DEFINITION of Gross Acres
Gross acres is the amount of leased real estate that a petroleum and/or natural gas company has a working interest in. Gross acres is different from net acres if a company shares its working interest with another company or companies. The company's true interest is expressed in net acres. Net acres is calculated by multiplying the company's percentage interest by the gross acreage. If a company holds the entire working interest, its net acreage and gross acreage will be the same.
BREAKING DOWN Gross Acres
A company's number of gross acres is an indication to investors of the company's size, market position and current activity. However, a company's acreage does not tell the whole story. A potential investor needs to investigate what the company is doing with that acreage. Is it drilling wells? If so, at what pace? How many barrels of oil is the area producing and how many is it expected to produce?
Larger companies will usually have an interest in hundreds of thousands of gross acres, while smaller ones may only have an interest in tens of thousands of gross acres. The largest companies will have total holdings of millions of gross acres.