Net Acres

DEFINITION of 'Net Acres'

The amount of leased real estate that a petroleum and/or natural gas company has a true working interest in. Net acres express actual percentage interest, when a company shares its working interest with another company; the total acreage under lease by a company is referred to as gross acres. Net acres account for the company's percentage interest, multiplied by the gross acreage. If a company holds the entire working interest, its net acreage and gross acreage will be the same.

BREAKING DOWN 'Net Acres'

The number of net acres a company has invested in, tells investors something about the company's size, market position and current activity, but it does not tell the whole story. What is the company doing with that acreage? Is it drilling wells, and at what pace? How many barrels of oil is the area producing, and how many is it expected to produce? The larger the company, the more net acres it will have.

RELATED TERMS
  1. Gross Acres

    The amount of leased real estate, that a petroleum and/or natural ...
  2. Recovery Property

    A specific class of depreciable real estate. Recovery property ...
  3. Accelerated Cost Recovery System ...

    A system of depreciation introduced by the Economic Recovery ...
  4. Prior Probability

    The probability that an event will reflect established beliefs ...
  5. Net Profits Interest

    A percentage that is paid out of the working interest owner's ...
  6. Triple Net Lease

    A lease agreement that designates the lessee (the tenant) as ...
Related Articles
  1. Managing Wealth

    3 Of The Most Lucrative Land Deals In History

    Some modern real estate purchases may seem overly expensive, but they are nowhere close to the priciest land deals in history.
  2. Trading

    The Real Estate of Oil

    When it comes to real estate, it is location, location, location - and a location with oil or gas underneath may be the most attractive type of all.
  3. Trading

    Natural Gas Industry: An Investment Guide

    Investors looking into this industry are faced with a confusing amount of information. We explain the important concepts and terms.
  4. Investing

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  5. Markets

    Undervalued Real Esate at Forestar Group

    Activists move to unlock the value of Forestar Group.
  6. Managing Wealth

    The Top 5 Mid-Cap Natural Gas Stocks for 2016 (COG, CHK)

    Discover the top five mid-cap natural gas stocks for 2016 with a summary of each company and explanations of how each company will grow in the new year.
  7. Managing Wealth

    What is a Capital Lease?

    A lease considered to have the economic characteristics of asset ownership.
  8. Personal Finance

    How Does a Modified Gross Lease Work?

    A modified gross lease is a rental agreement where, in addition to their rent, tenants pay a share of other costs associated with the property.
  9. Investing

    Calculating Return on Net Assets

    Return on net assets measures a company’s financial performance.
  10. Investing

    Uncovering Hidden Debt

    Understand how financing through operating leases, synthetic leases, and securitizations affects companies' image of performance.
RELATED FAQS
  1. What kinds of real estate transactions use triple net (NNN) leases?

    Learn how a net-net-net or triple net lease works and why it is popular in commercial real estate transactions. It is also ... Read Answer >>
  2. What are the differences between gross profit and net income?

    Find out how companies determine gross profits and net income, and how these figures provide quick snapshots of their financial ... Read Answer >>
  3. Why might a bond agreement limit the amount of assets that the firm can lease?

    Bond covenants can limit the amount of leases a company can have because leasing contracts are a form of debt. Taking on ... Read Answer >>
  4. What are the differences between single, double and triple-net leases?

    Learn the ins and outs of net lease agreements, including the key differences between single net, double net and triple net ... Read Answer >>
  5. You are currently reviewing the following information for JKL Corp ...

    Free info on financial certification exams including study guides, exam questions, and much more! Read Answer >>
  6. At the beginning of the year, HIJ Corp. began to lease new equipment ...

    The correct answer is: b) Total Lease Payment = Interest expense + Principal repayment Step 1: Interest expense = 8.5% of ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center