Lubbock and 10 Panhandle cities have a purchase agreement thousands of acres of water rights owned by famed corporate raider T. Boone Pickens, potentially solidifying the group as the state’s largest holder of groundwater rights and closing a combative and fascinating chapter in water marketing in Texas.

The Canadian River Municipal Water Authority confirmed the purchase of water rights beneath 211,000 acres in seven counties north of Amarillo for $103 million, increasing their groundwater holdings by 80 percent and an estimated 4 trillion gallons. The sale was expected to close in July or August, based on a statement from the authority.

“It’s a huge step, to say the least,” authority general manager Kent Satterwhite said. “We’ve been working toward this for over a decade. To the authority, it means that we have at least 50 to 100 more years of water.”

Pickens’ Mesa Water company had for nearly a decade tried unsuccessfully to market water from beneath the rolling grassland to San Antonio, Dallas and other buyers.

But Pickens had grown increasingly concerned with the “deteriorating water supply in the Panhandle,” spokesman Jay Rosser said. 

The sale continued his focus on finding a value for a previously stranded resource, Rosser said, a comment echoed in a statement issued late Thursday.

“With this deal at this time, we have done that,” Pickens said in the statement. “This purchase and prior purchases have put roughly $200 million into the Panhandle economy for local ranchers and landowners. The Panhandle now has a reliable local water source that they can count on for hundreds of years.”

Pickens keeps his own rights to water beneath his Mesa Vista Ranch under the deal. The authority purchased more remote acreage in Hemphill and Linscomb Counties for $400 an acre and the rights in the remaining five counties for $500 an acre, Rosser said.

It was not immediately clear Thursday how the member cities would handle financing of the purchase. The authority would use contract revenue bonds, Satterwhite said.

Past purchases have had Lubbock and Amarillo, as the largest water consumers, shouldering the bulk of the purchase, followed by Plainview and then other city customers who may not have the same demand for future supplies.

No one in the state of Texas anything near the 475,000 acres of rights the authority would hold, Lubbock director Jim Collins said.

“It takes a lot of pressure off of future generations and future decision makers by where we’re going,” Collins said. “The pressure of Lake Meredith being in the situation it is — it’s not completely gone, but this could easily extend the life of the current wellfield by 50 to 100 years.”

The authority could look to purchase still more water, filling in gaps in a blanket of water rights across the counties, Satterwhite said.

“We’re probably going to try to fill in the blanks,” Satterwhite said.

Mesa Water floated several inventive schemes to deliver their billion-gallon bounty to big, thirsty cities.

The company considered pumping the water into the Brazos River to send it down to San Antonio. A pipeline was proposed to send the water to Dallas in lieu of an embattled East Texas reservoir proposal. A little-noticed bit of legislation appeared to give a small, Pickens-dominated water district eminent domain powers to build such a pipeline until the legislature clipped its wings.

San Antonio had shown some interest over the years, and the regional water plan that includes Dallas listed Pickens’ water as a potential, long-term water solution. But though the billionaire was confident his investment would become very valuable to the state, Mesa Water never closed a sale outside the region.

Groundwater beneath neighboring land meanwhile became critical for Lubbock, Amarillo, Plainview and other cities supplied by the authority.

Lake Meredith, once the cities’ main supply of drinking water, has withered under drought. The authority ceased pumping from the northern Panhandle reservoir earlier this year as lake levels slipped to historic lows.

The authority filled its pipes instead with groundwater drawn from beneath thousands of acres in Roberts County. 

Suppliers still prefer using lake water, which is usually cheaper and replenishes with the rain, to mining the aquifer with costly pumps and pipelines. But with Meredith crippled, most of Lubbock’s water in 2010 came from underground.

A year before, it became public the authority was interested in keeping Mesa Water’s holdings closer to home.

The authority sought a $75 million loan toward the purchase of 174,000 acres of Pickens water rights in January 2009, but talks fell apart.

But Pickens remained concerned about Lake Meridith’s fall, Rosser said. Keeping the water in the Panhandle meant addressing that problem while still showing the value of another asset in the land, he said.

“We’re talking about water that was stranded surplus in an area that’s clearly unsuitable for agriculture, for irrigation, and he’s realized a value and a market for that asset,” Rosser said. “For us, it’s a classic win-win.”