| Leases |
8.Leases
In the normal course of business, we enter into lease agreements to support our operations. Our operating leased assets include right-of-way easements for our wells and facilities, office space and other assets. Our finance leases include field vehicles.
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) |
March 31, |
|
December 31, |
|
2025 |
|
2024 |
Operating Leases |
|
|
|
|
|
Assets |
|
|
|
|
|
Operating Lease Right-of-Use Assets, Net |
$ |
14,573 |
|
$ |
15,016 |
Liabilities |
|
|
|
|
|
Accrued and Other Current Liabilities |
|
1,530 |
|
|
1,568 |
Other Long-Term Liabilities |
|
13,751 |
|
|
14,040 |
|
|
|
|
|
|
Finance Leases |
|
|
|
|
|
Assets |
|
|
|
|
|
Property, Plant and Equipment |
$ |
3,765 |
|
$ |
2,902 |
Less: Accumulated Depreciation |
|
(386) |
|
|
(171) |
Total Property, Plant and Equipment, Net |
|
3,379 |
|
|
2,731 |
Liabilities |
|
|
|
|
|
Accrued and Other Current Liabilities |
|
743 |
|
|
571 |
Other Long-Term Liabilities |
|
2,139 |
|
|
1,747 |
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:
|
|
|
|
|
|
(in thousands) |
Three Months Ended March 31, |
|
|
2025 |
|
2024 |
Operating Lease Costs |
|
|
|
|
|
Direct Operating Costs (1) |
$ |
328 |
|
$ |
336 |
General and Administrative (1) |
|
540 |
|
|
517 |
Finance Lease Costs |
|
|
|
|
|
Amortization of Right-of-Use Assets (2) |
|
215 |
|
|
— |
Interest on Lease Obligations (3) |
|
48 |
|
|
— |
Total Lease Cost |
$ |
1,131 |
|
$ |
853 |
| (1) |
Does not include short-term lease costs. |
| (2) |
Included in “Depreciation, Amortization and Accretion” in our condensed consolidated statements of operations. |
| (3) |
Included in “Interest Expense, Net” in our condensed consolidated statements of operations.
|
During the third quarter of 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. As of March 31, 2025, we had 69 vehicle leases.
Short-term Leases
Our short-term lease costs, consisting primarily of field equipment rentals, totaled $2.7 million and $3.1 million, respectively, for the three months ended March 31, 2025 and 2024.
Cash Flow Information
The following table summarizes supplemental cash flow information related to our leases:
|
|
|
|
|
|
(in thousands) |
Three Months Ended March 31, |
|
|
2025 |
|
|
2024 |
Cash Paid for Amounts Included in the Measurement of Lease Liabilities |
|
|
|
|
|
Operating Cash Flows from Operating Leases |
$ |
751 |
|
$ |
620 |
Operating Cash Flows from Finance Leases |
|
45 |
|
|
— |
Financing Cash Flows from Finance Leases |
|
195 |
|
|
— |
Right-of-Use Assets Obtained in Exchange for Lease Liabilities, Net |
|
|
|
|
|
Operating Leases |
$ |
191 |
|
$ |
333 |
Finance Leases |
|
863 |
|
|
— |
Lease Terms and Discount Rates
The following table provides lease terms and discount rates related to our leases:
|
|
|
|
|
|
|
|
|
|
March 31, 2025 |
|
December 31, 2024 |
Weighted Average Remaining Lease Term (Years) |
|
|
|
|
|
|
Operating Leases |
|
|
|
6.7 |
|
|
6.9 |
Finance Leases |
|
|
|
3.6 |
|
|
3.7 |
Weighted Average Discount Rate |
|
|
|
|
|
|
|
Operating Leases |
|
|
|
6.42% |
|
|
6.42% |
Finance Leases |
|
|
|
7.45% |
|
|
7.45% |
Annual Lease Maturities
The following table provides maturities of our lease liabilities at March 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
Operating Leases |
|
Finance Leases |
|
Total |
Remainder of 2025 |
|
|
$ |
1,656 |
|
$ |
700 |
|
$ |
2,356 |
2026 |
|
|
|
1,977 |
|
|
933 |
|
|
2,910 |
2027 |
|
|
|
3,302 |
|
|
910 |
|
|
4,212 |
2028 |
|
|
|
2,868 |
|
|
716 |
|
|
3,584 |
2029 |
|
|
|
2,423 |
|
|
33 |
|
|
2,456 |
Thereafter |
|
|
|
6,819 |
|
|
— |
|
|
6,819 |
Total Lease Payments |
|
|
|
19,045 |
|
|
3,292 |
|
|
22,337 |
Less: Interest |
|
|
|
(3,764) |
|
|
(410) |
|
|
(4,174) |
Present Value of Lease Liabilities |
|
|
$ |
15,281 |
|
$ |
2,882 |
|
$ |
18,163 |
Subleases
We have 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 in the condensed consolidated statements of operations. During the three months ended March 31, 2025 and 2024, we recognized total sublease income of $0.1 million and $0.2 million, respectively, including variable lease payments.
|