Net Acres
Contents
Deciphering Net Acres: A Comprehensive Guide for Investors
Understanding Net Acres
Net acres, a critical metric in the petroleum and natural gas industry, represent the leased real estate that a company holds in relation to its true working interest. Unlike gross acres, which count total leased land, net acres adjust for the actual percentage of ownership in a lease.
Analyzing Net Acres for Investment Insights
Investors often calculate net acres on a per-project basis by multiplying gross acres by the ownership percentage. This figure provides valuable insights into a company's exposure and positioning in different markets and regions. Changes in net acres signal expansion or contraction, offering investors a glimpse into a company's growth trajectory.
Exploring Net Royalty Acres
In addition to net acres, investors may encounter the concept of net royalty acres, representing the royalty interest of a landowner in an oil and gas lease. While net royalty acres influence pricing for mineral or royalty interest, they do not directly impact company assessments.