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Leases (Tables)
3 Months Ended
Mar. 31, 2020
Lessee Disclosure [Abstract]  
Summary of Lease Related Expenses
Expenses related to finance and operating leases included in the Consolidated Financial Statements are as follows:
 
 
 
 
Three Months Ended March 31,
(Thousands of dollars)
 
Financial Statement Category
 
2020
 
2019
Operating lease 1,2
 
Lease operating expenses
 
$
71,601

 
48,671

Operating lease 2
 
Transportation, gathering and processing
 
9,926

 
9,852

Operating lease 2
 
Selling and general expense
 
3,469

 
3,109

Operating lease 2
 
Other operating expense
 
414

 

Operating lease 2
 
Property, plant and equipment
 
24,556

 
23,447

Operating lease 2
 
Asset retirement obligations
 

 
3,024

Finance lease
 
 
 
 
 
 
Amortization of asset
 
Depreciation, depletion and amortization
 
268

 
210

Interest on lease liabilities
 
Interest expense, net
 
96

 
101

Sublease income
 
Other income
 
(306
)
 
(217
)
Net lease expense
 
 
 
$
110,024

 
88,197


1  The three months ended March 31, 2020 and 2019 included variable lease expenses of $6.3 million and $7.2 million, respectively, primarily related to additional volumes processed at a gas processing plant.
2  The three months ended March 31, 2020 included $32.9 million for Lease operating expense, $1.4 million for Transportation, gathering and processing, $1.2 million for Selling and general expense and $15.4 million for Property, plant and equipment, net relating to short-term leases due within 12 months.  The three months ended March 31, 2019 included $12.0 million for Lease operating expense, $1.1 million for Selling and general expense, $20.1 million for Property, plant and equipment, net and $3.0 million for Asset retirement obligations relating to short-term leases.  Expenses primarily relate to drilling rigs and other oil and gas field equipment.
Schedule of Maturity of Operating Lease Liabilities
Maturity of Lease Liabilities໿
(Thousands of dollars)
Operating Leases 1
 
Finance Leases
 
Total
2020
$
103,106

 
801

 
103,907

2021
135,875

 
1,069

 
136,944

2022
116,818

 
1,069

 
117,887

2023
114,990

 
1,069

 
116,059

2024
110,652

 
1,069

 
111,721

Remaining
478,780

 
4,541

 
483,321

Total future minimum lease payments
1,060,221

 
9,618

 
1,069,839

Less imputed interest
(247,935
)
 
(1,842
)
 
(249,777
)
Present value of lease liabilities 2
$
812,286

 
7,776

 
820,062

1 Excludes $256.7 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.
Schedule of Maturity of Finance Lease Liabilities
Maturity of Lease Liabilities໿
(Thousands of dollars)
Operating Leases 1
 
Finance Leases
 
Total
2020
$
103,106

 
801

 
103,907

2021
135,875

 
1,069

 
136,944

2022
116,818

 
1,069

 
117,887

2023
114,990

 
1,069

 
116,059

2024
110,652

 
1,069

 
111,721

Remaining
478,780

 
4,541

 
483,321

Total future minimum lease payments
1,060,221

 
9,618

 
1,069,839

Less imputed interest
(247,935
)
 
(1,842
)
 
(249,777
)
Present value of lease liabilities 2
$
812,286

 
7,776

 
820,062

1 Excludes $256.7 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
 
March 31, 2020
Weighted average remaining lease term:
 
Operating leases
9 years

Finance leases
9 years

Weighted average discount rate:
 
Operating leases
5.3
%
Finance leases
5.1
%

Summary of Other Lease Information
Other Information໿
 
Three Months Ended March 31,
(Thousands of dollars)
2020
 
2019
Cash paid for amounts included in the measurement of lease liabilities:
 
 
 
Operating cash flows from operating leases
$
53,039

 
44,730

Operating cash flows from finance leases
102

 
102

Financing cash flows from finance leases
168

 
160

Right-of-use assets obtained in exchange for lease liabilities:
 
 
 
Operating leases ¹
$
274,237

 
311


1 The three months ended March 31, 2020 includes $268.8 million related to a 5-year lease for the Cascade/Chinook FPSO in the U.S. Gulf of Mexico.