University sale is good news for Basin

It’s no secret that the economic roller coaster has all of us on board. Here in oil and gas country, the last six months have been particularly difficult.

But maybe there are good things on the horizon. Wednesday’s University Lands Oil and Gas Lease Sale had  a pick up in bids that had some predicting a turnaround for the oil and gas industry.

Texas Land Commissioner Jerry Patterson, chairman of the Board for Lease for University Lands, was happy with the results. “Clearly, it’s better than it was in April,” he said.

Wednesday’s sale at the Petroleum Club brought in $13,957,805.47. The April 22 auction, by contrast, raised only $2.2 million for the Permanent University Fund, which provides the University of Texas and Texas A&M University systems with investment capital.

What’s more, Wednesday’s sale leased 35,807 acres out of 51,800 available. The April auction, when oil was closer to $45 a barrel, only leased 21,689 of 92,900 available acres.

James Holtzclaw, senior University Lands landman, said the sale was much better than anticipated.

The largest amount paid Wednesday was for a 647-acre tract of land in Andrews County. The $1,006,344.36 purchase was one of several large bids made by Shaw Interests Inc. of Midland, which on its own spent more than the entire April event raised.

William A. Chalfant of Chalfant Properties Inc. said he was successful on every bid he made Wednesday.

Chalfant said the increase in oil prices to above $75 a barrel is leading to an upturn in the industry. That fact is showing around the area with more signs of activity in the oil patch.

While the success of the sale does not mean our oil-dependent economy is out of the woods yet, it’s at least a sign of life in the industry.

The money raised Wednesday was still well below the record $43 million taken in at last October’s auction. But that auction had 229,742 acres available, of which around 115,000 were sold. The average winning bid per acre was $389.81 Wednesday, compared to $161.11 in April and $409 last October.

Of course, last October this area was still riding an economic boom and things have calmed considerably since then.

Patterson said the number of acres available continues to decline because University Lands has leased most of the oil and gas interests it controls on 2,100,000 acres in 19 West Texas counties.

During these troubled national and local economic times, we’ll take any sign of life we can get.