| Leases |
7.Leases
In the normal course of business, we enter into lease agreements to support our operations. During the three months ended September 30, 2024, we entered into an agreement to begin leasing a portion of our field vehicles, which are accounted for as finance leases and primarily have an initial term of 48 months. Our operating leased assets include right-of-way easements for our wells and facilities, office space and other assets.
Balance Sheet Information
The following table shows the classification and location of our right-of-use assets and lease liabilities on our condensed consolidated balance sheet:
|
|
|
|
|
|
(in thousands) |
September 30, |
|
December 31, |
|
2024 |
|
2023 |
Operating Leases |
|
|
|
|
|
Assets |
|
|
|
|
|
Operating Lease Right-of-Use Assets, Net |
$ |
15,650 |
|
$ |
16,726 |
Liabilities |
|
|
|
|
|
Accrued and Other Current Liabilities |
$ |
1,631 |
|
$ |
1,676 |
Other Long-Term Liabilities |
$ |
14,333 |
|
$ |
14,716 |
|
|
|
|
|
|
Finance Leases |
|
|
|
|
|
Assets |
|
|
|
|
|
Property, Plant and Equipment |
$ |
970 |
|
$ |
— |
Less: Accumulated Depreciation |
|
(9) |
|
|
— |
Total Property, Plant and Equipment, Net |
$ |
961 |
|
$ |
— |
Liabilities |
|
|
|
|
|
Accrued and Other Current Liabilities |
$ |
205 |
|
$ |
— |
Other Long-Term Liabilities |
$ |
627 |
|
$ |
— |
Statement of Operations Information
The following table provides the components of lease costs recognized in our condensed consolidated statements of operations for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
(in thousands) |
September 30, |
|
September 30, |
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
Operating Lease Costs |
|
|
|
|
|
|
|
|
|
|
|
Direct Operating Costs (1) |
$ |
355 |
|
$ |
324 |
|
$ |
1,031 |
|
$ |
927 |
General and Administrative (1) |
|
516 |
|
|
230 |
|
|
1,550 |
|
|
627 |
Short-term lease costs (2) |
|
3,187 |
|
|
5,298 |
|
|
9,980 |
|
|
12,628 |
Finance Lease Costs |
|
|
|
|
|
|
|
|
|
|
|
Amortization of right-of-use asset (3) |
|
9 |
|
|
— |
|
|
9 |
|
|
— |
Interest on Lease Obligations (4) |
|
2 |
|
|
— |
|
|
2 |
|
|
— |
Total Lease Cost |
$ |
4,069 |
|
$ |
5,852 |
|
$ |
12,572 |
|
$ |
14,182 |
| (1) |
Does not include short-term lease costs. |
| (2) |
Included in “Direct Operating Costs” or “General and Administrative” in our condensed consolidated statements of operations and primarily include field equipment rentals. |
| (3) |
Included in “Depreciation, Amortization and Accretion” in our condensed consolidated statements of operations. |
| (4) |
Included in “Interest Expense, Net” in our condensed consolidated statements of operations.
|
Cash Flow Information
The following table summarizes supplemental cash flow information related to leases:
|
|
|
|
|
|
(in thousands) |
Nine Months Ended September 30, |
|
|
2024 |
|
|
2023 |
Cash Paid for Amounts Included in the Measurement of Lease Liabilities |
|
|
|
|
|
Operating Cash Flows from Operating Leases |
$ |
1,931 |
|
$ |
1,051 |
Financing Cash Flows from Finance Leases |
$ |
243 |
|
$ |
— |
Right-of-Use Assets Obtained in Exchange for Lease Liabilities, Net |
|
|
|
|
|
Operating Leases |
$ |
768 |
|
$ |
9,462 |
Finance Leases |
$ |
970 |
|
$ |
— |
Lease Terms and Discount Rates
The following table provides lease terms and discount rates related to leases:
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
December 31, 2023 |
Weighted Average Remaining Lease Term (Years) |
|
|
|
|
|
|
Operating Leases |
|
|
|
7.1 |
|
|
7.6 |
Finance Leases |
|
|
|
3.8 |
|
|
— |
Weighted Average Discount Rate |
|
|
|
|
|
|
|
Operating Leases |
|
|
|
6.42% |
|
|
6.30% |
Finance Leases |
|
|
|
7.45% |
|
|
— |
Annual Lease Maturities
The following table provides maturities of lease liabilities at September 30, 2024:
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
Operating Leases |
|
Finance Leases |
|
Total |
Remainder of 2024 |
|
|
$ |
597 |
|
$ |
64 |
|
$ |
661 |
2025 |
|
|
|
2,230 |
|
|
257 |
|
|
2,487 |
2026 |
|
|
|
1,961 |
|
|
257 |
|
|
2,218 |
2027 |
|
|
|
3,302 |
|
|
238 |
|
|
3,540 |
2028 |
|
|
|
2,868 |
|
|
136 |
|
|
3,004 |
Thereafter |
|
|
|
9,241 |
|
|
— |
|
|
9,241 |
Total Lease Payments |
|
|
|
20,199 |
|
|
952 |
|
|
21,151 |
Less: Interest |
|
|
|
(4,235) |
|
|
(120) |
|
|
(4,355) |
Present Value of Lease Liabilities |
|
|
$ |
15,964 |
|
$ |
832 |
|
$ |
16,796 |
Subleases
During the fourth quarter of 2023, we entered into two subleases related to our previous office space in Houston, Texas. The subtenants are responsible for monthly fixed rent and certain operating expenses associated with the office building, including utilities, which are considered variable lease payments. The sublease income is recorded as a reduction of rent expense under our head lease and is included in “General and Administrative” expense on the consolidated statements of operations. During the three and nine months ended September 30, 2024, we recognized total sublease income of $0.1 million and $0.4 million, respectively, including variable lease payments.
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