Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Leases

The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. Lease assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. The Company recognizes right-of-use assets and current and non-current lease liabilities on the balance sheet for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one year or less are not capitalized. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Capitalized operating leases are included in other assets, other current liabilities and other long-term obligations, and finance leases are included in other property, plant and equipment, other current liabilities and other long-term obligations on the accompanying consolidated balance sheet as of December 31, 2024 and 2023.

The Company had operating and financing leases for vehicles, office space and equipment outstanding during the year ended December 31, 2024, 2023 and 2022 which were not significant to the consolidated financial statements.

The components of lease costs recognized for the Company's right-of-use leases are shown below (in thousands):

	Year Ended December 31, 2024		Year Ended December 31, 2023		Year Ended December 31, 2022
Short-term lease cost (1)	$	1,815	$	3,139	$	4,208
Financing lease cost	904		874		673
Operating lease cost	167		167		161
Total lease cost	$	2,886	$	4,180	$	5,042

___________________

(1)During the year ended December 31, 2024, there were no short-term lease costs capitalized associated with drilling rig leases. During the year ended December 31, 2023, there were $1.6 million in short-term lease costs capitalized associated with our drilling rig lease. During the year ended December 31, 2022, there were $3.3 million in short-term lease costs capitalized associated with our drilling rig lease. Portions of these costs were reimbursed to the Company by other working interest owners.

Leases

Leases

The Company determines if an arrangement is or contains a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. As most of the Company's leases do not provide an implicit rate, the Company's incremental borrowing rate was used as the discount rate when determining the present value of future payments. Lease assets are recognized based on the lease liability plus any prepaid lease payments and excluding lease incentives and initial direct costs incurred for the same periods. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that option will be exercised. The Company recognizes right-of-use assets and current and non-current lease liabilities on the balance sheet for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one year or less are not capitalized. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Capitalized operating leases are included in other assets, other current liabilities and other long-term obligations, and finance leases are included in other property, plant and equipment, other current liabilities and other long-term obligations on the accompanying consolidated balance sheet as of December 31, 2024 and 2023.

The Company had operating and financing leases for vehicles, office space and equipment outstanding during the year ended December 31, 2024, 2023 and 2022 which were not significant to the consolidated financial statements.

The components of lease costs recognized for the Company's right-of-use leases are shown below (in thousands):

	Year Ended December 31, 2024		Year Ended December 31, 2023		Year Ended December 31, 2022
Short-term lease cost (1)	$	1,815	$	3,139	$	4,208
Financing lease cost	904		874		673
Operating lease cost	167		167		161
Total lease cost	$	2,886	$	4,180	$	5,042

___________________

(1)During the year ended December 31, 2024, there were no short-term lease costs capitalized associated with drilling rig leases. During the year ended December 31, 2023, there were $1.6 million in short-term lease costs capitalized associated with our drilling rig lease. During the year ended December 31, 2022, there were $3.3 million in short-term lease costs capitalized associated with our drilling rig lease. Portions of these costs were reimbursed to the Company by other working interest owners.