Annual report pursuant to Section 13 and 15(d)

Leases

v3.24.0.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
The Company currently has leases associated with contracts for office space, drilling rigs, and the use of well equipment, vehicles, information technology infrastructure, and other office equipment. The tables below, which present the components of lease costs and
supplemental balance sheet information, are presented on a gross basis. Other joint owners in the properties operated by the Company generally pay for their working interest share of costs associated with drilling rigs and well equipment.
The table below presents the components of the Company’s lease costs for the year ended December 31, 2023.
Years Ended December 31,
2023 2022 2021
(In thousands)
Components of Lease Costs
Finance lease costs $262  $228  $277 
Amortization of right-of-use assets (1)
251  203  237 
Interest on lease liabilities (2)
11  25  40 
Operating lease cost (3)
49,502  38,803  37,734 
Short-term lease cost (4)
24,860  19,426  347 
Variable lease costs (5)
3,327  2,098  284 
Total lease costs $77,951  $60,555  $38,642 
(1)Included as a component of “Depreciation, depletion and amortization” in the consolidated statements of operations.
(2)Included as a component of “Interest expense” in the consolidated statements of operations.
(3)For the years ended December 31, 2023, 2022 and 2021, approximately $42.1 million, $33.3 million and $23.0 million, respectively, are costs associated with drilling rigs. These costs were capitalized to “Proved properties, net” in the consolidated balance sheets and the other remaining operating lease costs were components of “General and administrative” and “Lease operating” in the consolidated statements of operations.
(4)Short-term lease cost primarily consists of drilling rigs with contract terms of less than one year.
(5)Variable lease costs include additional payments that were not included in the initial measurement of the lease liability and related ROU asset for lease agreements with terms greater than 12 months. Variable lease costs primarily consist of incremental usage associated with drilling rigs.
The table below presents supplemental balance sheet information for the Company’s operating leases including the line item in the consolidated balance sheets where each is presented. The Company’s financing leases are immaterial.
As of December 31,
2023 2022
(In thousands)
Leases
Operating leases:
Other assets, net - Operating lease ROU assets
 $59,268  $47,018 
Other current liabilities - Current operating lease liabilities
 $22,070  $40,809 
Other long-term liabilities - Long-term operating lease liabilities
 52,723  21,882 
Total operating lease liabilities $74,793  $62,691 
The table below presents the weighted average remaining lease terms and weighted average discounts rates for the Company’s leases as of December 31, 2023.
December 31, 2023
Weighted Average Remaining Lease Terms (In years)
Operating leases 7.9
Financing leases 0.2
Weighted Average Discount Rate
Operating leases 8.9  %
Financing leases 6.6  %
The table below presents the maturity of the Company’s lease liabilities as of December 31, 2023.
Operating Leases Financing Leases
(In thousands)
2024 $27,207  $38 
2025 8,066  — 
2026 9,439  — 
2027 9,526  — 
2028 9,645  — 
Thereafter 42,528  — 
   Total lease payments 106,411  38 
Less imputed interest (31,618) — 
   Total lease liabilities $74,793  $38 
Leases Leases
The Company currently has leases associated with contracts for office space, drilling rigs, and the use of well equipment, vehicles, information technology infrastructure, and other office equipment. The tables below, which present the components of lease costs and
supplemental balance sheet information, are presented on a gross basis. Other joint owners in the properties operated by the Company generally pay for their working interest share of costs associated with drilling rigs and well equipment.
The table below presents the components of the Company’s lease costs for the year ended December 31, 2023.
Years Ended December 31,
2023 2022 2021
(In thousands)
Components of Lease Costs
Finance lease costs $262  $228  $277 
Amortization of right-of-use assets (1)
251  203  237 
Interest on lease liabilities (2)
11  25  40 
Operating lease cost (3)
49,502  38,803  37,734 
Short-term lease cost (4)
24,860  19,426  347 
Variable lease costs (5)
3,327  2,098  284 
Total lease costs $77,951  $60,555  $38,642 
(1)Included as a component of “Depreciation, depletion and amortization” in the consolidated statements of operations.
(2)Included as a component of “Interest expense” in the consolidated statements of operations.
(3)For the years ended December 31, 2023, 2022 and 2021, approximately $42.1 million, $33.3 million and $23.0 million, respectively, are costs associated with drilling rigs. These costs were capitalized to “Proved properties, net” in the consolidated balance sheets and the other remaining operating lease costs were components of “General and administrative” and “Lease operating” in the consolidated statements of operations.
(4)Short-term lease cost primarily consists of drilling rigs with contract terms of less than one year.
(5)Variable lease costs include additional payments that were not included in the initial measurement of the lease liability and related ROU asset for lease agreements with terms greater than 12 months. Variable lease costs primarily consist of incremental usage associated with drilling rigs.
The table below presents supplemental balance sheet information for the Company’s operating leases including the line item in the consolidated balance sheets where each is presented. The Company’s financing leases are immaterial.
As of December 31,
2023 2022
(In thousands)
Leases
Operating leases:
Other assets, net - Operating lease ROU assets
 $59,268  $47,018 
Other current liabilities - Current operating lease liabilities
 $22,070  $40,809 
Other long-term liabilities - Long-term operating lease liabilities
 52,723  21,882 
Total operating lease liabilities $74,793  $62,691 
The table below presents the weighted average remaining lease terms and weighted average discounts rates for the Company’s leases as of December 31, 2023.
December 31, 2023
Weighted Average Remaining Lease Terms (In years)
Operating leases 7.9
Financing leases 0.2
Weighted Average Discount Rate
Operating leases 8.9  %
Financing leases 6.6  %
The table below presents the maturity of the Company’s lease liabilities as of December 31, 2023.
Operating Leases Financing Leases
(In thousands)
2024 $27,207  $38 
2025 8,066  — 
2026 9,439  — 
2027 9,526  — 
2028 9,645  — 
Thereafter 42,528  — 
   Total lease payments 106,411  38 
Less imputed interest (31,618) — 
   Total lease liabilities $74,793  $38