LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

3. LEASES

The Company leases equipment and office space pursuant to operating leases. The Company determines if an arrangement is or contains a lease at inception and combines lease and nonlease components, when fixed, for all lease contracts. Nonlease components include common area maintenance charges on office leases and, when applicable, services associated with equipment leases. Operating leases with a lease term greater than 12 months where the Company is the lessee are included in “Operating lease right of use assets” and “Operating lease liabilities” on the consolidated balance sheets and recorded based on the present value of the future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. The Company does not recognize right of use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, but rather recognizes the lease payments associated with its short-term leases when incurred.

Payments due under the lease contracts include fixed payments plus, in some instances, variable payments. Variable lease payments, if applicable, associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments, when applicable, are presented as “Gathering and other” or “General and administrative” in the consolidated statements of operations in the same line item as the expense arising from the fixed lease payments on the operating leases.

The “Operating lease right of use assets” outstanding on the consolidated balance sheet as of December 31, 2023 have initial lease terms of 1.9 years and 2.7 years and the “Operating lease right of use assets” as of December 31, 2022 have initial lease terms of 2.3 years. The table below summarizes the Company’s leases for the periods indicated (in thousands, except years and discount rate):

	Years Ended December 31,
	2023			2022
Lease cost
Operating lease costs	$	601		$	391
Short-term lease costs		2,536			7,972
Total lease costs	$	3,137		$	8,363
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	604		$	391
Weighted-average remaining lease term - operating leases		1.8	years		0.9	years
Weighted-average discount rate - operating leases		12.32	%		4.29	%

Future minimum lease payments associated with the Company’s non-cancellable operating leases for office space and equipment as of December 31, 2023, are presented in the table below (in thousands):

	December 31, 2023
2024	$	688
2025		430
2026		86
Total operating lease payments		1,204
Less: discount to present value		(120)
Total operating lease liabilities		1,084
Less: current operating lease liabilities		594
Noncurrent operating lease liabilities	$	490