Leases

As a drilling and production services provider, we provide the drilling rigs and production services equipment which are necessary to fulfill our performance obligations and which are considered leases under ASU No. 2016-02, Leases, (together with its amendments, herein referred to as “ASC Topic 842”). However, ASU No. 2018-11, Leases: Targeted Improvements, allows lessors to (i) combine the lease and non-lease components of revenues when the revenue recognition pattern is the same and when the lease component, when accounted for separately, would be considered an operating lease, and (ii) account for the combined lease and non-lease components under ASC Topic 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component. We elected to apply this expedient and therefore recognize our revenues (both lease and service components) under ASC Topic 606, and present them as one revenue stream in our unaudited condensed consolidated statements of operations.

As a lessee, we lease our corporate office headquarters in San Antonio, Texas, and we conduct our business operations through 19 other regional offices located throughout the United States and internationally in Colombia. These operating locations typically include regional offices, storage and maintenance yards and employee housing sufficient to support our operations in the area. We lease most of these properties under non-cancelable term and month-to-month operating leases, many of which contain renewal options that can extend the lease term from three months to five years and some of which contain escalation clauses. We also lease various items of supplemental equipment, typically under cancelable short-term and very short term (less than 30 days) leases. Due to the nature of our business, any option to renew these short-term leases, and the options to extend certain of our long-term real estate leases, are generally not considered reasonably certain to be exercised. Therefore, the periods covered by such optional periods are not included in the determination of the term of the lease, and the lease payments during these periods are similarly excluded from the calculation of operating lease asset and lease liability balances.

The following table summarizes our lease expense recognized, excluding variable lease costs (amounts in thousands):



	Three months ended March 31,
	2020		2019
Long-term operating lease expense	$	662	$	842
Short-term operating lease expense	3,526		3,403

The following table summarizes the amount and timing of our obligations associated with our long-term operating leases (amounts in thousands):



	March 31, 2020			December 31, 2019
Within 1 year	$	2,413		$	2,496
In the second year	1,966			1,933
In the third year	1,592			1,447
In the fourth year	1,259			1,117
In the fifth year	1,176			912
Thereafter	1,079			811
Total undiscounted lease obligations	$	9,485		$	8,716
Impact of discounting	(967		)	(818		)
Discounted value of operating lease obligations	$	8,518		7,898

Current operating lease liabilities	$	2,084		2,198
Noncurrent operating lease liabilities	6,434			5,700
	$	8,518		7,898

During the three months ended March 31, 2020, leased assets obtained in exchange for new operating lease liabilities totaled approximately $1.7 million.