We are the subject of, or party to, a number of pending or threatened legal actions and administrative proceedings or investigations arising in the ordinary course of our business including, but not limited to, royalty claims, contract claims and environmental claims. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations.

When deemed necessary, we establish reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible we could incur additional losses with respect to those matters in which reserves have been established. We will continue to evaluate our litigation on a quarterly basis and will establish and adjust any litigation reserves as appropriate to reflect our assessment of the then current status of litigation.

We have incurred and will continue to incur capital, operating and remediation expenditures as a result of environmental laws and regulations. As of December 31, 2023 and 2022, liabilities for remediation were not material. We are not aware of any environmental claims existing as of December 31, 2023 that have not been provided for or would otherwise have a material impact on our financial position or results of operations. Environmental liabilities normally involve estimates that are subject to revision until final resolution, settlement or remediation occurs. We believe that substantially all of our competitors must comply with similar environmental laws and regulations.

Certain contractual obligations were retained by us after our divestiture of our North Louisiana assets in 2020. These obligations are primarily related to gathering, processing and transportation agreements including certain minimum volume commitments. For additional information see Note 14.

The components of our total lease expense for the two years ended December 31, 2023, the majority of which is included as part of natural gas and oil properties on our consolidated balance sheets, are as follows (in thousands):


	Year Ended December 31,
	2023		2022
Operating lease cost	$	70,781	$	37,873
Variable lease expense (1)		25,529		22,082
Short-term lease expense (2)		708		1,807
Sublease income		—		(137	)
Total lease expense	$	97,018	$	61,625

Short-term lease costs (3)	$	14,032	$	17,285


(1)	Variable lease payments that are not dependent on an index or rate and are not included in the lease liability or ROU assets.
(2)	Short-term lease expense represents expense related to leases with a contract term of one year or less and are not included in our ROU assets or lease liability in our consolidated balance sheets.


(3)	These short-term lease costs are related to leases with a contract term of one year or less, the majority of which are related to drilling rigs which are capitalized as part of natural gas and oil properties on our consolidated balance sheets and may fluctuate based on the number of drilling rigs being utilized.

Supplemental cash flow information related to our operating leases is included in the table below (in thousands):


	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	71,669	$	37,457
ROU assets added in exchange for lease obligations	$	7,421	$	78,574

Supplemental balance sheet information related to our operating leases is included in the table below (in thousands):


	Year Ended December 31,
	2023			2022
Operating lease ROU assets	$	23,821		$	84,070
Accrued liabilities – current	$	(11,584	)	$	(67,493	)
Operating lease liabilities – long-term	$	(16,064	)	$	(20,903	)

Our weighted average remaining lease term and weighted average discount rate for our operating leases are as follows:


	Year Ended December 31,
	2023	2022
Weighted average remaining lease term	2.9 years	2.0 years
Weighted average discount rate	7%	6%

Our lease liabilities with enforceable contract terms that are greater than one year mature as follows (in thousands):


	Operating Leases
2024	$	13,119
2025		7,921
2026		6,866
2027		2,698
2028		29
Total lease payments		30,633
Less effects of discounting		(2,985	)
Total lease liability	$	27,648

In late 2023, we entered into two-year commitments for drilling and completions equipment with gross lease payments of approximately $152.0 million. These leases are effective January 1, 2024 and will be recognized on our balance sheet as a lease in 2024.

We have entered into firm transportation and gathering contracts with various pipeline carriers for the future transportation and gathering of natural gas, NGLs and oil production from our properties in Pennsylvania. Under these contracts, we are obligated to transport or gather minimum daily natural gas volumes or pay for any deficiencies at a specified reservation fee rate. Our production committed to these pipelines is currently expected to exceed the minimum daily volumes provided in the contracts. However, if in the future we fail to deliver the committed volumes, we would recognize a deficiency payment in the period in which the under-delivery takes place and the related liability has been incurred. As of December 31, 2023, future minimum transportation and gathering fees under our commitments are as follows (in thousands):


	Transportation and Gathering Contracts (a)
2024	$	801,694
2025		730,907
2026		670,692
2027		616,260
2028		565,707


Thereafter		2,504,906
	$	5,890,166


(a)	The amounts in this table represent the gross amounts that we are committed to pay; however, we will record in our financial statements our proportionate share of costs based on our working interest which can vary based on volumes produced.

In addition to the amounts included in the above table, we have entered into an additional agreement which modifies existing contracts that are included in the table above but are contingent on additional facility construction. This agreement is expected to begin in 2024 with a twelve-year term and adds to our ability to efficiently flow production volumes. The revised agreement covers 650,000 mcf per day but declines in the last five years of the contract ending at 300,000 mcf per day.

Not included in the table above is our estimate of accrued contractual obligations retained by us after our divestiture of our North Louisiana assets. These contractual obligations are related to gathering, processing and transportation agreements including certain minimum volume commitments. There are inherent uncertainties surrounding the retained obligation and, as a result, the determination of the accrued obligation required significant judgment and estimation. The actual settlement amount and timing may differ from our estimates. See also Note 14 for more information. As of December 31, 2023, the carrying value of this obligation was $397.4 million and is included in divestiture contract obligation in our consolidated balance sheets. As of December 31, 2023, our estimated settlement of this retained obligation based on a discounted value is as follows (in thousands):


	Divestiture Contract Obligation
2024	$	86,762
2025		77,418
2026		61,805
2027		52,622
2028		48,116
Thereafter		70,727
	$	397,450

We have various volume delivery commitments that are related to our Marcellus Shale properties. We expect to be able to fulfill our contractual obligations from our own production; however, we may purchase third-party volumes to satisfy our commitments or pay demand fees for commitment shortfalls, should they occur. As of December 31, 2023, our delivery commitments through 2037 were as follows:


Year Ending December 31,	Natural Gas (mmbtu per day)	Ethane and Propane (bbls per day)
2024	302,404	70,000
2025	282,493	54,932
2026	200,548	50,000
2027	100,000	46,233
2028	100,000	45,000
2029	100,000	33,444
2030	—	30,000
2031	—	16,575
2032-2037	—	10,000 (each year)