Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

LeasesWe lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The following are the components of operating and finance lease costs:

	Year Ended December 31,
	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	5,516	$	4,906
Interest expense	628		520
Operating lease cost	6,564		6,638
Short-term lease cost	1,515		1,894
Sublease income	(353)		(265)
Total lease cost	$	13,870	$	13,693

The following is supplemental cash flow information for our operating and finance leases:

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	628	$	520
Operating cash flows from operating leases	6,524		5,398
Financing cash flows from finance leases	6,055		5,205
Total	$	13,207	$	11,123
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	6,565	$	5,342
Finance leases	7,941		9,941
Total	$	14,506	$	15,283

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2022:

	Operating		Finance
2023	$	5,431	$	6,442
2024	4,420		4,963
2025	3,458		2,117
2026	2,711		111
2027	2,640		—
Thereafter	7,410		—
Total undiscounted lease payments	26,070		13,633
Less: effects of discounting	(2,918)		(1,264)
Present value of lease payments	$	23,152	$	12,369

The following represents the average lease terms and discount rates for our operating and finance leases:

	Year Ended December 31,
	2022		2021
Weighted average remaining lease term:
Finance leases	2.0	years	2.1	years
Operating leases	6.5	years	5.8	years
Weighted average discount rate
Finance leases	11.97	%	8.58	%
Operating leases	2.96	%	3.01	%

As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 7 for disaggregation of revenue.

Leases

LeasesWe lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The following are the components of operating and finance lease costs:

	Year Ended December 31,
	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	5,516	$	4,906
Interest expense	628		520
Operating lease cost	6,564		6,638
Short-term lease cost	1,515		1,894
Sublease income	(353)		(265)
Total lease cost	$	13,870	$	13,693

The following is supplemental cash flow information for our operating and finance leases:

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	628	$	520
Operating cash flows from operating leases	6,524		5,398
Financing cash flows from finance leases	6,055		5,205
Total	$	13,207	$	11,123
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	6,565	$	5,342
Finance leases	7,941		9,941
Total	$	14,506	$	15,283

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2022:

	Operating		Finance
2023	$	5,431	$	6,442
2024	4,420		4,963
2025	3,458		2,117
2026	2,711		111
2027	2,640		—
Thereafter	7,410		—
Total undiscounted lease payments	26,070		13,633
Less: effects of discounting	(2,918)		(1,264)
Present value of lease payments	$	23,152	$	12,369

The following represents the average lease terms and discount rates for our operating and finance leases:

	Year Ended December 31,
	2022		2021
Weighted average remaining lease term:
Finance leases	2.0	years	2.1	years
Operating leases	6.5	years	5.8	years
Weighted average discount rate
Finance leases	11.97	%	8.58	%
Operating leases	2.96	%	3.01	%

As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 7 for disaggregation of revenue.

Leases

LeasesWe lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The following are the components of operating and finance lease costs:

	Year Ended December 31,
	2022		2021
Finance lease cost:
Amortization of right-of-use assets	$	5,516	$	4,906
Interest expense	628		520
Operating lease cost	6,564		6,638
Short-term lease cost	1,515		1,894
Sublease income	(353)		(265)
Total lease cost	$	13,870	$	13,693

The following is supplemental cash flow information for our operating and finance leases:

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	628	$	520
Operating cash flows from operating leases	6,524		5,398
Financing cash flows from finance leases	6,055		5,205
Total	$	13,207	$	11,123
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	6,565	$	5,342
Finance leases	7,941		9,941
Total	$	14,506	$	15,283

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2022:

	Operating		Finance
2023	$	5,431	$	6,442
2024	4,420		4,963
2025	3,458		2,117
2026	2,711		111
2027	2,640		—
Thereafter	7,410		—
Total undiscounted lease payments	26,070		13,633
Less: effects of discounting	(2,918)		(1,264)
Present value of lease payments	$	23,152	$	12,369

The following represents the average lease terms and discount rates for our operating and finance leases:

	Year Ended December 31,
	2022		2021
Weighted average remaining lease term:
Finance leases	2.0	years	2.1	years
Operating leases	6.5	years	5.8	years
Weighted average discount rate
Finance leases	11.97	%	8.58	%
Operating leases	2.96	%	3.01	%

As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 7 for disaggregation of revenue.