Water becomes key asset in increased production of Permian Basin oil, gas

University Lands has awarded a contract to a Houston-based joint venture to provide water services to oil and natural gas operations on 167,000 acres of state-owned lands in the Permian Basin of West Texas.

Houston-based UL Water Midstream LLC will source groundwater for new hydraulic fracturing projects as well as gather, store, transport, recycle, and dispose of wastewater produced by oil and natural gas wells on university-owned lands in Ward, Winkler and Loving counties.
Acquiring and moving water has become a growth industry in the arid Permian Basin where it is needed to drill new wells and for the hydraulic fracturing process. Recycling and disposal of wastewater from oil and natural gas operations has also created a boom in saltwater disposal wells throughout the region.

"Our goal is to drive the adoption of a more economic and holistic approach to oilfield water management," University Lands CEO Mark Houser said in a statement. "The choice is the operator's, but we believe that there are economies of scale and benefits to connected systems, and that with time, these benefits will become more and more evident."

University Lands manages the mineral and surface rights for 2.1 million acres of land in West Texas with proceeds going to the Permanent University Fund, or PUF.

Founded in 1876, the fund supports both The University of Texas System and the Texas A&M University System. PUF received more than $1 billion of income from mineral rights during fiscal year 2018, state figures show.
Providing water and disposal of fracking water makes oil flow in the shale wells.  It is another reason why the US is less dependent on imported oil than it has been since the early 1970s.  When Texas came into the Union it offered this West Texas land to the US in return for retiring the national debt of the Republic of Texas.  The US refused and Texas continues to benefit from that refusal.  That is particularly the case for the State's premier university systems whose endowment is one of the highest in the nation.


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