Annual report pursuant to Section 13 and 15(d)

Leases

v3.20.4
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases Leases
We generally have lease arrangements for office facilities and certain office equipment, certain field equipment including compressors, drilling rigs, crude oil storage tank capacity, land easements and similar arrangements for rights-of-way, and certain gas gathering and gas lift assets. Our short-term leases included in the disclosures below are primarily comprised of our contractual arrangements with certain vendors for operated drilling rigs, crude oil storage tank capacity and our field compressors. Our primary variable lease was represented by our field gas gathering and gas lift agreement with a midstream service provider and the lease payments are charged on a volumetric basis at a contractual fixed rate.
The following table summarizes the components of our total lease cost, as determined in accordance with ASC Topic 842, for the periods presented:
Year Ended December 31,
2020 2019
Operating lease cost $ 979  $ 773 
Short-term lease cost 23,721  36,202 
Variable lease cost 21,932  23,762 
Less: Amounts charged as drilling costs 1
(20,708) (33,354)
Total lease cost recognized in the Consolidated Statement of Operations 2
$ 25,924  $ 27,383 
___________________
1    Represents the combined gross amounts paid and (i) capitalized as drilling costs for our working interest share and (ii) billed to joint interest partners for their working interest share for short-term leases of operated drilling rigs.
2    Includes $11.2 million and $12.1 million recognized in GPT, $13.8 million and $14.5 million recognized in Lease operating expense (“LOE”) and $1.0 million and $0.8 million recognized in G&A for the years ended December 31, 2020 and 2019, respectively.
    Operating lease rental expense, as determined in accordance with prior GAAP was $2.7 million for the year ended December 31, 2018, related primarily to field equipment, office equipment and office leases. The substantial difference between operating lease rental expense disclosed in accordance with prior GAAP and that provided in the table above for 2020 and 2019, in accordance with ASC Topic 842, is attributable to the aforementioned field gas gathering and gas lift agreement which has been determined to be a variable lease under ASC Topic 842.
The following table summarizes supplemental cash flow information, as determined in accordance with ASC Topic 842, related to leases for the periods presented:
Year Ended December 31,
2020 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 943  $ 659 
ROU assets obtained in exchange for operating lease obligations 1
$ 388  $ 3,325 
___________________
1    Includes $2.5 million recognized upon adoption of ASC Topic 842 and $0.8 million obtained during the twelve months ended December 31, 2019.
The following table summarizes supplemental balance sheet information related to leases as of the dates presented:
December 31,
2020 2019
ROU assets – operating leases $ 2,432  $ 2,740 
Current operating lease obligations $ 936  $ 847 
Noncurrent operating lease obligations 1,752  2,232 
Total operating lease obligations $ 2,688  $ 3,079 
Weighted-average remaining lease term – operating leases 3.1 years 4.1 years
Weighted-average discount rate – operating leases 3.24  % 5.97  %
Maturities of operating lease obligations for the years ending December 31,
2021 $ 936 
2022 874 
2023 872 
2024 146 
Total undiscounted lease payments 2,828 
Less: imputed interest (140)
Total operating lease obligations $ 2,688