Leases (Tables)

9 Months Ended

Sep. 30, 2019

Expenses related to finance and operating leases included in the Consolidated Financial Statements are as follows:



(Thousands of dollars)	Financial Statement Category	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease ^1,2	Lease operating expenses	$	62,260		178,164
Operating lease ²	Selling and general expense	2,700			9,044
Operating lease ²	Other operating expense	1,011			1,905
Operating lease ²	Property, plant and equipment	53,117			108,679
Operating lease ²	Asset retirement obligations	—			3,024
Finance lease
Amortization of asset	Depreciation, depletion and amortization	—			420
Interest on lease liabilities	Interest expense, net	—			202
Sublease income	Other income	(395		)	(1,034	)
Net lease expense		$	118,693		300,404

¹ For the three months and nine months ended September 30, 2019, includes variable lease expenses of $9.0 million and $22.8 million, respectively, primarily related to additional volumes processed at a gas processing plant.

² The three months ended September 30, 2019 includes $10.9 million for Lease operating expense, $1.0 million for Selling and general expense, $37.4 million for Property, plant and equipment, net relating to short-term leases due within 12 months. For the nine months ended includes $33.3 million for Lease operating expense, $3.1 million for Selling and general expense, $86.2 million for Property, plant and equipment, net and $3.0 million for Asset retirement obligations relating to short-term leases due within 12 months. Expenses primarily relate to drilling rigs and other oil and gas field equipment.

Schedule of Maturity of Lease Liabilities

Maturity of Lease Liabilities໿



(Thousands of dollars)	Operating Leases ¹			Finance Leases		Total
2019	$	53,597		267		53,864
2020	136,283			1,069		137,352
2021	57,190			1,069		58,259
2022	54,955			1,069		56,024
2023	54,453			1,069		55,522
Remaining	471,202			5,610		476,812
Total future minimum lease payments	827,680			10,153		837,833
Less imputed interest	(253,403		)	(1,985	)	(255,388	)
Present value of lease liabilities²	$	574,277		8,168		582,445

¹ Excludes $272.6 million of minimum lease payments for leases entered but not yet commenced. These payments relate to an expansion of an existing gas processing plant and payments are anticipated to commence at the end of 2020 for 20 years.

² Includes both the current and long-term portion of the lease liabilities.

Summary of Lease Term and Discount Rate

Lease Term and Discount Rate



	September 30, 2019
Weighted average remaining lease term:
Operating leases	11 years
Finance leases	10 years
Weighted average discount rate:
Operating leases	4.8	%
Finance leases	4.7	%

Summary of Other Lease Information

Other Information໿



(Thousands of dollars)	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	140,424
Operating cash flows from finance leases	306
Financing cash flows from finance leases	510
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	31,281