Univ of Texas (UT) banking on profit ($1B) from oil land deals

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Up to $1 billion possible to beef up its endowment

Houston Chronicle Austin Bureau

AUSTIN — The University of Texas System is looking to trade on high oil prices — and potentially raise up to $1 billion for its endowment — by selling future production from land it manages in West Texas.

The regents this week authorized UT officials to negotiate with one or more parties to sell a portion of its oil and gas production at a fixed price over a set time period.

The buyer would pay up front for the oil and gas produced in coming years from 2.1 million acres spanning 19 West Texas counties.

"Current market conditions have given us this opportunity to take advantage of relatively high oil and gas prices and low interest rates," said Scott Kelley, the UT System's executive vice chancellor for business affairs, in a written statement.