Texas system regents selling oil reserves

AUSTIN (AP) - University of Texas System regents have approved a plan to sell some oil and natural gas reserves for about $1 billion. The reserves are beneath the system's vast West Texas lands. The UT System would be paid up front by an investment bank or oil company. In return, the company would need to agree to provide a certain amount of oil and gas from its 2.1 million acres during the next decade or so. Since 1923, when the system's first well began producing, it has received royalty payments only for actual production, not future production. The Austin American-Statesman reports unclear what effect the so-called forward contract, approved yesterday, would have on tuition and fees. UT finance professor Keith Brown says a forward contract essentially amounts to price insurance, or locking in today's... [read full story]