The State Institutional and Trust Lands Administration (SITLA), which manages 3.5 million acres of trust lands scattered around Utah, took in $94 million in gross revenues in the fiscal year that ended June 30. That was $33 million more than the agency collected the previous year, which had been a record.
Of the $94 million, $72.5 million went to the trust's primary beneficiary - the Permanent State School Fund. Interest from that $500 million fund is distributed to public schools statewide.
Another $9 million was split between the other 11 institutions SITLA represents. Those include the University of Utah, Utah State University, a miners' hospital at the U. and a state Division of Water Resources' revolving loan fund for water development projects.
"This year was not even in the same realm" as previous years, said trust executive director Kevin Carter, who has been involved in trust land administration since 1981.
He noted that "1981 was a pretty good year. There was a solid mineral boom in Utah and almost all of our available lands had been leased for oil and gas. But there was nothing like the enthusiasm we've seen the last couple of years."
A Bush Administration push to increase domestic oil and gas production was partially responsible. But interest in Utah trust lands exploded after Wolverine Gas and Oil Corp. struck oil this spring near Sigurd. The company predicted the subterranean reservoir, which has been yielding 1,500 barrels of oil per day, could hold up to 200 million barrels.
"The company will be drilling its third well on one of our leases," Carter said, "and they're also doing a massive exploration program on a 100,000-acre block of our property south of Richfield to determine whether this same geologic formation continues to the south.
"It's every landowner's dream to have 100,000 acres and have somebody find oil on it," he added.
Just the possibility of a big find prompted oil companies and speculators to snap up every available lease from the trust and the U.S. Bureau of Land Management.
"We have demand now for property we couldn't give away two years ago," trust spokesman Dave Hebertson quipped.
While SITLA does not have more parcels available in central Utah, it stands to earn sizable royalties if Wolverine and other exploratory companies hit liquid gold on those leased trust lands.
Carter said the windfall is not entirely the result of Wolverine's find. Interest also has been high in the Uinta Basin, the state's traditional oil and gas region. Several new wells are about to come on line, he said, and SITLA is poised to receive more acreage there from a land exchange that would give the federal government several scenic parcels along the Colorado River.
SITLA also received an unexpected boost from a $1 million bid for a uranium lease near Ticaboo in southeastern Utah. "It's really exciting to see uranium come back," Carter said, citing increased interest in other properties with uranium potential around the San Rafael Swell.
In addition, the sale of trust lands around St. George and Cedar City is bringing big returns. Hebertson said the agency sold 34 acres near Ivins for $175,000 an acre.
To increase the value of its holdings in those fast-growing areas, the trust invested roughly $5 million this year on infrastructure improvements. "Adding roads, water, fiber optics ramps up the value of those properties," said Hebertson.
Carter also is optimistic SITLA will receive good future returns on trust lands on Parker Mountain, near Fish Lake in Piute County. Those lands contain good habitat for prairie dogs. Iron County developers can purchase "credits" to keep those lands free from development to mitigate damage to prairie dog habitat around Cedar City.
"If that works out the way we think, we'll probably expand that program," Carter said.
mikeg@sltrib.com
