WINKLER
MIDLAND
GLASSCOCK
STERLING
I20
WARD
HUDSPETH
TOM GREEN
CULBERSON
CRANE
UPTON
REAGAN
REEVES
IRION
I10
SCHLEICHER
PECOS
JEFF DAVIS
CROCKETT
SUTTON
BREWSTER
TERRELL
PRESIDIO
VAL VERDE
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Grazing & Agriculture
The Permanent University Fund (PUF) Lands have long supported working landscapes rooted in ranching, farming, and land stewardship. University Lands (UL) continues this legacy by actively man- aging grazing and agricultural operations to ensure these lands remain productive, resilient, and sus- tainable for future generations. UL oversees livestock stocking rates and wildlife populations to maintain rangeland health and ecological balance. Regular aerial surveys using helicopters and drones provide insight into wildlife density, habitat conditions, and harvest recommen- dations, supporting informed and adaptive land management. Infrastructure investment remains central to UL’s grazing and agriculture program. In fiscal year 2025, UL worked closely with grazing lessees and conservation partners to improve fencing, water distribution systems, and related infrastructure that support rotational grazing and long-term land health. UL also integrates land restoration into its agricul- tural stewardship approach by coordinating with operators to remove abandoned infrastructure and reseed disturbed areas using region-appropriate, pollinator-friendly grassland mixes. In total, ap- proximately $4.8 million was invested back into the PUF Lands through combined stewardship efforts during the year.
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(by University Lands, grazing lessees, United States Department of Agriculture – Natural Resources Conservation Service, Texas Parks and Wildlife Department, Texan by Nature) $4 . 8 MM INVESTED BACK INTO PUF LANDS 35 , 700 ACRES (56 SECTIONS) OF BRUSH CONTROL APPLIED 47.5 MILES OF FENCING INSTALLED 48 RANCH WATER
IMPROVEMENTS 16.5 MILES OF WATER PIPELINE INSTALLED 8 RANCH WATER WELLS PLUGGED
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79 LEASE RESTORATION INITIATIVES 186 WELLS PLUGGED & ABANDONED
Environmental Stewardship Environmental stewardship is embedded in the daily operations of University Lands (UL) and guides how development and land management activities are carried out across the Permanent University Fund (PUF) Lands. Through proactive oversight, large-scale restoration, and rigorous compliance monitoring, UL works to balance responsible resource development with long-term land and ecosystem health. A central focus of UL’s stewardship efforts is addressing legacy and inactive oil and gas infrastructure. Through- out fiscal year 2025, UL continued coordinated restoration initiatives aimed at reducing environmental risk, minimizing emissions, and returning disturbed areas to productive use. These efforts are paired with consistent inspection programs that reinforce accountability and regulatory confidence. In addition to restoration work, UL actively manages its mineral inventory to ensure lands remain positioned for responsible future development. Low- and non- producing leases are routinely evaluated and, when appropriate, returned to inventory to support long-term planning and redevelopment opportunities. A major milestone completed during fiscal year 2025 was the Texon Restoration Project, the largest single restoration project undertaken by UL since 2019. This multi-year effort demonstrates the scale and complexity of UL’s stewardship responsibilities and reflects UL’s commitment to addressing legacy impacts comprehensively.
72 TANK BATTERY FACILITIES & PUMPING UNITS REMOVED 180 CALICHE WELL PADS RECLAIMED 60 MILES OF CALICHE ROADS RESTORED 170 MILES OF FLOWLINE REMOVED 70 MILES OF ELECTRIC LINE REMOVED 360 ACRES RETURNED TO NATIVE PASTURELAND
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Fiscal Year 2025 HIGHLIGHTS
Environmental stewardship at University Lands combines large-scale restoration, rigorous oversight, and long-term accountability to protect the PUF Lands for future generations.
INSPECTION & OVERSIGHT ACTIVITY 1,694 oil & gas lease inspections 407 oil & gas infrastructure inspections 28 oil & gas water wells plugged
440 oil & gas water wells metered daily
MINERAL INVENTORY MANAGEMENT 254 low- or non-producing leases terminated 148,000 mineral lease acres returned to inventory
20 miles of powerline & ~400 poles removed 3 central tank batteries & 1 satellite facility removed TEXON RESTORATION PROJECT 2,637.8 acres restored and returned to inventory 57 wells plugged and abandoned 57 well sites & 17 additional sites reclaimed and reseeded 60 miles of poly flowline removed
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2025 Annual Report
Caliche Pit Restoration
Across the Permanent University Fund (PUF) Lands, historical caliche mining has left behind excavated areas that require thoughtful resto- ration to ensure long-term safety and land health. University Lands (UL) addresses these legacy disturbances through a comprehensive caliche pit restoration program focused on stabilizing sites and returning them to productive use. Restoration activities include reshaping pit walls, stabilizing slopes, preparing seed beds, and planting region-specific, pollinator-friendly vegetation. Early-stage watering supports plant establishment in the arid West Texas climate. Reclaimed caliche pits function as water catchments, improve soil health, reduce erosion, and support livestock and wildlife habitat. By integrating caliche pit restoration into broader surface management efforts, UL improves land functionality while reducing long-term risk.
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University Lands
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2025 Annual Report
UL Surface Management
Surface management at University Lands (UL) integrates surface oversight, monitoring, restoration, research, and collaboration to support responsible land use across the Permanent University Fund (PUF) Lands. These efforts contribute to safe and responsi- ble surface-use while protecting land, water, and wildlife resources across one of the most active land portfolios in the Permian Basin. Operators on PUF Lands are required to comply with applicable laws and contractual requirements, which UL oversees through routine surface inspections. When discrepancies are identified, UL requires corrective action to protect the integrity of development activity and the long-term value of the Lands. UL advances restoration and improvement initiatives designed to return disturbed areas to productive use. Efforts in FY25 included caliche pit restoration to stabilize legacy disturbances, plugging of marginal and non-productive wells, and promotion of advanced control technologies and proactive inspection practices. UL also strengthened collaboration with industry experts and supported government, academic, and industry research initiatives to en- hance surface management practices and reinforce long-term stewardship of the PUF Lands.
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University Lands
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Flagship Projects & Collaborations
UL’s surface initiatives are strengthened through strategic collaborations with conservation organizations, academic institutions, and industry partners. These flagship projects reflect UL’s commitment to science-based land management and scalable restoration solutions.
DELAWARE RIVER BASIN RESTORATION PROJECT Texan by Nature | Culberson County
TEXAS NATIVE SEEDS PROJECT Caesar Kleberg Wildlife Research Institute | Texas A&M University–Kingsville UL entered a three-year research collaboration with the Texas Native Seeds Program (TNS) to evaluate reclamation methodologies across caliche pits, reserve pits, pad sites, rights-of-way, and other disturbed landscapes. The research focuses on identifying optimal native seed mixes and restoration strategies tailored to Permian Basin conditions. Benefits include: • Improved wildlife habitat • Enhanced stormwater management • Reduced spread of invasive species • Increased planting success and lower long-term maintenance costs
In partnership with Texan by Nature and ConocoPhillips, and building on restoration efforts led by the Bureau of Land Management (BLM) in New Mexico, UL is advancing restoration efforts across approximately 7,200 acres in Culberson County. The project addresses erosion, sedimentation, and declining water resources impacting the Delaware River Basin. Restoration activities include targeted treatment of upland brush species to: • Improve water quality and availability • Enhance drought resilience and water retention • Improve forage quality for livestock and wildlife • Strengthen soil health and reduce erosion • Enhance habitat for grassland birds, mule deer, pronghorn, and other species The project also serves as a demonstration model for scalable restoration approaches across similar West Texas landscapes.
ADDITIONAL RESEARCH & INSTITUTIONAL COLLABORATIONS UL maintains active research and data-sharing relationships with a range of academic institutions to support surface stewardship, land health, and resource management objectives:
TEXAS A&M NATURAL RESOURCES INSTITUTE
BORDERLANDS RESEARCH INSTITUTE & SUL ROSS UNIVERSITY
TEXAS TECH UNIVERSITY
These collaborations integrate research-driven insights into surface operations, strengthening stewardship practices, and supporting long-term sustainability across the PUF Lands.
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PUF LANDS MANAGER
2.1 million acres that produce two income streams: mineral income, which comes mainly from oil and gas bonuses, rentals and royalties, and surface income such as income from grazing leases, easements and wind power generation.
MINERAL INCOME
SURFACE INCOME
The constitution permits the UT System and Texas A&M University System to each sell a limited amount of bonds (a type of borrowing) to fund construction and other capital expenses at system institutions. The bonds are secured by the AUF, which gives the systems the lowest interest rates available, saving the state money. Bond proceeds may not be used for operational expenses.
PUF income and investment assets are managed by UTIMCO, a nonprofit corporation operating under the authority of the UT System Board of Regents.
UNDERSTANDING
Established in the Texas Constitution of 1876 through the appropriation of land.
CONSTITUTION STATE OF TEXAS
PERMANENT UNIVERSITY FUND
UTSYSTEM.EDU/PUF
A constitutional permanent endowment that supports excellence in the The University of Texas and Texas A&M University Systems.
KEY FACTS Constitution gives management to UT SYSTEM Board;
THE UNIVERSITY OF TEXAS SYSTEM CONSTITUTIONAL USES OF AUF:
Grows from oil and gas production and investment income;
Supports construction and capital expenses at institutions of UT and TAMU Systems;
Corpus is not spent except for expenses of managing the land and the investment assets;
Support and maintenance of UT System Administration
Support and maintenance of UT Austin
Payment of principal and interest on PUF bonds
Constitution allows UT Austin and UT System to benefit from AUF for operational expenses.
AUF
TEXAS A&M UNIVERSITY SYSTEM
The Available University Fund is PUF surface income plus an annual distribution from the total return on PUF investments, constitutionally allocated 2/3 to UT System and 1/3 to Texas A&M University System.
The Texas A&M University System has similar constitutional restrictions on use of AUF. Some Texas A&M institutions are not eligible for PUF bonds.
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