Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

We 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,
	2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	7,307	$	5,516
Interest expense	1,110		628
Operating lease cost	6,123		6,564
Short-term lease cost	4,175		1,515
Sublease income	(396)		(353)
Total lease cost	$	18,319	$	13,870

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

	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1,110	$	628
Operating cash flows from operating leases	6,143		6,524
Financing cash flows from finance leases	7,652		6,055
Total	$	14,905	$	13,207
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	6,361	$	6,565
Finance leases	11,159		7,941
Total	$	17,520	$	14,506

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023:

	Operating		Finance
2024	$	5,133	$	8,529
2025	4,709		5,615
2026	4,041		4,931
2027	3,666		60
2028	3,251		—
Thereafter	5,941		—
Total undiscounted lease payments	26,741		19,135
Less: effects of discounting	(3,400)		(2,503)
Present value of lease payments	$	23,341	$	16,632

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

	Year Ended December 31,
	2023		2022
Weighted average remaining lease term:
Finance leases	1.9	years	2.0	years
Operating leases	6.1	years	6.5	years
Weighted average discount rate
Finance leases	16.28	%	11.97	%
Operating leases	3.59	%	2.96	%

As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically one to three 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 9 for disaggregation of revenue.

Leases

Leases

We 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,
	2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	7,307	$	5,516
Interest expense	1,110		628
Operating lease cost	6,123		6,564
Short-term lease cost	4,175		1,515
Sublease income	(396)		(353)
Total lease cost	$	18,319	$	13,870

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

	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1,110	$	628
Operating cash flows from operating leases	6,143		6,524
Financing cash flows from finance leases	7,652		6,055
Total	$	14,905	$	13,207
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	6,361	$	6,565
Finance leases	11,159		7,941
Total	$	17,520	$	14,506

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023:

	Operating		Finance
2024	$	5,133	$	8,529
2025	4,709		5,615
2026	4,041		4,931
2027	3,666		60
2028	3,251		—
Thereafter	5,941		—
Total undiscounted lease payments	26,741		19,135
Less: effects of discounting	(3,400)		(2,503)
Present value of lease payments	$	23,341	$	16,632

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

	Year Ended December 31,
	2023		2022
Weighted average remaining lease term:
Finance leases	1.9	years	2.0	years
Operating leases	6.1	years	6.5	years
Weighted average discount rate
Finance leases	16.28	%	11.97	%
Operating leases	3.59	%	2.96	%

As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically one to three 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 9 for disaggregation of revenue.

Leases

Leases

We 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,
	2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	7,307	$	5,516
Interest expense	1,110		628
Operating lease cost	6,123		6,564
Short-term lease cost	4,175		1,515
Sublease income	(396)		(353)
Total lease cost	$	18,319	$	13,870

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

	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	1,110	$	628
Operating cash flows from operating leases	6,143		6,524
Financing cash flows from finance leases	7,652		6,055
Total	$	14,905	$	13,207
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	6,361	$	6,565
Finance leases	11,159		7,941
Total	$	17,520	$	14,506

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023:

	Operating		Finance
2024	$	5,133	$	8,529
2025	4,709		5,615
2026	4,041		4,931
2027	3,666		60
2028	3,251		—
Thereafter	5,941		—
Total undiscounted lease payments	26,741		19,135
Less: effects of discounting	(3,400)		(2,503)
Present value of lease payments	$	23,341	$	16,632

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

	Year Ended December 31,
	2023		2022
Weighted average remaining lease term:
Finance leases	1.9	years	2.0	years
Operating leases	6.1	years	6.5	years
Weighted average discount rate
Finance leases	16.28	%	11.97	%
Operating leases	3.59	%	2.96	%

As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically one to three 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 9 for disaggregation of revenue.