Leases

3 Months Ended

Mar. 31, 2019

Our operating lease activities consist of leases for office space. Our finance lease activities consist of leases for vehicles. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Most leases include one or more options to renew, with renewal terms generally ranging from one to three years. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. None of our lease agreements include variable lease payments. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. See discussion of the January 1, 2019 implementation impact at Note 1. Basis of Presentation and Summary of Significant Accounting Policies.

Supplemental balance sheet information as of March 31, 2019 for our leases is as follows (in thousands):



Leases	Classification
Assets
Noncurrent:
Operating	Operating lease right-of-use assets	$	1,049
Finance	Office and other equipment, net of accumulated depreciation and amortization	752
Total lease assets		$	1,801

Liabilities
Current:
Operating	Operating lease liabilities	$	658
Finance	Finance lease liabilities	354
Noncurrent:
Operating	Operating lease liabilities	442
Finance	Finance lease liabilities	193
Total lease liabilities		$	1,647

*The difference between assets and liabilities includes a $0.1 million adjustment to NCI and a $0.07 million adjustment to accumulated deficit, both at the beginning of the period as part of the ASC 842 implementation adjustment.

Our operating lease expense for the three months ended March 31, 2019 was $0.2 million and is included in General and administrative expense in our Condensed Consolidated Statements of Operations. Our finance lease expense for the three months ended March 31, 2019 was $0.1 million and is included in depreciation, depletion and amortization expense and interest expense, net in our Condensed Consolidated Statements of Operations. Additionally, we capitalized as part of oil and gas properties $2.1 million of short-term lease costs related to drilling rig contracts. All of our drilling rig contracts have enforceable terms of less than one year.

Minimum contractual obligations for our leases (undiscounted) as of March 31, 2019 are as follows (in thousands):



	Operating			Finance
2019 (excluding three months ended March 31, 2019	$	619		$	295
2020	206			219
2021	215			65
2022	110			—
2023	—			—
Thereafter	—			—
Total lease payments	$	1,150		$	579
Less imputed interest	(50		)	(32		)
Total lease liability	$	1,100		$	547

Cash paid for our operating and finance leases were $0.2 million and $0.1 million, respectively, for the three months ended March 31, 2019. Right-of-use assets obtained in exchange for lease obligations for our operating leases were $0.6 million for the three months ended March 31, 2019. The amount related to our finance leases was not material to our consolidated financial statements.

As of March 31, 2019, the weighted average remaining lease terms of our operating and finance leases were 1.9 years and 1.8 years, respectively. The weighted average discount rates used to determine the lease liabilities as of March 31, 2019 for our operating and finance leases were 4.35% and 6.57%, respectively. The discount rate used for operating leases is based on the Company's incremental borrowing rate. The discount rate used for finance leases is based on the rates implicit in the leases.

Leases

Supplemental balance sheet information as of March 31, 2019 for our leases is as follows (in thousands):



Leases	Classification
Assets
Noncurrent:
Operating	Operating lease right-of-use assets	$	1,049
Finance	Office and other equipment, net of accumulated depreciation and amortization	752
Total lease assets		$	1,801

Liabilities
Current:
Operating	Operating lease liabilities	$	658
Finance	Finance lease liabilities	354
Noncurrent:
Operating	Operating lease liabilities	442
Finance	Finance lease liabilities	193
Total lease liabilities		$	1,647

Minimum contractual obligations for our leases (undiscounted) as of March 31, 2019 are as follows (in thousands):



	Operating			Finance
2019 (excluding three months ended March 31, 2019	$	619		$	295
2020	206			219
2021	215			65
2022	110			—
2023	—			—
Thereafter	—			—
Total lease payments	$	1,150		$	579
Less imputed interest	(50		)	(32		)
Total lease liability	$	1,100		$	547