Leases (Notes)

9 Months Ended

Sep. 30, 2020

Lessee Operating and Financing Leases [Text Block]

LEASES

We determine if an arrangement is representative of a lease at contract inception. Right-of-use ("ROU") assets represent our right to use the underlying assets for the lease term and the corresponding lease liabilities represent our obligations to make lease payments arising from the leases. Operating and finance lease ROU assets and liabilities are recognized at the commencement date based on the present value of the expected lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we utilize our incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. Subsequent measurement, as well as presentation of expenses and cash flows, will depend upon the classification of the lease as either a finance or operating lease. Terms of our leases include options to extend or terminate the lease only when we can ascertain that it is reasonably certain we will exercise that option.

We have operating leases for office space and compressors and finance leases for vehicles. Our leases have remaining lease terms ranging from one to five years. The vehicle leases include options to renew for up to four years. Lease payments associated with vehicle leases also include a contractually stated residual value guarantee.

The following table presents the components of lease costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Costs	2020		2019		2020		2019
	(in thousands)
Operating lease costs	$	2,030	$	1,093	$	5,842	$	3,824

Finance lease costs:
Amortization of ROU assets	473		506		1,462		1,493
Interest on lease liabilities	44		66		150		195
Total finance lease costs	517		572		1,612		1,688
Short-term lease costs	17,975		35,118		149,960		147,223

Total lease costs	$	20,522	$	36,783	$	157,414	$	152,735

Our operating lease costs are recorded in lease operating expenses or general and administrative expense and our finance lease costs are recorded in DD&A expense and interest expense. Our short-term lease costs include amounts that are capitalized as part of the cost of another asset and are recorded as properties and equipment or recognized as expense.

The following table presents the balance sheet classification and other information regarding our leases as of:


Leases	Condensed Consolidated Balance Sheet Line Item	September 30, 2020			December 31, 2019
		(in thousands)
Operating Leases:
Operating lease ROU assets	Other assets	$	13,484		$	14,926
Operating lease obligation - short-term	Other accrued expenses	7,183			4,159
Operating lease obligation - long-term	Other liabilities	10,496			12,944
Total operating lease liabilities		$	17,679		$	17,103
Finance Leases:
Finance lease ROU assets	Properties and equipment, net	$	3,647		$	4,637
Finance lease obligation - short-term	Other accrued expenses	1,626			1,767
Finance lease obligation - long-term	Other liabilities	1,998			2,835
Total finance lease liabilities		$	3,624		$	4,602
Weighted-average remaining lease term (years)
Operating leases		3.15			4.28
Finance leases		2.72			3.17
Weighted-average discount rate
Operating leases		5.0		%	5.0		%
Finance leases		5.0		%	5.0		%

Maturity of lease liabilities by year and in the aggregate, under operating and financing leases with terms of one year or more, as of September 30, 2020 consist of the following:


	Operating Leases		Finance Leases		Total
	(in thousands)
2020 (remaining after September 30, 2020)	$	2,294	$	496	$	2,790
2021	7,055		1,580		8,635
2022	5,516		955		6,471
2023	1,559		669		2,228
2024	950		141		1,091
Thereafter	1,698		9		1,707
Total lease payments	19,072		3,850		22,922
Less interest and discount	(1,393)		(226)		(1,619)
Present value of lease liabilities	$	17,679	$	3,624	$	21,303