Leases

3 Months Ended

Mar. 31, 2022

4. Leases

We have operating leases expiring at various dates, principally for office space, onshore storage yards and certain operating equipment. Additionally, we sublease certain office space to third parties. We determine if an arrangement is a lease at inception. Operating leases with an initial term greater than 12 months are included in “Operating lease ROU assets”, “Other current liabilities”, and “Other long-term liabilities” on our Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made prior to or at the commencement date and is reduced by lease incentives received and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally not accounted for separately. Certain of our leases include provisions for variable payments. These variable payments are not included in the calculation of lease liability and ROU assets.

The components of lease expense were as follows:


		Three Months Ended March 31,
(unaudited, in thousands)	Classification in the Consolidated Statement of Operations	2022			2021
Operating lease cost(1)	Operating costs	$	255		$	902
Operating lease cost(1)	General and administrative		284			152
Sublease income	Operating costs		—			(121	)
Sublease income	General and administrative		(183	)		(62	)
Total operating lease cost		$	356		$	871

(1) Short-term lease costs were approximately $0.1 million and $0.3 million during the three months ended March 31, 2022 and 2021, respectively. Operating cash flows used for operating leases approximates lease expense.


(unaudited, in thousands)	Classification in the Consolidated Balance Sheets	March 31, 2022		December 31, 2021
Assets:
Operating lease assets	Operating lease ROU assets	$	2,049	$	2,450
	Operating lease ROU assets - Held for sale		205		197
Total leased assets		$	2,254	$	2,647
Liabilities:
Current operating	Other current liabilities	$	1,580	$	1,710
	Other current liabilities - Held for sale		150		103
Noncurrent operating	Other long-term liabilities		644		969
	Other long-term liabilities - Held for sale		66		93
Total lease liabilities		$	2,440	$	2,875

As of March 31, 2022, maturities of lease liabilities were as follows:


(unaudited, in thousands)	Operating Leases
Remaining nine months of 2022	$	1,491
2023		1,096
2024		—
2025		—
2026		—
Total future lease payments	$	2,587
Less imputed interest		(147	)
Present value of lease obligations	$	2,440

The weighted average discount rate was 9.25% as of both March 31, 2022 and December 31, 2021. The weighted average remaining lease term for operating leases was 1.35 years and 1.56 years as of March 31, 2022 and December 31, 2021, respectively. ROU assets and lease liabilities recorded for leases commencing during the three months ended March 31, 2022 was immaterial.