Tract-based systems are the only true way to calculate accurate net acreage values.
The conversation occurs every day about why tract-based land management solutions are more accurate than a contract based system for a company to understand their net acreage, and ultimately the value of the company.
Tracts are the lowest common denominator in the land business, so having the ability to query a system to see all leases associated with tracts is extremely important. We give our users the ability to cross query tract data both in 2D and now 3D terms, i.e surface, depth and also over time. Using a tract-based design helps our users with accuracy in cost and net acreage reporting.
A contract may have multiple tracts as well as multiple mineral owners within a lease agreement, all with different shares of ownership in each of the tracts. Systems that only account for acreage by contract cannot account for leased net acres in each of the tracts.
Ownership identified uniquely within each of the tracts provides the exact net acres of each tract, as well as each mineral owner’s royalty and bonus on a tract-by-tract basis. This is based on the actual geographical location (where it is within the prospect area) and geological formation (what depths are included).
Tract solutions have “unique identifiers,” while contracts aggregate ownership and create inequities and inaccuracies in the value of acreage. Contracts miss the true value in net acres on each tract, either under or over estimating. System-wide errors run between 10-30%.