Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

(6) Leases

The majority of our leases are for the following types of assets:

•Office space. Our primary offices are in Dallas, Houston, and Midland, with smaller offices in other locations near our assets. Our office leases are long-term in nature and represented $40.4 million of our lease liability and $20.7 million of our right-of-use asset as of December 31, 2023. Our office leases represented $46.2 million of our lease liability and $24.2 million of our right-of-use asset as of December 31, 2022. These office leases typically include variable lease costs related to utility expenses, which are determined based on our pro-rata share of the building expenses each month and expensed as incurred.

•Compression and other field equipment. We pay third parties to provide compressors or other field equipment for our assets. Under these agreements, a third party installs and operates compressor units based on specifications set by us to meet our compression needs at specific locations. While the third party determines which compressors to install and operates and maintains the units, we have the right to control the use of the compressors and are the sole economic beneficiary of the identified assets. These agreements are typically for an initial term of one to three years but will automatically renew month to month until canceled by us or the lessor. Compression and other field equipment rentals represented $41.7 million of our lease liability and $42.5 million of our right-of-use asset as of December 31, 2023. Compression and other field equipment rentals represented $30.6 million of our lease liability and $33.0 million of our

right-of-use asset as of December 31, 2022. Under certain agreements, we may incur variable lease costs related to incidental services provided by the equipment lessor, which are expensed as incurred.

•Land and land easements. We make periodic payments to lease land or to have access to our assets. Land leases and easements are typically long-term to match the expected useful life of the corresponding asset and represented $15.7 million of our lease liability and $12.4 million of our right-of-use asset as of December 31, 2023. Land and land easement leases represented $15.6 million of our lease liability and $12.3 million of our right-of-use asset as of December 31, 2022.

Lease balances are recorded on the consolidated balance sheets as follows (in millions):

Operating leases:	December 31, 2023			December 31, 2022
Other assets, net	$	75.6		$	69.5
Other current liabilities	$	28.2		$	26.2
Other long-term liabilities	$	69.6		$	66.2
Other lease information
Weighted-average remaining lease term—Operating leases	7.7 years			8.7 years
Weighted-average discount rate—Operating leases	5.3		%	4.7		%

Certain of our lease agreements have options to extend the lease for a certain period after the expiration of the initial term. We recognize the cost of a lease over the expected total term of the lease, including optional renewal periods that we can reasonably expect to exercise. We do not have material obligations whereby we guarantee a residual value on assets we lease, nor do our lease agreements impose restrictions or covenants that could affect our ability to make distributions.

Lease expense is recognized on the consolidated statements of operations as “Operating expenses” and “General and administrative” depending on the nature of the leased asset. Impairments of right-of-use assets are recognized in “Impairments” on the consolidated statements of operations. Sublease income is recognized as a reduction in “General and administrative,” “Operating expenses,” or as “Other income” depending on the nature of the subleased asset. The components of total lease expense are as follows (in millions):

	Year Ended December 31,
	2023		2022		2021
Operating lease expense:
Long-term operating lease expense	$	34.6	$	28.2	$	21.7
Short-term lease expense	41.3		34.3		17.5
Variable lease expense	18.6		18.8		15.6
Impairments	—		—		0.2
Total lease expense, before sublease income	94.5		81.3		55.0
Sublease income	(1.8)		(1.1)		—
Total lease expense, net of sublease income	$	92.7	$	80.2	$	55.0

Lease Maturities

The following table summarizes the maturity of our lease liability as of December 31, 2023 (in millions):

	Total		2024		2025		2026		2027		2028		Thereafter
Undiscounted operating lease liability	$	123.8	$	31.8	$	24.4	$	15.2	$	9.1	$	8.7	$	34.6
Reduction due to present value	(26.0)		(4.3)		(3.2)		(2.3)		(1.8)		(1.4)		(13.0)
Operating lease liability	$	97.8	$	27.5	$	21.2	$	12.9	$	7.3	$	7.3	$	21.6

Leases

(6) Leases

The majority of our leases are for the following types of assets:

•Office space. Our primary offices are in Dallas, Houston, and Midland, with smaller offices in other locations near our assets. Our office leases are long-term in nature and represented $40.4 million of our lease liability and $20.7 million of our right-of-use asset as of December 31, 2023. Our office leases represented $46.2 million of our lease liability and $24.2 million of our right-of-use asset as of December 31, 2022. These office leases typically include variable lease costs related to utility expenses, which are determined based on our pro-rata share of the building expenses each month and expensed as incurred.

•Compression and other field equipment. We pay third parties to provide compressors or other field equipment for our assets. Under these agreements, a third party installs and operates compressor units based on specifications set by us to meet our compression needs at specific locations. While the third party determines which compressors to install and operates and maintains the units, we have the right to control the use of the compressors and are the sole economic beneficiary of the identified assets. These agreements are typically for an initial term of one to three years but will automatically renew month to month until canceled by us or the lessor. Compression and other field equipment rentals represented $41.7 million of our lease liability and $42.5 million of our right-of-use asset as of December 31, 2023. Compression and other field equipment rentals represented $30.6 million of our lease liability and $33.0 million of our

right-of-use asset as of December 31, 2022. Under certain agreements, we may incur variable lease costs related to incidental services provided by the equipment lessor, which are expensed as incurred.

•Land and land easements. We make periodic payments to lease land or to have access to our assets. Land leases and easements are typically long-term to match the expected useful life of the corresponding asset and represented $15.7 million of our lease liability and $12.4 million of our right-of-use asset as of December 31, 2023. Land and land easement leases represented $15.6 million of our lease liability and $12.3 million of our right-of-use asset as of December 31, 2022.

Lease balances are recorded on the consolidated balance sheets as follows (in millions):

Operating leases:	December 31, 2023			December 31, 2022
Other assets, net	$	75.6		$	69.5
Other current liabilities	$	28.2		$	26.2
Other long-term liabilities	$	69.6		$	66.2
Other lease information
Weighted-average remaining lease term—Operating leases	7.7 years			8.7 years
Weighted-average discount rate—Operating leases	5.3		%	4.7		%

Certain of our lease agreements have options to extend the lease for a certain period after the expiration of the initial term. We recognize the cost of a lease over the expected total term of the lease, including optional renewal periods that we can reasonably expect to exercise. We do not have material obligations whereby we guarantee a residual value on assets we lease, nor do our lease agreements impose restrictions or covenants that could affect our ability to make distributions.

Lease expense is recognized on the consolidated statements of operations as “Operating expenses” and “General and administrative” depending on the nature of the leased asset. Impairments of right-of-use assets are recognized in “Impairments” on the consolidated statements of operations. Sublease income is recognized as a reduction in “General and administrative,” “Operating expenses,” or as “Other income” depending on the nature of the subleased asset. The components of total lease expense are as follows (in millions):

	Year Ended December 31,
	2023		2022		2021
Operating lease expense:
Long-term operating lease expense	$	34.6	$	28.2	$	21.7
Short-term lease expense	41.3		34.3		17.5
Variable lease expense	18.6		18.8		15.6
Impairments	—		—		0.2
Total lease expense, before sublease income	94.5		81.3		55.0
Sublease income	(1.8)		(1.1)		—
Total lease expense, net of sublease income	$	92.7	$	80.2	$	55.0

Lease Maturities

The following table summarizes the maturity of our lease liability as of December 31, 2023 (in millions):

	Total		2024		2025		2026		2027		2028		Thereafter
Undiscounted operating lease liability	$	123.8	$	31.8	$	24.4	$	15.2	$	9.1	$	8.7	$	34.6
Reduction due to present value	(26.0)		(4.3)		(3.2)		(2.3)		(1.8)		(1.4)		(13.0)
Operating lease liability	$	97.8	$	27.5	$	21.2	$	12.9	$	7.3	$	7.3	$	21.6