Members appointed to University Lands Advisory Board
AUSTIN – The University of Texas System Board of Regents Thursday named members to a newly-created advisory body to advise the Board on the operations and management of the University Lands Office. The office oversees activities on the 2.1 million acres of Permanent University Fund (PUF) lands, also known as University Lands, that serve as an extraordinary resource for the UT and Texas A&M system institutions.
Revenue from oil and gas production on University Lands flows into the Permanent University Fund, which supports capital projects at the institutions of the UT and Texas A&M Systems. In addition, a small percentage of the PUF is distributed annually to support UT Austin, Texas A&M College Station, Prairie View A&M and the System administrations. The revenue has helped both systems as they have distinguished themselves nationally as preeminent public higher education institutions, said UT System Chancellor Francisco G. Cigarroa, M.D.
“The Permanent University Fund has been of growing importance, particularly in a period when virtually all higher educational institutions around the nation, whether public or private, are experiencing curtailed revenue streams,” Cigarroa said.
The University Lands Advisory Board will include Alex Cranberg and Jeffrey Hildebrand, both UT System regents; Morris Foster, a Texas A&M University System regent, and Scott Kelley, UT System executive vice chancellor for business affairs. Rounding out the panel are industry experts Frank D. Tsuru, president and CEO of M3 Midstream LLC, and Thomas L. Carter, Jr., chairman and CEO of Black Stone Minerals Co., LP.
The advisory board will make recommendations to regents on operations and management and provide strategic direction for University Lands, which stretch across 19 far-West Texas counties in the oil-rich Permian Basin.
University Lands, a resource unique to Texas, was the vision of Republic of Texas President Mirabeau B. Lamar, who in 1838 urged the Texas Congress to establish the foundation for a vast system of public education.
Today, the PUF is a multi-billion dollar endowment. Under the Texas Constitution, the PUF secures bonds that support capital projects at institutions of the UT and A&M Systems. Each year the UT System Board of Regents approves a distribution from the return on investments in the PUF – typically about 5 percent – to the Available University Fund (AUF). Last year, for example, $689 million was distributed from the PUF to the AUF.
The constitution provides that the distribution first satisfy the debt service on PUF bonds, and that the remainder after debt service be used to support UT Austin, Texas A&M College Station and Prairie View A&M, in addition to support for the System administrations.
The recent growth in petroleum revenues from University Lands – projections are that this year’s revenues will reach an all-time high – required rethinking about how best to manage the resources, Cigarroa said. Recently, for example, strategic use of the PUF and the AUF has enabled the Board of Regents to lessen the need for tuition increases.
Combined, the advisory board members bring more than a century’s experience in the oil industry:
- UT System Regent Alex M. Cranberg of Houston is chairman of Aspect Holdings, LLC, which has made oil and gas discoveries in Texas, Louisiana, Belize, Hungary and Kurdistan. A summa cum laude UT Austin graduate with a bachelor of science degree in petroleum engineering and a MBA graduate from Stanford University, Cranberg was appointed to a six-year term as regent in 2011.
- UT System Regent Jeffrey D. Hildebrand of Houston is founder, chairman and CEO of Hilcorp Energy Co., which has operating rigs throughout the United States. He has a master of science degree in petroleum engineering and a bachelor of science in geology, both from UT Austin. He was appointed to a six-year term as regent in 2013.
- A&M System Regent Morris E. Foster of Houston is the former president of ExxonMobil Production Co., and is currently chairman of Stagecoach/Millcreek Resort. He received his bachelor of science degree in mechanical engineering from A&M. He also serves as chairman of the board of the University of Texas Investment Management Company (UTIMCO).
- Frank D. Tsuru of Houston has served as CEO and president of several energy concerns over a 30-plus year career in the oil and gas industry, where he has worked as an engineer, entrepreneur and executive manager. He is a graduate of the University of Kansas, where he received a bachelor of science degree in petroleum engineering.
- Thomas L. Carter of Houston has been chairman and CEO of Houston-based Black Stone Minerals Co., L.P., since its formation in 1998. In addition to his oil and gas exploration and production experience, Carter brings expertise in accounting and finance. He holds a master’s and bachelor’s degree in business administration from UT Austin.
- Scott C. Kelley is the UT System executive vice chancellor for business affairs and serves as the chief business officer for the UT System, overseeing the financial operations of the nine academic and six health institutions as well as for System Administration. He has a bachelor of science in economics from Brigham Young University; a MBA in finance from Oklahoma City University; and a master's and a doctorate in higher education administration from Harvard University.
About The University of Texas System
Educating students, providing care for patients, conducting groundbreaking research and serving the needs of Texans and the nation for more than 130 years, The University of Texas System is one of the largest public university systems in the United States, with nine academic universities, six health institutions and a fall 2013 enrollment of more than 213,000. The UT System confers more than one-third of the state’s undergraduate degrees, educates two-thirds of the state’s health care professionals annually and accounts for almost 70 percent of all research funds awarded to public universities in Texas. The UT System has an annual operating budget of $14.6 billion (FY 2014) including $3 billion in sponsored programs funded by federal, state, local and private sources. With about 90,000 employees, the UT System is one of the largest employers in the state.