The UT System has located 21,000 potential new well sites on its oil lands, which could generate significant revenue for the System.
University Lands, a division of the System’s Office of Business Affairs, manages 2.1 million acres that were granted to the System more than a century ago and make up the Permanent University Fund, a state endowment for public higher education. Through technological advances such as horizontal drilling, the UT System has located new potential well sites in its oil-rich land in West Texas to add to its current 9,000 active sites.
Philip Aldridge, UT System Business Development associate vice chancellor, said the addition is technology-driven. Advances in areas such as hydraulic and horizontal drilling increase the profit potential for companies leasing the land. According to the leasing contract, when the companies make more money, UT also gets a larger sum which goes into the PUF.
“In the short run, [the revenue change will be] not much because prices are so low right now, and the drilling activity has slowed down considerably,” Aldridge said. “Over time, as prices recover for oil and natural gas, there should be a lot of opportunities to increase revenue.”
Alyssa Ray, external relations officer for University Lands, said the company will hire 15–20 interns from UT-Austin and Texas A&M University to analyze the sites over the summer. There are currently more than 200 companies leasing land for the 9,000 active wells, producing 220,000 barrels of oil and gas.
“The Lands will serve as a giant laboratory that will not only increase PUF revenues but also promote oil and gas industry knowledge and research,” Ray said. “With the advent of technology such as horizontal drilling, multiple layers of hydrocarbon-producing rock beneath the Permian Basin are able to be targeted. We’re trying to address the complexities of these technological advancements within University Lands’ leasing agreements to ensure that the acreage is effectively developed.”
Vu Nguyen, a petroleum engineering graduate student, will be one of the interns with University Lands this summer working on making the oil business in Texas more efficient.
“We will be doing production optimization for wells,” Nguyen said. “[We will study] the performance of the wells. They want to hire students to go there and to find a way to improve the performance.”